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 |
Item
|
||||
PART I | ||||
Cautionary Notice Regarding Forward-Looking Statements
|
||||
1.
|
1
|
|||
1A.
|
15
|
|||
2.
|
30
|
|||
3.
|
30
|
|||
4.
|
30
|
|||
PART II | ||||
5.
|
31
|
|||
6.
|
34
|
|||
7.
|
35
|
|||
7A
|
47 | |||
8.
|
48
|
|||
9.
|
81
|
|||
9A
|
81
|
|||
9B.
|
85
|
|||
PART III | ||||
10.
|
86
|
|||
11.
|
93
|
|||
12.
|
105
|
|||
13.
|
108
|
|||
14.
|
109
|
|||
PART IV | ||||
15.
|
111
|
|||
112
|
Fiscal Years
|
Ingredients
Segment
|
Core Standards and Contract Services Segment
|
Regulatory Consulting Segment
(Spherix Consulting)
|
Total
|
||||
2015
|
$12.5 million
|
$8.4 million
|
$1.1 million
|
$22.0 million
|
||||
2014
|
$6.8 million
|
$7.5 million
|
$1.0 million
|
$15.3 million
|
||||
2013
|
$2.4 million
|
$6.5 million
|
$1.1 million
|
$10.2 million
|
|
●
|
Commercialization of intellectual property
:
We believe that many of our proprietary ingredients 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
: Through our core standards and contract services segment, we intend to continue to expand our phytochemical standards and related contract services offerings. Currently, we have approximately 5,000 defined phytochemical reference standards.
|
|
●
|
Expansion into new markets
: For both our ingredients segment and core standards and contract services segment, 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.
|
|
●
|
Proprietary ingredient technologies (ingredients segment).
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 (core standards and contract services segment).
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 (core standards and contract services segment).
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 (core standards and contract services segment)
. We provide 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 (regulatory consulting segment)
. We provide a comprehensive range of consulting services in the areas of regulatory support, new ingredient or product development, risk management and litigation support. We provide and offer product regulatory approval and scientific advisory services.
|
|
●
|
Process development (core standards and contract services segment).
Developing cost effective and efficient processes for manufacturing natural products can be very difficult and time consuming. We assist customers in creating processes for cost-effective manufacturing of natural products, using “green chemistry.”
|
|
●
|
Nicotinamide riboside (ingredients segment)
. We are working to develop and conduct additional clinical trials to reinforce the health benefits associated with NR, a recently discovered vitamin found naturally in milk. NR is the most efficient B3 vitamin to enhance NAD+ energetics. NR 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 (ingredients segment).
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 (ingredients segment)
. We plan to develop an extraction process to concentrate the anthocyanins in Suntava® Purple Corn which will be used to produce a highly concentrated anthocyanin ingredient. We will utilize the expertise of a toll manufacturer to produce the commercial ingredient. We believe there is a ready market for cost-effective concentrated anthocyanins having application in dietary supplements, sports nutrition, food & beverage and skin care.
|
|
●
|
Quality verification seal program (core standards and contract services segment).
We intend to further develop and expand our offering of “ChromaDex® Quality Verified Seal” program which currently includes (i) supply chain facility audits and inspections to verify compliance with Good Manufacturing Practices as specified by the FDA; (ii) a comprehensive identity testing program for raw materials and finished products; (iii) finished product testing for potential contaminants such as microbials, heavy metals and residual solvents; and (iv) provisions for ongoing monitoring to be performed as part of a quality protocol design and managed by ChromaDex.
|
|
●
|
Phytochemical libraries (core standards and contract services segment).
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 (core standards and contract services segment)
. 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 (core standards and contract services segment)
. 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 (ingredients segment).
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.
|
|
●
|
Process scale manufacturing (ingredients segment/core standards and contact services segment).
We intend to invest in a pilot plant facility that has the capability of manufacturing at a process scale for products that we are planning to take to market as well as explore cost saving processes for existing products.
|
|
•
|
Catalogs, research publications, brochures and flyers
|
|
•
|
Tradeshows and conferences
|
|
•
|
Newsletters (via e-mail)
|
|
•
|
Internet
|
|
•
|
Website
|
|
•
|
Advertising in trade publications
|
|
•
|
Press releases
|
|
•
|
Europe (LGC Limited)
|
|
•
|
South America (JMC, Inc.)
|
|
•
|
China (MeiTech International LLC)
|
|
•
|
Korea (Dongmyung Scientific Co.)
|
|
•
|
India (LGC Promochem India Pvt. Ltd.)
|
|
•
|
Japan
|
|
•
|
Australia and New Zealand
|
|
•
|
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;
|
•
|
ingredient testing;
|
•
|
documentation process, batch records, specifications;
|
|
•
|
product labeling;
|
|
•
|
product manufacturing and storage;
|
•
|
New Dietary Ingredient (NDI) status;
|
|
•
|
health claims, advertising and promotion; and
|
|
•
|
product sales and distribution.
|
•
|
Royal DSM (the Netherlands)
|
•
|
Glanbia plc (Ireland)
|
•
|
BASF (Germany)
|
•
|
Sabinsa Corporation (India/USA)
|
|
•
|
Sigma-Aldrich (USA)
|
|
•
|
Phytolab (Germany)
|
|
•
|
US Pharmacopoeia (USA)
|
|
•
|
Extrasynthese (France)
|
|
•
|
Covance (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
|
||
7,776,326 |
Methods and compositions for treating neuropathies
|
6/3/2005
|
8/17/2010
|
6/3/2025
|
Licensed from Washington University
|
||
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 2, 2016
|
||||||||
Quarter Ended
|
High
|
Low
|
||||||
January 2, 2016
|
$ | 1.52 | $ | 1.12 | ||||
October 3, 2015
|
$ | 1.42 | $ | 1.02 | ||||
July 4, 2015
|
$ | 1.48 | $ | 1.13 | ||||
April 4, 2015
|
$ | 1.54 | $ | 0.85 |
Fiscal Year Ending January 3, 2015
|
||||||||
Quarter Ended
|
High
|
CLow
|
||||||
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 |
1/1/11
|
12/31/11
|
12/29/12
|
12/28/13
|
1/3/15
|
1/2/16
|
|||||||||||||||||||
ChromaDex Corporation
|
100.00 | 40.44 | 40.85 | 117.65 | 66.18 | 89.71 | ||||||||||||||||||
NASDAQ Composite
|
100.00 | 100.62 | 116.97 | 166.27 | 188.90 | 200.15 | ||||||||||||||||||
S&P SmallCap 600 Health Care
|
100.00 | 90.92 | 104.60 | 149.33 | 158.97 | 180.15 |
Years Ended
|
||||||||||||||||||||
2015
|
2014
|
2013
|
2012
|
2011
|
||||||||||||||||
Consolidated Statement of Operations Data
|
||||||||||||||||||||
Sales, net
|
$ | 22,014,140 | $ | 15,313,179 | $ | 10,160,964 | $ | 11,610,494 | $ | 8,112,610 | ||||||||||
Cost of sales
|
13,533,132 | 9,987,514 | 7,027,828 | 9,335,057 | 5,640,791 | |||||||||||||||
Gross profit
|
8,481,008 | 5,325,665 | 3,133,136 | 2,275,437 | 2,471,819 | |||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Sales and marketing
|
2,326,788 | 2,136,584 | 2,357,605 | 5,520,141 | 2,539,252 | |||||||||||||||
Research and development
|
891,601 | 513,671 | 134,040 | 141,573 | 96,788 | |||||||||||||||
General and administrative
|
7,416,451 | 7,860,930 | 4,982,976 | 8,250,157 | 7,700,018 | |||||||||||||||
Loss from investment in affiliate
|
- | 45,829 | 44,961 | - | - | |||||||||||||||
Operating expenses
|
10,634,840 | 10,557,014 | 7,519,582 | 13,911,871 | 10,336,058 | |||||||||||||||
Operating loss
|
(2,153,832 | ) | (5,231,349 | ) | (4,386,446 | ) | (11,636,434 | ) | (7,864,239 | ) | ||||||||||
Nonoperating income (expenses):
|
||||||||||||||||||||
Interest income
|
3,325 | 2,013 | 1,251 | 3,014 | 1,397 | |||||||||||||||
Interest expense
|
(616,033 | ) | (158,849 | ) | (34,330 | ) | (29,006 | ) | (32,142 | ) | ||||||||||
Nonoperating expenses
|
(612,708 | ) | (156,836 | ) | (33,079 | ) | (25,992 | ) | (30,745 | ) | ||||||||||
Loss before income taxes
|
(2,766,540 | ) | (5,388,185 | ) | (4,419,525 | ) | (11,662,426 | ) | (7,894,984 | ) | ||||||||||
Provision for income taxes
|
(4,527 | ) | - | - | - | - | ||||||||||||||
Net loss
|
$ | (2,771,067 | ) | $ | (5,388,185 | ) | $ | (4,419,525 | ) | $ | (11,662,426 | ) | $ | (7,894,984 | ) | |||||
Basic and Diluted loss per common share
|
$ | (0.03 | ) | $ | (0.05 | ) | $ | (0.04 | ) | $ | (0.13 | ) | $ | (0.12 | ) | |||||
Basic and Diluted weighted average
|
||||||||||||||||||||
common shares outstanding
|
107,632,022 | 106,459,379 | 99,987,443 | 90,268,802 | 68,306,812 |
At The End of Year
|
||||||||||||||||||||
2015
|
2014
|
2013
|
2012
|
2011
|
||||||||||||||||
Consolidated Balance Sheet Data
|
||||||||||||||||||||
Cash
|
$ | 5,549,672 | $ | 3,964,750 | $ | 2,261,336 | $ | 520,000 | $ | 420,152 | ||||||||||
Working capital (1)
|
4,400,432 | 2,189,442 | 1,602,008 | 3,717,610 | 1,379,025 | |||||||||||||||
Total assets
|
18,749,209 | 11,516,847 | 8,986,892 | 9,034,521 | 6,269,905 | |||||||||||||||
Long term debt
|
3,345,335 | 1,977,113 | - | - | - | |||||||||||||||
Total stockholders' equity
|
$ | 5,274,674 | $ | 3,998,391 | $ | 5,665,451 | $ | 3,993,329 | $ | 2,561,286 | ||||||||||
(1) Trade receivables plus inventories less accounts payable.
|
||||||||||||||||||||
Years Ended
|
||||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | ||||||||||||||||
Consolidated Cash Flow Data
|
||||||||||||||||||||
Net cash used in operating activities
|
$ | (2,111,138 | ) | $ | (2,580,406 | ) | $ | (3,906,011 | ) | $ | (10,119,713 | ) | $ | (4,098,829 | ) | |||||
Net cash provided by (used in) investing activities
|
(647,731 | ) | 1,590,275 | 998,651 | (76,565 | ) | (176,663 | ) | ||||||||||||
Net cash provided by financing activities
|
$ | 4,343,791 | $ | 2,693,545 | $ | 4,648,696 | $ | 10,296,126 | $ | 2,469,185 |
Twelve months ending
|
||||||||||||
Jan. 2, 2016
|
Jan. 3, 2015
|
Dec. 28, 2013
|
||||||||||
Sales
|
$ | 22,014,140 | $ | 15,313,179 | $ | 10,160,964 | ||||||
Cost of sales
|
13,533,132 | 9,987,514 | 7,027,828 | |||||||||
Gross profit
|
8,481,008 | 5,325,665 | 3,133,136 | |||||||||
Operating expenses -Sales and marketing
|
2,326,788 | 2,136,584 | 2,357,605 | |||||||||
-Research and development
|
891,601 | 513,671 | 134,040 | |||||||||
-General and administrative
|
7,416,451 | 7,860,930 | 4,982,976 | |||||||||
-Loss from investment in affiliate
|
- | 45,829 | 44,961 | |||||||||
Nonoperating -Interest income
|
3,325 | 2,013 | 1,251 | |||||||||
-Interest expenses
|
(616,033 | ) | (158,849 | ) | (34,330 | ) | ||||||
Provision for income taxes
|
(4,527 | ) | - | - | ||||||||
Net loss
|
$ | (2,771,000 | ) | $ | (5,388,185 | ) | $ | (4,419,525 | ) |
Twelve months ending
|
||||||||||||
January 2, 2016
|
January 3, 2015
|
Change
|
||||||||||
Net sales:
|
||||||||||||
Ingredients
|
$ | 12,542,000 | $ | 6,857,000 | 83 | % | ||||||
Core standards and contract services
|
8,419,000 | 7,487,000 | 12 | % | ||||||||
Scientific and regulatory consulting
|
1,053,000 | 969,000 | 9 | % | ||||||||
Total net sales
|
$ | 22,014,000 | $ | 15,313,000 | 44 | % |
·
|
The increase in sales for the ingredients segment is due to increased sales throughout most of the ingredients we sell, with “NIAGEN
®
” contributing a majority of the increase.
|
·
|
The increase in sales for the core standards and contract services segment is primarily due to increased sales of analytical testing and contract services.
|
·
|
The increase in sales for the scientific and regulatory consulting segment is due to the timing of completion of consulting projects for customers.
|
Twelve months ending
|
||||||||||||||||
January 2, 2016
|
January 3, 2015
|
|||||||||||||||
Amount
|
% of
net sales
|
Amount
|
% of
net sales
|
|||||||||||||
Cost of sales:
|
||||||||||||||||
Ingredients
|
$ | 6,664,000 | 53 | % | $ | 4,257,000 | 62 | % | ||||||||
Core standards and contract services
|
6,347,000 | 75 | % | 5,141,000 | 69 | % | ||||||||||
Scientific and regulatory consulting
|
522,000 | 50 | % | 589,000 | 61 | % | ||||||||||
Total cost of sales
|
$ | 13,533,000 | 61 | % | $ | 9,987,000 | 65 | % |
·
|
The decrease in cost of sales, as a percentage of net sales, for the ingredients segment is largely due to price reductions from our suppliers through increased purchase volumes.
|
·
|
The increase in cost as a percentage of net sales for the core standards and contract services segment is mainly due to increased costs in fine chemical reference standards as we reduced the carrying values for the portion of the inventory that are considered slow-moving and obsolete.
|
·
|
The percentage decrease in cost of sales for the scientific and regulatory consulting segment is largely due to higher utilizations of in-house consulting labor versus 3rd party consultants.
|
Twelve months ending
|
||||||||||||
January 2, 2016
|
January 3, 2015
|
Change
|
||||||||||
Gross profit:
|
||||||||||||
Ingredients
|
$ | 5,878,000 | $ | 2,600,000 | 126 | % | ||||||
Core standards and contract services
|
2,072,000 | 2,346,000 | -12 | % | ||||||||
Scientific and regulatory consulting
|
531,000 | 380,000 | 40 | % | ||||||||
Total gross profit
|
$ | 8,481,000 | $ | 5,326,000 | 59 | % | ||||||
·
|
The increased gross profit for the ingredients segment is due to the increased sales of the ingredient portfolio we offer, as well as lower prices from our suppliers as a result of increased purchase volumes.
|
·
|
The decreased gross profit for the core standards and contract services segment is largely due to increased costs in fine chemical reference standards as we reduced the carrying values for the portion of the inventory that are considered slow-moving and obsolete.
|
·
|
The increased gross profits for the scientific and regulatory consulting segment are largely due to higher utilizations of in-house consulting labor.
|
Twelve months ending
|
||||||||||||
January 2, 2016
|
January 3, 2015
|
Change
|
||||||||||
Sales and marketing expenses:
|
||||||||||||
Ingredients
|
$ | 1,112,000 | $ | 1,081,000 | 3 | % | ||||||
Core standards and contract services
|
1,202,000 | 976,000 | 23 | % | ||||||||
Scientific and regulatory consulting
|
13,000 | 80,000 | -84 | % | ||||||||
Total sales and marketing expenses
|
$ | 2,327,000 | $ | 2,137,000 | 9 | % | ||||||
·
|
For the ingredients segment, we were able to maintain sales and marketing expenses at a similar level to 2014 despite the significant increase in sales. We do anticipate some increased expenses going forward as we increase marketing efforts for our proprietary ingredients.
|
·
|
For the core standards and contract services segment, the increases are largely due to hiring additional sales and marketing staff and making certain operational changes.
Wages and travel expenses for sales and marketing staff increased by approximately $164,000 in 2015, compared to 2014.
|
·
|
For the scientific and regulatory consulting segment, we had significantly reduced sales and marketing expenses compared to 2014 and plan on continuing to do so in the future.
|
Twelve months ending
|
||||||||||||
January 2, 2016
|
January 3, 2015
|
Change
|
||||||||||
Research and development expenses:
|
||||||||||||
Ingredients
|
$ | 892,000 | $ | 514,000 | 74 | % |
·
|
All our research and development efforts are for the ingredients segment. In 2015, we increased our research and development efforts with a focus on our “NIAGEN
®
” brand.
|
Twelve months ending
|
||||||||||||
January 2, 2016
|
January 3, 2015
|
Change
|
||||||||||
General and administrative
|
$ | 7,416,000 | $ | 7,861,000 | -6 | % |
·
|
One of the factors that contributed to the decrease in general and administrative expenses was a decrease in share-based compensation. In 2015, our share-based compensation decreased to approximately $1,978,000, compared to approximately $2,917,000 in 2014.
|
Twelve months ending
|
||||||||||||
January 2, 2016
|
January 3, 2015
|
Change
|
||||||||||
Interest expense
|
$ | 616,000 | $ | 159,000 | 287 | % |
·
|
The increase in interest expense was mainly related to the Term Loan Agreement dated September 29, 2014, between the Company and Hercules Technology II, L.P, which the Company drew down first $2.5 million on September 29, 2014 and second $2.5 million on June 18, 2015. For more information on this term loan, please refer to Note 7 of Financial Statements appearing in Part II, Item 8 of this report.
|
Twelve months ending
|
||||||||||||
January 3, 2015
|
December 28, 2013
|
Change
|
||||||||||
Net sales:
|
||||||||||||
Ingredients
|
$ | 6,857,000 | $ | 2,430,000 | 182 | % | ||||||
Core standards and contract services
|
7,487,000 | 6,644,000 | 13 | % | ||||||||
Scientific and regulatory consulting
|
969,000 | 1,147,000 | -16 | % | ||||||||
Other
|
- | (60,000 | ) | -100 | % | |||||||
Total net sales
|
$ | 15,313,000 | $ | 10,161,000 | 51 | % | ||||||
·
|
The increase in sales for the ingredients segment was due to increased sales of most of the ingredients we sell, “NIAGEN®” in particular, which we launched in the third quarter of 2013.
|
·
|
The increase in sales for the core standards and contract services segment was due to increased sales of both phytochemical reference standards and contract services.
|
·
|
The decrease in sales for the scientific and regulatory consulting segment was due to our having completed fewer consulting projects in 2014, than in 2013.
|
·
|
In 2013, we had net sales of approximately ($60,000) related to our BluScience retail consumer line, which is represented as “Other” in the above table. On March 28, 2013, the Company entered into an asset purchase and sale agreement with NeutriSci International Inc. and consummated the sale of BluScience product line to NeutriSci.
|
Twelve months ending
|
||||||||||||||||
January 3, 2015
|
December 28, 2013
|
|||||||||||||||
Amount
|
% of
net sales
|
Amount
|
% of
net sales
|
|||||||||||||
Cost of sales:
|
||||||||||||||||
Ingredients
|
$ | 4,257,000 | 62 | % | $ | 1,501,000 | 62 | % | ||||||||
Core standards and contract services
|
5,141,000 | 69 | % | 4,894,000 | 74 | % | ||||||||||
Scientific and regulatory consulting
|
589,000 | 61 | % | 632,000 | 55 | % | ||||||||||
Other
|
- | - | 1,000 | -2 | % | |||||||||||
Total cost of sales
|
$ | 9,987,000 | 65 | % | $ | 7,028,000 | 69 | % | ||||||||
·
|
The cost of sales as a percentage of net sales for the ingredients segment was identical at 62% for both 2014 and 2013.
|
·
|
The decrease in cost of sales as a percentage of net sales for the core standards and contract services segment was largely due to increased sales in analytical testing and contract services area, which the sales increased about 13% in 2014 compared to 2013. Fixed labor costs make up the majority of costs for analytical testing and contract services and these fixed labor costs did not increase in proportion to sales.
|
·
|
The increase in cost of sales as a percentage of net sales for the scientific and regulatory consulting segment was largely due to completing fewer consulting projects during 2014 than during 2013.
|
·
|
In 2013, we had cost of sales of approximately $1,000 related to our BluScience retail consumer line, which is represented as “Other” in the above table. On March 28, 2013, the Company entered into an asset purchase and sale agreement with NeutriSci International Inc. and consummated the sale of BluScience product line to NeutriSci.
|
Twelve months ending
|
||||||||||||
January 3, 2015
|
December 28, 2013
|
Change
|
||||||||||
Gross profit:
|
||||||||||||
Ingredients
|
$ | 2,600,000 | $ | 929,000 | 180 | % | ||||||
Core standards and contract services
|
2,346,000 | 1,750,000 | 34 | % | ||||||||
Scientific and regulatory consulting
|
380,000 | 515,000 | -26 | % | ||||||||
Other
|
- | (61,000 | ) | -100 | % | |||||||
Total gross profit
|
$ | 5,326,000 | $ | 3,133,000 | 70 | % |
·
|
The increased sales throughout our ingredient portfolio, especially for our recently launched “NIAGEN®” was the main factor for the increase in gross profit for the ingredients segment.
|
·
|
The increased sales of analytical testing and contract services which resulted in a higher labor utilization rate as well as increased fixed cost coverage, was the primary reason for the increase in gross profit for the core standards and contract services segment.
|
·
|
For the scientific and regulator consulting segment, the decrease in sales which resulted in a lower labor utilization rate was the reason for the decrease in gross profit.
|
·
|
In 2013, we had gross profit of approximately ($61,000) related to our BluScience retail consumer line, which is represented as “Other” in the above table. On March 28, 2013, the Company entered into an asset purchase and sale agreement with NeutriSci International Inc. and consummated the sale of BluScience product line to NeutriSci.
|
Twelve months ending
|
||||||||||||
January 3, 2015
|
December 28, 2013
|
Change
|
||||||||||
Sales and marketing expenses:
|
||||||||||||
Ingredients
|
$ | 1,081,000 | $ | 752,000 | 44 | % | ||||||
Core standards and contract services
|
976,000 | 1,460,000 | -33 | % | ||||||||
Scientific and regulatory consulting
|
80,000 | 15,000 | 433 | % | ||||||||
Other
|
- | 131,000 | -100 | % | ||||||||
Total sales and marketing expenses
|
$ | 2,137,000 | $ | 2,358,000 | -9 | % | ||||||
·
|
For the ingredients segment, the increase was largely due to increased marketing efforts for our line of proprietary ingredients.
|
·
|
For the core standards and contract services segment, the decrease was largely due to reduction of sales and marketing staff and a decrease in marketing and advertising spend.
|
·
|
For the scientific and regulatory consulting segment, the increase was largely due to our increased marketing efforts to raise the awareness of our consulting services within the industry.
|
·
|
In 2013, we had sales and marketing expenses of approximately $131,000 related to our BluScience retail consumer line, which are represented as “Other” in the above table. On March 28, 2013, the Company entered into an asset purchase and sale agreement with NeutriSci International Inc. and consummated the sale of BluScience product line to NeutriSci.
|
Twelve months ending
|
||||||||||||
January 3, 2015
|
December 28, 2013
|
Change
|
||||||||||
Research and development expenses:
|
||||||||||||
Ingredients
|
$ | 514,000 | $ | 134,000 | 284 | % |
·
|
All our research and development efforts are for the ingredients segment. In 2014, we significantly increased our research and development efforts for our line of proprietary ingredients compared to 2013.
In 2014, we conducted safety studies related to our “NIAGEN®” as well as a human clinical trial study on “PURENERGY®.”
|
Twelve months ending
|
||||||||||||
January 3, 2015
|
December 28, 2013
|
Change
|
||||||||||
General and administrative
|
$ | 7,861,000 | $ | 4,983,000 | 58 | % |
·
|
One of the factors that contributed to this increase was an increase in share-based compensation expense. Our share-based compensation expense for the twelve-month period ended January 3, 2015 was approximately $2,917,000 as compared to approximately $1,288,000 for the twelve-month period ended December 28, 2013. During the twelve-month period ended January 3, 2015, the Company recognized expenses for the 1,090,000 shares of restricted stock granted to the Company’s officers and members of the board of directors, which resulted in the increase in share-based compensation expenses.
|
·
|
Another factor that contributed to the increase was an increase in expenses related to the patents we license, including maintenance, consulting, filing and related royalty expenses. Our patent related expenses increased to approximately $815,000 as compared to $294,000 for the twelve-month period ended December 28, 2013.
|
·
|
In addition, during the twelve-month period ended January 3, 2015, there was an increase of approximately $176,000 in wages and related expenses as a result of hiring additional personnel to support our operations. There was also one-time expense for $125,000 during the twelve-month period ended January 3, 2015, which we have paid as a settlement fee to a certain claimant.
|
Twelve months ending
|
||||||||||||
January 3, 2015
|
December 28, 2013
|
Change
|
||||||||||
Interest expense
|
$ | 159,000 | $ | 34,000 | 368 | % |
·
|
The increase was largely related to the Loan Agreement the Company entered into with Hercules Technology II, L.P., which the Company has drawn down $2.5 million on September 29, 2014.
|
Payments due by period
|
||||||||||||||||||||||||
Total
|
2016
|
2017
|
2018
|
2019
|
2020
|
|||||||||||||||||||
Loan payable
|
$ | 5,188,000 | $ | 1,370,000 | $ | 1,992,000 | $ | 1,826,000 | $ | - | $ | - | ||||||||||||
Capital leases
|
754,000 | 268,000 | 247,000 | 198,000 | 41,000 | - | ||||||||||||||||||
Operating leases
|
994,000 | 355,000 | 225,000 | 233,000 | 181,000 | - | ||||||||||||||||||
Purchase obligations
|
4,228,000 | 3,592,000 | 636,000 | - | - | - | ||||||||||||||||||
Total
|
$ | 11,164,000 | $ | 5,585,000 | $ | 3,100,000 | $ | 2,257,000 | $ | 222,000 | $ | - |
Page
|
|
Report of Independent Registered Public Accounting Firm
|
49
|
Consolidated Balance Sheets at January 2, 2016 and January 3, 2015
|
50
|
Consolidated Statements of Operations for the Years Ended January 2, 2016, January 3, 2015 and December 28, 2013
|
51
|
Consolidated Statements of Stockholders’ Equity for the Years Ended January 2, 2016, January 3, 2015 and December 28, 2013
|
52
|
Consolidated Statements of Cash Flows for the Years Ended January 2, 2016, January 3, 2015 and December 28, 2013
|
53
|
Notes to Consolidated Financial Statements
|
55
|
ChromaDex Corporation and Subsidiaries
|
||||||||
Consolidated Balance Sheets
|
||||||||
January 2, 2016 and January 3, 2015
|
||||||||
2015
|
2014
|
|||||||
Assets
|
||||||||
Current Assets
|
||||||||
Cash
|
$ | 5,549,672 | $ | 3,964,750 | ||||
Trade receivables, net of allowances of $367,000 and $38,000, respectively
|
2,450,591 | 1,906,709 | ||||||
Inventories
|
8,173,799 | 3,734,341 | ||||||
Prepaid expenses and other assets
|
373,567 | 292,891 | ||||||
Total current assets
|
16,547,629 | 9,898,691 | ||||||
Leasehold Improvements and Equipment, net
|
1,788,645 | 1,264,660 | ||||||
Deposits
|
58,883 | 57,435 | ||||||
Intangible assets, net
|
354,052 | 296,061 | ||||||
Total assets
|
$ | 18,749,209 | $ | 11,516,847 | ||||
Liabilities and Stockholders' Equity
|
||||||||
Current Liabilities
|
||||||||
Accounts payable
|
$ | 6,223,958 | $ | 3,451,608 | ||||
Accrued expenses
|
1,302,865 | 853,685 | ||||||
Current maturities of loan payable
|
1,528,578 | 223,358 | ||||||
Current maturities of capital lease obligations
|
219,689 | 148,278 | ||||||
Customer deposits and other
|
272,002 | 234,435 | ||||||
Deferred rent, current
|
39,529 | 69,456 | ||||||
Total current liabilities
|
9,586,621 | 4,980,820 | ||||||
Loan payable, less current maturities, net
|
3,345,335 | 1,977,113 | ||||||
Capital lease obligations, less current maturities
|
444,589 | 423,015 | ||||||
Deferred rent, less current
|
97,990 | 137,508 | ||||||
Total liabilities
|
13,474,535 | 7,518,456 | ||||||
Commitments and contingencies
|
||||||||
Stockholders' Equity
|
||||||||
Common stock, $.001 par value; authorized 150,000,000 shares;
|
||||||||
issued and outstanding 2015 108,010,766 and 2014 105,271,058 shares
|
108,011 | 105,271 | ||||||
Additional paid-in capital
|
47,462,052 | 43,417,442 | ||||||
Accumulated deficit
|
(42,295,389 | ) | (39,524,322 | ) | ||||
Total stockholders' equity
|
5,274,674 | 3,998,391 | ||||||
Total liabilities and stockholders' equity
|
$ | 18,749,209 | $ | 11,516,847 |
ChromaDex Corporation and Subsidiaries
|
||||||||||||
Consolidated Statements of Cash Flows
|
||||||||||||
Years Ended January 2, 2016, January 3, 2015 and December 28, 2013
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Cash Flows From Operating Activities
|
||||||||||||
Net loss
|
$ | (2,771,067 | ) | $ | (5,388,185 | ) | $ | (4,419,525 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||||||
Depreciation of leasehold improvements and equipment
|
285,536 | 222,721 | 246,175 | |||||||||
Amortization of intangibles
|
45,014 | 35,589 | 23,532 | |||||||||
Share-based compensation expense
|
1,977,611 | 2,916,924 | 1,287,917 | |||||||||
Allowance for doubtful trade receivables
|
329,844 | 28,779 | (441,340 | ) | ||||||||
Loss from disposal of equipment
|
19,643 | 20,400 | 66,378 | |||||||||
Loss from impairment of intangibles
|
19,495 | - | - | |||||||||
Loss from investment in affiliate
|
- | 45,829 | 44,961 | |||||||||
Non-cash financing costs
|
188,442 | 49,527 | - | |||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Trade receivables
|
(873,726 | ) | (1,096,695 | ) | 1,560,070 | |||||||
Other receivable
|
- | 215,000 | (215,000 | ) | ||||||||
Inventories
|
(4,439,458 | ) | (1,530,216 | ) | (466,352 | ) | ||||||
Prepaid expenses and other assets
|
(82,124 | ) | (91,053 | ) | (62,913 | ) | ||||||
Accounts payable
|
2,772,350 | 2,157,192 | (1,618,450 | ) | ||||||||
Accrued expenses
|
449,180 | 196,978 | (204,891 | ) | ||||||||
Customer deposits and other
|
37,567 | (311,609 | ) | 235,777 | ||||||||
Deferred rent
|
(69,445 | ) | (51,587 | ) | 57,650 | |||||||
Net cash used in operating activities
|
(2,111,138 | ) | (2,580,406 | ) | (3,906,011 | ) | ||||||
Cash Flows From Investing Activities
|
||||||||||||
Purchases of leasehold improvements and equipment
|
(525,231 | ) | (123,096 | ) | (137,349 | ) | ||||||
Purchase of intangible assets
|
(122,500 | ) | (130,000 | ) | (89,000 | ) | ||||||
Proceeds from sales of assets
|
- | - | 1,000,000 | |||||||||
Proceeds from sales of equipment
|
- | 1,356 | - | |||||||||
Proceeds from investment in affiliate
|
- | 1,842,015 | 225,000 | |||||||||
Net cash provided by (used in) investing activities
|
(647,731 | ) | 1,590,275 | 998,651 |
ChromaDex Corporation and Subsidiaries
|
||||||||||||
Condensed Consolidated Balance Sheet
|
||||||||||||
January 3, 2015
|
||||||||||||
Previously
Reported
|
Adjustments
|
As Adjusted
|
||||||||||
Assets
|
||||||||||||
Current Assets
|
$ | 9,898,691 | $ | - | $ | 9,898,691 | ||||||
Leasehold Improvements and Equipment, net
|
1,264,660 | - | 1,264,660 | |||||||||
Other Noncurrent Assets
|
444,857 | (91,361 | ) | 353,496 | ||||||||
Total assets
|
$ | 11,608,208 | $ | (91,361 | ) | $ | 11,516,847 | |||||
Liabilities and Stockholders' Equity
|
||||||||||||
Current Liabilities
|
$ | 4,980,820 | $ | - | $ | 4,980,820 | ||||||
Loan payable, less current maturities, net
|
2,068,474 | (91,361 | ) | 1,977,113 | ||||||||
Capital lease obligations, less current maturities
|
423,015 | - | 423,015 | |||||||||
Deferred rent, less current
|
137,508 | - | 137,508 | |||||||||
Total liabilities
|
7,609,817 | (91,361 | ) | 7,518,456 | ||||||||
Total stockholders' equity
|
3,998,391 | - | 3,998,391 | |||||||||
Total liabilities and stockholders' equity
|
$ | 11,608,208 | $ | (91,361 | ) | $ | 11,516,847 |
Period
|
Volatility
|
Average Daily
Trading Volume
|
||||||
6/20/2008 ~ 4/19/2010
|
402 | % | 11,455 | |||||
4/20/2010 ~ 1/2/2016
|
74 | % | 147,703 |
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 | % |
2015
|
2014
|
|||||||
Reference standards
|
$ | 1,239,338 | $ | 1,760,305 | ||||
Bulk ingredients
|
7,195,461 | 2,298,036 | ||||||
8,434,799 | 4,058,341 | |||||||
Less valuation allowance
|
261,000 | 324,000 | ||||||
$ | 8,173,799 | $ | 3,734,341 |
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
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Net loss
|
$ | (2,771,067 | ) | $ | (5,388,185 | ) | $ | (4,419,525 | ) | |||
Basic and diluted loss per common share
|
$ | (0.03 | ) | $ | (0.05 | ) | $ | (0.04 | ) | |||
Weighted average common shares outstanding (1):
|
107,632,022 | 106,459,379 | 99,987,443 | |||||||||
Potentially dilutive securities (2):
|
||||||||||||
Stock options
|
15,734,755 | 13,974,052 | 13,160,955 | |||||||||
Warrants
|
1,269,020 | 469,020 | - | |||||||||
Convertible debt
|
773,395 | 773,395 | - | |||||||||
(1) Includes 1,214,127, 1,623,186 and 500,000 weighted average nonvested shares of restricted stock
|
||||||||||||
for the years 2015, 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.
|
2015
|
2014
|
|||||
Gross Carrying
|
Accumulated
|
Net
|
Gross Carrying
|
Accumulated
|
Net
|
|
Amount
|
Amortization
|
Amount
|
Amount
|
Amortization
|
Amount
|
|
Amortized intangible assets:
|
||||||
License agreements and other
|
$1,249,500
|
$ 895,458
|
$ 354,052
|
$1,205,275
|
$ 909,224
|
$ 296,061
|
Years ending December:
|
||||
2016
|
$ | 45,000 | ||
2017
|
45,000 | |||
2018
|
45,000 | |||
2019
|
45,000 | |||
2020
|
42,000 | |||
Thereafter
|
132,000 | |||
$ | 354,000 |
2015
|
2014
|
|||||||
Laboratory equipment
|
$ | 3,737,908 | $ | 3,151,748 | ||||
Leasehold improvements
|
513,453 | 495,240 | ||||||
Computer equipment
|
404,228 | 329,737 | ||||||
Furniture and fixtures
|
17,056 | 13,039 | ||||||
Office equipment
|
21,547 | 7,877 | ||||||
Construction in progress
|
4,420 | 68,141 | ||||||
4,698,612 | 4,065,782 | |||||||
Less accumulated depreciation
|
2,909,967 | 2,801,122 | ||||||
$ | 1,788,645 | $ | 1,264,660 |
Year ending December:
|
||||
2016
|
$ | 267,601 | ||
2017
|
246,752 | |||
2018
|
197,899 | |||
2019
|
41,304 | |||
Total minimum lease payments
|
753,556 | |||
Less amount representing interest at a rate of approximately 8.6% per year
|
89,278 | |||
Present value of net minimum lease payments
|
664,278 | |||
Less current portion
|
219,689 | |||
Long-term obligations under capital leases
|
$ | 444,589 | ||
Principal amount payable for following years ending December
|
||||
2016
|
$ | 1,370,454 | ||
2017
|
1,991,688 | |||
2018
|
1,637,858 | |||
Total principal payments
|
5,000,000 | |||
Accrued end of term charge
|
68,082 | |||
Total loan payable
|
5,068,082 | |||
Less unamortized debt discount
|
194,169 | |||
Less current portion
|
1,528,578 | |||
Loan payable – long term
|
$ | 3,345,335 |
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 | % |
2015
|
2014
|
2013
|
||||||||||
Current
|
||||||||||||
Federal
|
$ | - | $ | - | $ | - | ||||||
State
|
4,527 | - | - | |||||||||
Deferred (net of valuation allowance)
|
||||||||||||
Federal
|
- | - | - | |||||||||
State
|
- | - | - | |||||||||
Income tax provision
|
$ | 4,527 | $ | - | - |
2015
|
2014
|
2013
|
||||||||||
Federal income tax expense at statutory rate
|
(34.0 | )% | (34.0 | )% | (34.0 | )% | ||||||
State income tax, net of federal benefit
|
(5.1 | )% | (5.3 | )% | (4.3 | )% | ||||||
Permanent differences
|
5.7 | % | 2.7 | % | 2.6 | % | ||||||
Change in tax rates
|
0.7 | % | (6.1 | )% | (3.7 | )% | ||||||
Expirations of net operating losses
|
17.4 | % | 0.0 | % | 0.0 | % | ||||||
Change in valuation allowance
|
13.7 | % | 42.8 | % | 39.2 | % | ||||||
Other
|
1.8 | % | (0.1 | )% | 0.2 | % | ||||||
Effective tax rate
|
0.2 | % | 0.0 | % | 0.0 | % |
2015
|
2014
|
|||||||
Deferred tax assets:
|
||||||||
Net operating loss carryforward
|
$ | 10,860,000 | $ | 10,593,000 | ||||
Capital loss carryforward
|
808,000 | 808,000 | ||||||
Stock options and restricted stock
|
3,048,000 | 2,934,000 | ||||||
Inventory reserve
|
249,000 | 226,000 | ||||||
Allowance for doubtful accounts
|
144,000 | 15,000 | ||||||
Accrued expenses
|
277,000 | 125,000 | ||||||
Deferred revenue
|
- | 4,000 | ||||||
Intangibles
|
23,000 | 26,000 | ||||||
Deferred rent
|
54,000 | 81,000 | ||||||
15,463,000 | 14,812,000 | |||||||
Less valuation allowance
|
(15,050,000 | ) | (14,669,000 | ) | ||||
413,000 | 143,000 | |||||||
Deferred tax liabilities:
|
||||||||
Leasehold improvements and equipment
|
(284,000 | ) | (108,000 | ) | ||||
Prepaid expenses
|
(129,000 | ) | (35,000 | ) | ||||
(413,000 | ) | (143,000 | ) | |||||
$ | - | $ | - |
Year Ended December
|
2015
|
2014
|
2013
|
|||||||||
Expected term
|
5.8 years
|
5.8 years
|
6.0 years
|
|||||||||
Expected Volatility
|
75.8 | % | 74.6 | % | 32.8 | % | ||||||
Expected dividends
|
0.0 | % | 0.0 | % | 0.00 | % | ||||||
Risk-free rate
|
1.7 | % | 1.9 | % | 1.5 | % |
Weighted Average
|
|||||||||||||||||
Remaining
|
Aggregate
|
||||||||||||||||
Number of
|
Exercise
|
Contractual
|
Fair
|
Intrinsic
|
|||||||||||||
Shares
|
Price
|
Term
|
Value
|
Value
|
|||||||||||||
Outstanding at December 29, 2012
|
12,202,558 | $ | 1.08 | 8.25 | |||||||||||||
Options Granted
|
805,000 | 0.81 | 10.00 | $ | 0.29 | ||||||||||||
Options Exercised
|
(26,038 | ) | 0.51 | ||||||||||||||
Options Expired
|
(75,000 | ) | 0.50 | ||||||||||||||
Options Forfeited
|
(792,865 | ) | 1.19 | ||||||||||||||
Outstanding at December 28, 2013
|
12,113,655 | $ | 1.06 | 7.43 | |||||||||||||
Options Granted
|
2,233,987 | 1.39 | 10.00 | $ | 0.90 | ||||||||||||
Options Classification from Employee
to Non-
Employee
|
(113,151 | ) | 0.76 | 8.68 | |||||||||||||
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 | |||||||||||||
Options Granted
|
2,191,685 | 1.22 | 10.00 | $ | 0.76 | ||||||||||||
Options Classification from Employee
to Non-
Employee
|
(1,542,071 | ) | 0.93 | 7.78 | |||||||||||||
Options Exercised
|
(120,708 | ) | 0.79 | ||||||||||||||
Options Forfeited
|
(310,274 | ) | 1.31 | ||||||||||||||
Outstanding at January 2, 2016
|
12,942,233 | $ | 1.17 | 6.44 |
$ 2,123,923
|
||||||||||||
Exercisable at January 2, 2016
|
10,034,596 | $ | 1.16 | 5.73 |
$ 1,921,746
|
Weighted Average
|
||||||||||||||||||||
Remaining
|
Aggregate
|
|||||||||||||||||||
Number of
|
Exercise
|
Contractual
|
Fair
|
Intrinsic
|
||||||||||||||||
Shares
|
Price
|
Term
|
Value
|
Value
|
||||||||||||||||
Outstanding at December 29, 2012
|
145,834 | $ | 1.59 | 8.27 | ||||||||||||||||
Options Granted
|
200,000 | 0.63 | 10.00 | $ | 0.22 | |||||||||||||||
Options Exercised
|
- | - | ||||||||||||||||||
Options Forfeited
|
(145,834 | ) | 1.59 | |||||||||||||||||
Outstanding at December 28, 2013
|
200,000 | $ | 0.63 | 9.08 | ||||||||||||||||
Options Granted
|
- | - | ||||||||||||||||||
Options Exercised
|
- | - | ||||||||||||||||||
Options Forfeited
|
- | - | ||||||||||||||||||
Outstanding at January 3, 2015
|
200,000 | $ | 0.63 | 8.08 | ||||||||||||||||
Options Granted
|
- | - | ||||||||||||||||||
Options Exercised
|
- | - | ||||||||||||||||||
Options Forfeited
|
- | - | ||||||||||||||||||
Outstanding at January 2, 2016
|
200,000 | $ | 0.63 | 7.08 | $ | 118,000 | ||||||||||||||
Exercisable at January 2, 2016
|
145,833 | $ | 0.63 | 7.08 | $ | 86,041 |
Weighted Average
|
||||||||
Award-Date
|
||||||||
Shares
|
Fair Value
|
|||||||
Unvested shares at December 29, 2012
|
500,000 | $ | 0.69 | |||||
Granted
|
- | - | ||||||
Vested
|
- | - | ||||||
Forfeited
|
- | - | ||||||
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 | |||||
Granted
|
- | - | ||||||
Vested
|
(520,000 | ) | 1.41 | |||||
Forfeited
|
- | - | ||||||
Unvested shares at January 2, 2016
|
1,070,000 | $ | 1.07 | |||||
Expected to Vest as of January 2, 2016
|
1,070,000 | $ | 1.07 |
Weighted Average
|
|||||||||||||
Remaining
|
Aggregate
|
||||||||||||
Number of
|
Exercise
|
Contractual
|
Intrinsic
|
||||||||||
Shares
|
Price
|
Term
|
Value
|
||||||||||
Outstanding at December 29, 2012
|
1,097,300 | $ | 1.23 | 5.26 | |||||||||
Options Granted
|
- | - | |||||||||||
Options Exercised
|
(250,000 | ) | 0.50 | ||||||||||
Options Forfeited
|
- | - | |||||||||||
Outstanding at December 28, 2013
|
847,300 | $ | 1.44 | 5.74 | |||||||||
Options Granted
|
90,000 | 1.24 | 10.00 | ||||||||||
Options Classification from Employee
to Non-Employee
|
113,151 | 0.76 | 8.68 | ||||||||||
Options Exercised
|
- | - | |||||||||||
Options Forfeited
|
- | - | |||||||||||
Outstanding at January 3, 2015
|
1,050,451 | $ | 1.35 | 5.46 | |||||||||
Options Granted
|
- | - | |||||||||||
Options Classification from Employee
to Non-Employee
|
1,542,071 | 0.93 | 7.78 | ||||||||||
Options Exercised
|
- | - | |||||||||||
Options Forfeited
|
- | - | |||||||||||
Outstanding at January 2, 2016
|
2,592,522 | $ | 1.10 | 6.04 |
$550,111
|
||||||||
Exercisable at January 2, 2016
|
2,558,772 | $ | 1.10 | 6.00 |
$549,961
|
Weighted Average
|
||||||||
Shares
|
Fair Value
|
|||||||
Unvested shares at December 29, 2012
|
- | $ | - | |||||
Granted
|
- | - | ||||||
Vested
|
- | - | ||||||
Forfeited
|
- | - | ||||||
Unvested shares at December 28, 2013
|
- | $ | - | |||||
Granted
|
96,000 | 1.30 | ||||||
Vested
|
(20,000 | ) | 1.17 | |||||
Forfeited
|
- | - | ||||||
Unvested shares at January 3, 2015
|
76,000 | $ | 0.90 | |||||
Granted
|
140,000 | 0.86 | ||||||
Vested
|
(164,000 | ) | 1.21 | |||||
Forfeited
|
- | - | ||||||
Unvested shares expected to vest at January 2, 2016
|
52,000 | $ | 1.22 | |||||
November 9, 2015
|
||||
Fair value of common stock
|
$ | 1.47 | ||
Volatility
|
62.26 | % | ||
Expected dividends
|
0.00 | % | ||
Contractual term
|
3.0 years
|
|||
Risk-free rate
|
1.27 | % |
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 | |||||||||||||
Warrants Issued
|
800,000 | 1.50 | ||||||||||||||
Warrants Exercised
|
- | - | ||||||||||||||
Warrants Expired
|
- | - | ||||||||||||||
Outstanding and exercisable at January 2, 2016
|
1,269,020 | $ | 1.34 | 3.07 | $ | 72,205 |
·
|
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.
|
·
|
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.
|
·
|
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 2, 2016
|
Ingredients
|
Core Standards and
Contract Services
|
Regulatory
|
|||||||||||||||||
segment
|
segment
|
Consulting segment
|
Other
|
Total
|
||||||||||||||||
Net sales
|
$ | 12,542,314 | $ | 8,418,672 | $ | 1,053,154 | $ | - | $ | 22,014,140 | ||||||||||
Cost of sales
|
6,664,164 | 6,346,903 | 522,065 | - | 13,533,132 | |||||||||||||||
Gross profit
|
5,878,150 | 2,071,769 | 531,089 | - | 8,481,008 | |||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Sales and marketing
|
1,111,993 | 1,201,455 | 13,340 | - | 2,326,788 | |||||||||||||||
Research and development
|
891,601 | - | - | - | 891,601 | |||||||||||||||
General and administrative
|
- | - | - | 7,416,451 | 7,416,451 | |||||||||||||||
Operating expenses
|
2,003,594 | 1,201,455 | 13,340 | 7,416,451 | 10,634,840 | |||||||||||||||
Operating income (loss)
|
$ | 3,874,556 | $ | 870,314 | $ | 517,749 | $ | (7,416,451 | ) | $ | (2,153,832 | ) |
Year ended
|
Core Standards and
|
|||||||||||||||||||
January 3, 2015
|
Ingredients
|
Contract Services
|
Regulatory
|
|||||||||||||||||
segment
|
segment
|
Consulting segment
|
Other
|
Total
|
||||||||||||||||
Net sales
|
$ | 6,857,177 | $ | 7,487,189 | $ | 968,813 | $ | - | $ | 15,313,179 | ||||||||||
Cost of sales
|
4,257,347 | 5,141,667 | 588,500 | - | 9,987,514 | |||||||||||||||
Gross profit
|
2,599,830 | 2,345,522 | 380,313 | - | 5,325,665 | |||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Sales and marketing
|
1,081,209 | 975,800 | 79,575 | - | 2,136,584 | |||||||||||||||
Research and development
|
513,671 | - | - | - | 513,671 | |||||||||||||||
General and administrative
|
- | - | - | 7,860,930 | 7,860,930 | |||||||||||||||
Loss from investment in affiliate
|
- | - | - | 45,829 | 45,829 | |||||||||||||||
Operating expenses
|
1,594,880 | 975,800 | 79,575 | 7,906,759 | 10,557,014 | |||||||||||||||
Operating income (loss)
|
$ | 1,004,950 | $ | 1,369,722 | $ | 300,738 | $ | (7,906,759 | ) | $ | (5,231,349 | ) |
Year ended
|
||||||||||||||||||||
December 28, 2013
|
Ingredients
segment
|
Core Standards and
Contract Services
segment
|
Scientific and
Regulatory
Consulting segment
|
Other
|
Total
|
|||||||||||||||
Net sales
|
$ | 2,430,699 | $ | 6,643,832 | $ | 1,146,718 | $ | (60,285 | ) | $ | 10,160,964 | |||||||||
Cost of sales
|
1,501,187 | 4,893,649 | 632,037 | 955 | 7,027,828 | |||||||||||||||
Gross profit (loss)
|
929,512 | 1,750,183 | 514,681 | (61,240 | ) | 3,133,136 | ||||||||||||||
Operating expenses:
|
||||||||||||||||||||
Sales and marketing
|
752,121 | 1,459,620 | 14,705 | 131,159 | 2,357,605 | |||||||||||||||
Research and development
|
134,040 | - | - | - | 134,040 | |||||||||||||||
General and administrative
|
- | - | - | 4,982,976 | 4,982,976 | |||||||||||||||
Loss from investment in affiliate
|
- | - | - | 44,961 | 44,961 | |||||||||||||||
Operating expenses
|
886,161 | 1,459,620 | 14,705 | 5,159,096 | 7,519,582 | |||||||||||||||
Operating income (loss)
|
$ | 43,351 | $ | 290,563 | $ | 499,976 | $ | (5,220,336 | ) | $ | (4,386,446 | ) | ||||||||
At January 2, 2016
|
Ingredients
segment
|
Core Standards and
Contract Services
segment
|
Scientific and
Regulatory
Consulting segment
|
Other
|
Total
|
|||||||||||||||
Total assets
|
$ | 9,105,502 | $ | 3,306,624 | $ | 111,765 | $ | 6,225,318 | $ | 18,749,209 | ||||||||||
At January 3, 2015
|
Ingredients
segment
|
Core Standards and
Contract Services
segment
|
Scientific and
Regulatory
Consulting segment
|
Other
|
Total
|
|||||||||||||||
Total assets
|
$ | 3,757,073 | $ | 3,220,518 | $ | 105,711 | $ | 4,433,545 | $ | 11,516,847 | ||||||||||
Three Months Ended
|
||||||||||||||||
April 4, 2015
|
July 4, 2015
|
October 3, 2015
|
January 2,, 2016
|
|||||||||||||
Sales, net
|
$ | 5,260,971 | $ | 6,101,380 | $ | 6,287,309 | $ | 4,364,480 | ||||||||
Cost of sales
|
3,333,347 | 3,630,688 | 3,805,679 | 2,763,418 | ||||||||||||
Gross profit
|
1,927,624 | 2,470,692 | 2,481,630 | 1,601,062 | ||||||||||||
Operating expenses
|
2,833,708 | 2,654,752 | 2,304,500 | 2,841,880 | ||||||||||||
Operating income (loss)
|
(906,084 | ) | (184,060 | ) | 177,130 | (1,240,818 | ) | |||||||||
Nonoperating expenses
|
(119,431 | ) | (131,132 | ) | (180,846 | ) | (181,299 | ) | ||||||||
Provision for income taxes
|
- | - | - | (4,527 | ) | |||||||||||
Net loss
|
$ | (1,025,515 | ) | $ | (315,192 | ) | $ | (3,716 | ) | $ | (1,426,644 | ) | ||||
Basic and Diluted loss per common share
|
$ | (0.01 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.01 | ) | ||||
Basic and Diluted weighted average
|
||||||||||||||||
common shares outstanding
|
107,198,597 | 107,409,894 | 107,442,916 | 108,476,686 | ||||||||||||
Three Months Ended
|
||||||||||||||||
March 29, 2014
|
June 28, 2014
|
September 27, 2014
|
January 3, 2015
|
|||||||||||||
Sales, net
|
$ | 3,074,138 | $ | 3,856,154 | $ | 4,139,710 | $ | 4,243,177 | ||||||||
Cost of sales
|
2,089,130 | 2,457,388 | 2,616,764 | 2,824,232 | ||||||||||||
Gross profit
|
985,008 | 1,398,766 | 1,522,946 | 1,418,945 | ||||||||||||
Operating expenses
|
2,823,773 | 3,040,194 | 2,170,380 | 2,522,667 | ||||||||||||
Operating loss
|
(1,838,765 | ) | (1,641,428 | ) | (647,434 | ) | (1,103,722 | ) | ||||||||
Nonoperating expenses
|
(9,251 | ) | (11,714 | ) | (12,219 | ) | (123,652 | ) | ||||||||
Net loss
|
$ | (1,848,016 | ) | $ | (1,653,142 | ) | $ | (659,653 | ) | $ | (1,227,374 | ) | ||||
Basic and Diluted loss per common share
|
$ | (0.02 | ) | $ | (0.02 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||
Basic and Diluted weighted average
|
||||||||||||||||
common shares outstanding
|
106,076,361 | 106,185,584 | 106,610,400 | 106,929,049 | ||||||||||||
Three Months Ended
|
||||||||||||||||
March 30, 2013
|
June 29, 2013
|
September 28, 2013
|
December 28, 2013
|
|||||||||||||
Sales, net
|
$ | 2,334,566 | $ | 2,706,896 | $ | 2,718,207 | $ | 2,401,295 | ||||||||
Cost of sales
|
1,661,726 | 1,746,158 | 1,968,020 | 1,651,924 | ||||||||||||
Gross profit
|
672,840 | 960,738 | 750,187 | 749,371 | ||||||||||||
Operating expenses
|
2,089,325 | 1,973,839 | 1,991,960 | 1,464,458 | ||||||||||||
Operating loss
|
(1,416,485 | ) | (1,013,101 | ) | (1,241,773 | ) | (715,087 | ) | ||||||||
Nonoperating expenses
|
(7,587 | ) | (7,765 | ) | (8,490 | ) | (9,237 | ) | ||||||||
Net loss
|
$ | (1,424,072 | ) | $ | (1,020,866 | ) | $ | (1,250,263 | ) | $ | (724,324 | ) | ||||
Basic and Diluted loss per common share
|
$ | (0.02 | ) | $ | (0.01 | ) | $ | (0.01 | ) | $ | (0.01 | ) | ||||
Basic and Diluted weighted average
|
||||||||||||||||
common shares outstanding
|
94,626,120 | 99,833,963 | 101,309,939 | 104,179,748 |
Name
|
Age
|
Position
|
Frank Jaksch, Jr.
|
47
|
Chief Executive Officer and Director
|
Thomas Varvaro
|
46
|
Chief Financial Officer
|
Troy Rhonemus
|
43
|
Chief Operating Officer
|
Stephen R. Allen (2)(3)
|
66
|
Chairman of the Board
|
Stephen A. Block (1)(2)
|
71
|
Director
|
Reid Dabney (1)
|
64
|
Director
|
Hugh Dunkerley (2)
|
42
|
Director
|
Jeff Baxter (1)(3)
|
54
|
Director
|
Robert Fried (3)
|
56
|
Director
|
|
(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.
|
|
•
|
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”).
|
Metric
|
Floor
(in 1,000s)
|
Target
(in 1,000s)
|
Actual
(in 1,000’s)
|
Achievement % from Floor to Target (1)
|
Target Bonus
% (2)
|
Payout Bonus
% (3)
|
Base
Salary
|
Bonus
Payment
(4)
|
||||||||||||||||||||||||
Sales
|
$ | 14,149 | $ | 18,865 | $ | 15,313 | 24.7 | % | 25.0 | % | 6.2 | % | $ | 275,000 | $ | 16,973 | ||||||||||||||||
EBITDAS
|
N/A | $ | (1,885 | ) | $ | (1,880 | ) | 100.2 | % | 25.0 | % | 25.1 | % | $ | 275,000 | $ | 68,917 | |||||||||||||||
Total
|
$ | 85,890 |
Metric
|
Floor
(in 1,000s)
|
Target
(in 1,000s)
|
Actual
(in 1,000’s)
|
Achievement % from Floor to Target (1)
|
Target Bonus
% (2)
|
Payout Bonus
% (3)
|
Base
Salary
|
Bonus
Payment
(4)
|
||||||||||||||||||||||||
Sales
|
$ | 14,149 | $ | 18,865 | $ | 15,313 | 24.7 | % | 20.0 | % | 4.9 | % | $ | 225,000 | $ | 11,109 | ||||||||||||||||
EBITDAS
|
N/A | $ | (1,885 | ) | $ | (1,880 | ) | 100.2 | % | 20.0 | % | 20.0 | % | $ | 225,000 | $ | 45,110 | |||||||||||||||
Total
|
$ | 56,219 |
Metric
|
Floor
(in 1,000s)
|
Target
(in 1,000s)
|
Actual
(in 1,000’s)
|
Achievement % from Floor to Target (1)
|
Target Bonus
% (2)
|
Payout Bonus
% (3)
|
Base
Salary
|
Bonus
Payment
(4)
|
||||||||||||||||||||||||
Sales
|
$ | 14,149 | $ | 18,865 | $ | 15,313 | 24.7 | % | 15.0 | % | 3.7 | % | $ | 180,000 | $ | 6,665 | ||||||||||||||||
EBITDAS
|
N/A | $ | (1,885 | ) | $ | (1,880 | ) | 100.2 | % | 15.0 | % | 15.0 | % | $ | 180,000 | $ | 27,066 | |||||||||||||||
Total
|
$ | 33,731 |
(1)
|
Achievement % for sales is calculated by linearly interpolating the actual amount from floor to target, with floor being 0% and target being 100%. Achievement % for EBITDAS is calculated by following formula: Achievement % = 1-((Target – Actual)/Target)
|
(2)
|
Per employment agreement, Mr. Jaksch, Mr. Varvaro and Mr. Rhonemus are entitled to receive a bonus up to 50%, 40% and 30% of base salary, respectively. For each metric, 50% of this amount was allocated.
|
(3)
|
Payout bonus % is calculated by multiplying achievement % to target bonus %.
|
(4)
|
Bonus payment is calculated by multiplying payout bonus % to base salary
|
|
Name
|
Year
|
Salary
|
Bonus
|
Stock Awards
(1)
|
Option
Awards
(2)
|
All Other Compensation
(3)
|
Total
($)
|
||||||||||||||||||
Frank L. Jaksch Jr.
|
2015
|
$ | 275,000 | $ | 85,890 | - | $ | 114,857 | (4) | $ | 8,642 | $ | 484,389 | ||||||||||||
2014
|
$ | 275,000 | $ | 30,000 | $ | 352,500 | (5) | $ | 138,518 | (6) | $ | 7,748 | $ | 803,766 | |||||||||||
2013
|
$ | 225,000 | $ | 51,242 | - | - | $ | 6,827 | $ | 283,069 | |||||||||||||||
Thomas C. Varvaro
|
2015
|
$ | 225,000 | $ | 56,219 | - | $ | 96,229 | (7) | $ | 8,437 | $ | 385,885 | ||||||||||||
2014
|
$ | 225,000 | $ | 24,200 | $ | 352,500 | (8) | $ | 115,807 | (9) | $ | 6,816 | $ | 724,323 | |||||||||||
2013
|
$ | 175,000 | $ | 29,891 | - | - | $ | 3,900 | $ | 208,791 | |||||||||||||||
Troy A. Rhonemus(10)
|
2015
|
$ | 186,962 | $ | 33,731 | - | $ | 76,091 | (11) | $ | 6,642 | $ | 303,426 | ||||||||||||
2014
|
$ | 179,039 | - | - | $ | 358,723 | (12) | $ | 5,371 | $ | 543,133 | ||||||||||||||
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 originally had following vesting conditions: the earlier to occur of (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. 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. On March 7, 2016 the Company and each of the executives amended the restricted stock awards to provide that the awards shall not vest upon the market price of the Company’s common stock exceeding $2.50 per share or listing of the Company’s stock on a national securities exchange.
|
(2)
|
The amounts in the column titled “Option Awards” above reflect the aggregate grant date fair value of stock option awards for the fiscal years ended January 2, 2016 and January 3, 2015. See
Note 9
of the ChromaDex Corporation Consolidated Financial Report included in this Form 10-K for the year ended January 2, 2016 for a description of certain assumptions in the calculation of the fair value of the Company’s stock options.
|
(3)
|
The amounts in this column titled “All Other Compensation” above reflect matching 401(k) contributions.
|
(4)
|
On July 6, 2015, Frank L. Jaksch Jr. was granted options to purchase 150,000 shares of ChromaDex common stock at an exercise price of $1.22. These options expire on July 6, 2025 and 25% of the options vest on July 6, 2016 and the remaining 75% vest 2.083% monthly thereafter.
|
(5)
|
On January 2, 2014, Frank L. Jaksch Jr. was awarded 250,000 shares of restricted stock. T
hese shares vest upon the achievement of certain milestones.
As of January 2, 2016, these shares have not vested.
|
(6)
|
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 vested on June 18, 2015 and the remaining 75% vest 2.083% monthly thereafter.
|
(7)
|
On July 6, 2015, Thomas C. Varvaro was granted options to purchase 125,000 shares of ChromaDex common stock at an exercise price of $1.22. These options expire on July 6, 2025 and 25% of the options vest on July 6, 2016 and the remaining 75% vest 2.083% monthly thereafter.
|
(8)
|
On January 2, 2014, Thomas C. Varvaro was awarded 250,000 shares of restricted stock.
These shares vest upon the achievement of certain milestones.
As of January 2, 2016, these shares have not vested.
|
(9)
|
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 vested on June 18, 2015 and the remaining 75% vest 2.083% monthly thereafter.
|
(10)
|
Troy A. Rhonemus became the Company’s Chief Operating Officer on March 6, 2014.
|
(11)
|
On July 6, 2015, Troy A. Rhonemus was granted options to purchase 100,000 shares of ChromaDex common stock at an exercise price of $1.22. These options expire on July 6, 2025 and 25% of the options vest on July 6, 2016 and the remaining 75% vest 2.083% monthly thereafter.
|
(12)
|
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 $1.25. These options expire on June 18, 2024 and 25% of the options vested on June 18, 2015 and the remaining 75% vest 2.083% monthly thereafter.
|
Name
|
Fees
Earned or
Paid in
Cash ($)
|
Stock
Awards
($)(1)
|
Option
Awards
($)(2)
|
Non-Equity
Incentive Plan
Compensation ($)
|
Non-Qualified
Deferred
Compensation
Earnings ($)
|
All Other
Compensation
($)
|
Total
($)
|
|||||||||||||||||||||
Stephen Allen (3)
|
- | - | 74,548 | - | - | - | 74,548 | |||||||||||||||||||||
Stephen Block(4)
|
- | - | 60,002 | - | - | - | 60,002 | |||||||||||||||||||||
Reid Dabney(5)
|
- | - | 58,184 | - | - | - | 58,184 | |||||||||||||||||||||
Hugh Dunkerley(6)
|
- | - | 49,093 | - | - | - | 49,093 | |||||||||||||||||||||
Jeff Baxter(7)
|
- | - | 194,552 | - | - | - | 194,552 | |||||||||||||||||||||
Robert Fried(8)
|
- | - | 134,384 | - | - | - | 134,384 | |||||||||||||||||||||
Mark S. Germain(9)
|
- | 153,750 | - | - | - | - | 153,750 | |||||||||||||||||||||
Glenn L. Halpryn(10)
|
- | - | 54,547 | - | - | - | 54,547 |
(1)
|
The amounts in the column titled “Stock Awards” above reflect the aggregate award date fair value of 125,000 shares of fully vested Company’s common stock awarded to Mark Germain on April 16, 2015. The fair value of the stock award was based on the trading price of the Company’s common stock on the date of award.
|
(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 2, 2016. See
Note 9
of the ChromaDex Corporation Consolidated Financial Report included in this Form 10-K for the year ended January 2, 2016 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. Fried, the options have an exercise price of $1.22 and, except as stated below with respect to options held by Mr. Halpryn, vest 1/12
th
every month for 12 months commencing in August 2015.
|
(3)
|
On July 6, 2015, Stephen Allen was awarded the option to purchase 102,500 shares of the Company’s common stock.
|
(4)
|
On July 6, 2015, Stephen Block was awarded the option to purchase 82,500 shares of the Company’s common stock.
|
(5)
|
On July 6, 2015, Reid Dabney was awarded the option to purchase 80,000 shares of the Company’s common stock.
|
(6)
|
On July 6, 2015, Hugh Dunkerley was awarded the option to purchase 67,500 shares of the Company’s common stock.
|
(7)
|
On July 6, 2015, Jeff Baxter was awarded the option to purchase 267,500 shares of the Company’s common stock.
|
(8)
|
On July 30, 2015, Robert Fried was awarded the option to purchase 200,000 shares of the Companny’s common stock with an exercise price of $1.10 per share.
|
(9)
|
On April 16, 2015, Mark Germain resigned from the Board of Directors and was awarded 125,000 shares of common stock. Mr. Germain’s unvested restricted stock and options became fully vested upon his resignation from the Board of Directors.
|
(10)
|
On July 6, 2015, Glenn Halpryn was awarded the option to purchase 75,000 shares of the Company’s common stock. On July 9, 2015, Mr. Halpryn resigned from the Board of Directors and his unvested restricted stock and options became fully vested upon his resignation from the Board of Directors.
|
Name
|
Grant Date
|
All Other Option Awards: Number of Securities Underlying Options
|
Exercise or Base Price of Option Awards ($/Share)(1)
|
Grant Date
Fair Value
of Stock
and Option
Awards($)(2)
|
||||||||||
Frank L. Jaksch Jr.
|
7/6/2015
|
150,000 | $ | 1.22 | $ | 114,857 | ||||||||
Thomas C. Varvaro
|
7/6/2015
|
125,000 | $ | 1.22 | $ | 96,229 | ||||||||
Troy A. Rhonemus
|
7/6/2015
|
100,000 | $ | 1.22 | $ | 76,091 |
(1)
|
The exercise price of the stock options awarded was determined in accordance with
our Second Amended and Restated 2007 Equity Incentive Plan, which provides that the exercise price for an option granted be the average of the highest and lowest trading prices of our common stock on the date of grant.
|
(2)
|
Based upon the aggregate grant date fair value of stock option awards. See
Note 9
of the ChromaDex Corporation Consolidated Financial Report included in this Form 10-K for the year ended January 2, 2016 for a description of certain assumptions in the calculation of the fair value of the Company’s stock options.
|
Option Awards
|
Restricted Stock
|
|||||||||||||
Name
|
Number of Shares Acquired on Exercise(#)
|
Value Realized
on Exercise ($)
|
Number of Shares Vested (#)
|
Value Realized
on Vesting ($)
|
||||||||||
Frank L. Jaksch Jr.
|
-
|
$
|
-
|
-
|
$
|
-
|
||||||||
Thomas C. Varvaro
|
-
|
$
|
-
|
-
|
$
|
-
|
||||||||
Troy A. Rhonemus
|
-
|
$
|
-
|
-
|
$
|
-
|
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
|
|
|||||||||
125,000
|
|
|
—
|
—
|
|
1.54
|
|
|
5/10/2021
|
|||||||||||
208,333
|
41,667
|
(1)
|
—
|
0.64
|
8/28/2022
|
|||||||||||||||
1,901,418
|
—
|
—
|
0.945
|
9/15/2022
|
||||||||||||||||
56,250
|
93,750
|
(2)
|
—
|
1.25
|
6/18/2024
|
|||||||||||||||
—
|
150,000
|
(3)
|
—
|
1.22
|
7/6/2025
|
|||||||||||||||
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
|
|
|||||||||
4,288
|
|
|
—
|
—
|
|
1.54
|
|
|
5/10/2021
|
|||||||||||
166,667
|
33,333
|
(4)
|
—
|
0.64
|
8/28/2022
|
|||||||||||||||
863,511
|
—
|
—
|
0.945
|
9/15/2022
|
||||||||||||||||
46,875
|
78,125
|
(5)
|
—
|
1.25
|
6/18/2024
|
|||||||||||||||
—
|
125,000
|
(6)
|
—
|
1.22
|
7/6/2025
|
|||||||||||||||
Troy A. Rhonemus
|
|
291,667
|
|
|
108,333
|
(7)
|
—
|
|
0.63
|
|
|
1/25/2023
|
||||||||
|
152,778
|
|
|
97,222
|
(8)
|
—
|
|
1.75
|
|
|
2/21/2024
|
|||||||||
|
28,125
|
|
|
46,875
|
(9)
|
—
|
|
1.25
|
|
|
6/18/2024
|
|||||||||
—
|
100,000
|
(10)
|
—
|
1.22
|
7/6/2025
|
(1)
|
5,208 of Mr. Jaksch’s options vest on 28
th
of every month through August 28, 2016.
|
(2)
|
3,125 of Mr. Jaksch’s options vest on 18
th
of every month through June 18, 2018.
|
(3)
|
37,500 of Mr. Jaksch’s options vest on July 6, 2016 and 3,125 of his options vest on 6
th
of every month thereafter through July 6, 2019.
|
(4)
|
4,167 of Mr. Varvaro’s options vest on 28
th
of every month through August 28, 2016.
|
(5)
|
2,604 of Mr. Varvaro’s options vest on 18
th
of every month through June 18, 2018.
|
(6)
|
31,250 of Mr. Varvaro’s options vest on July 6, 2016 and 2,604 of his options vest on 6
th
of every month thereafter through July 6, 2019.
|
(7)
|
8,333 of Mr. Rhonemus’ options vest on 25
th
of every month through January 25, 2017.
|
(8)
|
6,944 of Mr. Rhonemus’ options vest on 21
st
of every month through February 21, 2017.
|
(9)
|
1,563 of Mr. Rhonemus’ options vest on 18
th
of every month through June 18, 2018.
|
(10)
|
25,000 of Mr. Rhonemus’ options vest on July 6, 2016 and 2,083 of his options vest on 6
th
of every month thereafter through July 6, 2019.
|
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 (#) (1
|
Equity incentive plan
awards: Market or
payout value of
unearned shares, units
or other rights that
have not vested ($) (2
|
||||||||||
Frank L. Jaksch Jr.
|
-
|
|
-
|
500,000
|
$
|
610,000
|
||||||||
Thomas C. Varvaro
|
-
|
|
-
|
500,000
|
$
|
610,000
|
||||||||
Troy A. Rhonemus
|
-
|
|
-
|
-
|
$
|
-
|
(1)
|
On June 6, 2012, Frank L. Jaksch Jr. and Thomas C. Varvaro were each awarded 250,000 shares of restricted stock. In addition, on January 2, 2014, Mr. Jaksch and Mr. Varvaro were each awarded 250,000 shares each of restricted stock. These shares were to originally vest upon the earlier to occur of the following: (i) the market price of the Company’s stock exceeds a certain price, or (ii) one of other certain triggering events, including the termination of the officers and members of the board of directors without cause for any reason. On March 7, 2016, the Company and each of the executives amended the restricted stock awards to provide that the awards shall not vest upon the market price of the Company’s stock exceeding a certain price or listing of the Company’s stock on a national securities exchange.
|
(2)
|
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 2, 2016.
|
Name of Beneficial Owner (1)
|
Shares of Common Stock Beneficially Owned (2)
|
Aggregate Percentage Ownership
|
||||||
Dr. Phillip Frost (3)
|
16,052,941 | 14.62 | % | |||||
Michael Brauser (4)
|
9,166,388 | 8.34 | % | |||||
Barry Honig (5)
|
8,817,832 | 8.04 | % | |||||
Black Sheep, FLP (6)
|
6,225,155 | 5.68 | % | |||||
Directors
|
||||||||
Stephen Allen (7)
|
367,917 | * | ||||||
Stephen Block (8)
|
646,231 | * | ||||||
Reid Dabney (9)
|
706,867 | * | ||||||
Hugh Dunkerley (10)
|
552,025 | * | ||||||
Jeff Baxter (11)
|
222,917 | * | ||||||
Robert Fried (12)
|
344,169 | * | ||||||
Frank L. Jaksch Jr. (13)
|
11,922,655 | 10.53 | % | |||||
Named Executive Officers
|
||||||||
Frank L. Jaksch Jr., Chief Executive Officer
|
(See above)
|
|||||||
Thomas C. Varvaro, Chief Financial Officer (14)
|
2,452,124 | 2.20 | % | |||||
Troy Rhonemus, Chief Operating Officer (15)
|
554,931 | * | ||||||
All directors and executive officers as a group
|
||||||||
(7 Directors plus Chief Financial Officer
|
||||||||
and Chief Operating Officer)
(16)
|
17,769,834 | 15.03 | % |
*
|
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 6,386,273 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) 1,209,098 shares of common stock; and (ii) through Michael & Betsy Brauser TBE, 3,626,428 shares of common stock. Indirect ownership through (i) 871,270 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 held by Mr. Brauser and 120,000 warrants held by Grander Holdings, Inc. 401K Profit Sharing Plan.
|
(5)
|
Direct ownership of 4,832,059 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) 943,966 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; (iv) 413,336 shares owned by GRQ Consultants Inc. Roth 401K FBO Barry Honig, of which Mr. Honig has voting and investment power; and (v) 89,900 shares owned by GRQ Consultants, Inc., of which Mr. Honig is the President. Includes 205,000 stock options held by Mr. Honig exercisable within 60 days. Excludes (i) 206,664 shares of common stock underlying warrants held by GRQ Consultants, Inc. 401K and (ii) 206,668 shares of common stock underlying warrants held by GRQ Consultants, Inc. Roth 401K FBO Barry Honig, both of which contain a 4.99% beneficial ownership blocker.
|
(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 367,917 stock options exercisable within 60 days.
|
(8)
|
Includes 596,231 stock options exercisable within 60 days.
|
(9)
|
Includes 696,867 stock options exercisable within 60 days.
|
(10)
|
Includes 542,025 stock options exercisable within 60 days.
|
(11)
|
Includes 222,917 stock options exercisable within 60 days.
|
(12)
|
Direct ownership of 155,937 shares of common stock. Indirect ownership through 20,232 shares held by Jeremy Fried and 18,000 shares held by Benjamin Fried, who are both sons of Robert Fried. Includes 150,000 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 3,674,335 stock options exercisable within 60 days.
|
(14)
|
Includes 1,945,124 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 539,931 stock options exercisable within 60 days.
|
(16)
|
Includes 8,735,345 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
|
15,734,755 | $ | 1.15 | 3,321,226 | (1) | |||||||
Equity compensation plans not approved by security holders
|
- | - | - | |||||||||
Total
|
15,734,755 | $ | 1.15 | 3,321,226 | (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.
|
2015
|
2014
|
|||||||
Audit Fees (1)
|
$ | 271,000 | $ | 229,000 | ||||
Audit-Related Fees (2)
|
$ | 15,000 | $ | 5,000 | ||||
Tax Fees (3)
|
$ | — | $ | — | ||||
All Other Fees
|
$ | — | $ | — |
(1)
|
Audit fees relate to professional services rendered in connection with the audit of the Company’s annual financial statements and internal control over financial reporting and quarterly review of financial statements included in the Company’s Quarterly Reports on Form 10-Q.
|
(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 17, 2016
|
||
Frank L. Jaksch Jr.
|
(Principal Executive Officer)
|
|||
/s/ THOMAS C. VARVARO
|
Chief Financial Officer and Secretary
|
March 17, 2016
|
||
Thomas C. Varvaro
|
(Principal Financial and Accounting Officer)
|
|||
/s/ STEPHEN ALLEN
|
Chairman of the Board and Director
|
March 17, 2016
|
||
Stephen Allen
|
||||
/s/ STEPHEN BLOCK
|
Director
|
March 17, 2016
|
||
Stephen Block
|
||||
/s/ REID DABNEY
|
Director
|
March 17, 2016
|
||
Reid Dabney
|
||||
/s/ HUGH DUNKERLEY
|
Director
|
March 17, 2016
|
||
Hugh Dunkerley
|
||||
/s/ JEFF BAXTER
|
Director
|
March 17, 2016
|
||
Jeff Baxter
|
||||
/s/ ROBERT FRIED
|
Director
|
March 17, 2016
|
||
Robert Fried
|
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)
|
|
4.4
|
Form of Stock Certificate representing shares of ChromaDex Corporation Common Stock (New design effective as of January 1, 2016)
v
|
|
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
|
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)
|
|
10.25
|
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)*
|
|
10.26
|
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)*
|
10.27
|
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)*
|
|
10.28
|
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)+
|
|
10.29
|
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)*
|
|
10.30
|
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)*
|
|
10.31
|
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 (incorporated by reference from, and filed as Exhibit 10.39 to the Company’s Annual report on Form 10-K filed with the Commission on March 19, 2015)
|
|
10.32
|
License Agreement, effective as of October 15, 2014 between University of Mississippi and ChromaDex, Inc. (incorporated by reference from, and filed as Exhibit 10.40 to the Company’s Annual report on Form 10-K filed with the Commission on March 19, 2015)*
|
|
10.33
|
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 (incorporated by reference from, and filed as Exhibit 10.41 to the Company’s Annual report on Form 10-K filed with the Commission on March 19, 2015)
|
|
10.34
|
Share Transfer Agreement by and between ChromaDex Corporation and Emprise Capital Corporation dated November 25, 2014 (incorporated by reference from, and filed as Exhibit 10.42 to the Company’s Annual report on Form 10-K filed with the Commission on March 19, 2015)
|
|
10.35
|
Exclusive License and Supply Agreement, effective as of May 12, 2015 between Suntava, Inc. 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 13, 2015)*
|
|
10.36
|
Restated and Amended License Agreement, effective as of June 3, 2015 between the University of Mississippi 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 August 13, 2015)*
|
|
10.37
|
Amendment No. 1 to 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 June 17, 2015 (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 19, 2015)
|
|
10.38
|
Exclusive Supply Agreement, effective as of August 27, 2015 between Healthspan Research, LLC 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 12, 2015)*
|
|
10.39
|
Limited Liability Company Agreement, effective as of August 27, 2015 between Healthspan Research LLC 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 12, 2015)*
|
|
Interest Purchase Agreement, effective as of August 27, 2015 between Healthspan Research LLC and ChromaDex, Inc. (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 November 12, 2015)*
|
||
10.40
|
Take or Pay Purchase Agreement for nicotinamide riboside chloride, effective as of September 21, 2015, between W.R. Grace & Co. Conn. And ChromaDex, Inc. (incorporated by reference from, and filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 12, 2015)*
|
|
10.41
|
Supply Agreement, effective as of August 28, 2015 and First Addendum to Supply Agreement, effective as of September 30, 2015 between Nectar7 LLC and ChromaDex, Inc. (incorporated by reference from, and filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 12, 2015)*
|
10.42
|
Form of Securities Purchase Agreement, dated as of November 4, 2015, between existing stockholders and ChromaDex Corporation. (incorporated by reference from and filed as Exhibit 10.01 to the Company’s Current Report on Form 8-K filed with the Commission on November 5, 2015)
|
|
10.43
|
Form of Warrant under the Securities Purchase Agreement, dated as of November 4, 2015, between existing stockholders and ChromaDex Corporation (incorporated by reference from and filed as Exhibit 10.02 to the Company’s Current Report on Form 8-K filed with the Commission on November 5, 2015)
|
|
10.44
|
Joint Development Agreement, effective as of October 30, 2015, between the Procter & Gamble Company and ChromaDex, Inc.
v
**
|
|
10.45
|
Form of Securities Purchase Agreement, dated as of March 11, 2016, between an existing stockholder and ChromaDex Corporation (incorporated by reference from and filed as Exhibit 10.01 to the Company’s Current Report on Form 8-K filed with the Commission on March 11, 2016)
|
|
10.46
|
Form of Warrant under the Securities Purchase Agreement, dated as of March 11, 2016, between an existing stockholder and ChromaDex Corporation (incorporated by reference from and filed as Exhibit 10.02 to the Company’s Current Report on Form 8-K filed with the Commission on March 11, 2016)
|
|
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.
|
+
|
Indicates management contract or compensatory plan or arrangement.
|
*
|
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.
|
Preamble
|
2
|
|
Background
|
2
|
|
Articles
|
||
1
|
Definitions
|
2
|
2
|
Collaborative Project
|
2
|
3
|
Confidentiality
|
3
|
4
|
INVENTION Rights
|
4
|
5
|
Work With THIRD PARTIES
|
6
|
6
|
Sampling of NR
|
6
|
7
|
Term and Termination
|
6
|
8
|
Arbitration
|
7
|
9
|
Limited Scope of This Collaboration
|
8
|
10
|
Supply
|
8
|
11
|
Miscellaneous
|
8
|
Schedules
|
||
Schedule 1.1 – Definitions
|
13
|
|
Schedule 2.1 – PROJECT
|
16
|
1.
|
Definitions
|
1.1.
|
General.
The capitalized terms defined in this JDA will have the meanings indicated for purposes of this JDA; non-capitalized terms have their ordinary meaning as determined by context, subject matter, and/or scope, except as noted in Paragraph 11.2(Construction). A list of defined terms with definitions or a cross-reference to the location of their respective definition within the JDA is set forth in
Schedule 1.1
.
|
2.
|
Collaborative Project
|
2.1.
|
PROJECT.
The PARTIES will collaborate on the project, including key milestones and success criteria, set forth in Schedule 2.1 (“
PROJECT
”), which is expected to result in the development of STABLE NR and/or PRODUCTs intended for application in the COLLABORATION FIELD. The PARTIES may amend Schedule 2.1 by mutual agreement from time to time pursuant to Paragraph 11.4 (Entire Agreement / Amendment).
|
2.1.1.
|
Summary of the PROJECT.
The PROJECT generally relates to the identification and use of STABLE NR in P&G’s consumer products for the [*].
|
2.1.2.
|
Work Outside the Scope of the PROJECT.
Notwithstanding anything to contrary in this JDA, the following work is independent from the PROJECT:
|
2.1.2.1.
|
methods of synthesizing NR; and
|
2.1.2.2.
|
physically isolating NR from the external environment via particle coating or microencapsulation.
|
2.2.
|
Funding.
Except as specifically provided to the contrary in this JDA, all costs, fees, and/or expenses incurred in connection with this JDA will be paid by the PARTY incurring such costs, fees and/or expenses.
|
3.
|
Confidentiality
|
3.1.
|
Disclosure of INFORMATION.
In connection with discussions under this JDA, it might be necessary for one or both PARTIES to disclose proprietary information to the other PARTY relating to the PROJECT. Such proprietary information may include product specifications, product samples and/or business plans. The PARTY disclosing (“
DISCLOSER
”) its proprietary information (“
INFORMATION
”) to the other PARTY (“
RECEIVER
”) will disclose INFORMATION under the following conditions, which are understood to be acceptable to the RECEIVER.
|
3.1.1.
|
Held in Confidence.
INFORMATION disclosed to the RECEIVER will be held in confidence by the RECEIVER.
|
3.1.2.
|
Reasonable Steps.
The RECEIVER will take such steps as may be reasonably necessary to prevent the disclosure of INFORMATION to THIRD PARTIES.
|
3.1.3.
|
Limited Use.
The RECEIVER will not disclose or utilize INFORMATION other than for the PROJECT; without first having obtained the written consent of the DISCLOSER to such disclosure or utilization.
|
3.2.
|
Limits to Obligations of Confidentiality.
The commitments set forth in Paragraph 3.1 (Disclosure of INFORMATION) will not extend to any portion of INFORMATION which the RECEIVER can prove:
|
3.2.1.
|
is known to the RECEIVER prior to the receipt from the DISCLOSER under this JDA or is information generally available to the public;
|
3.2.2.
|
hereafter, through no act of the RECEIVER, becomes information generally available to the public;
|
3.2.3.
|
corresponds to information furnished to the RECEIVER by a THIRD PARTY having a bona fide right to do so and not having any confidential obligation, direct or indirect, to the DISCLOSER with respect to the same;
|
3.2.4.
|
corresponds to information furnished by the DISCLOSER to any THIRD PARTY on a non-confidential basis; or
|
3.2.5.
|
was developed by the RECEIVER independently of the disclosure of INFORMATION by the DISCLOSER as established by competent documentary evidence.
|
3.3.
|
Required Disclosure by Law / Regulation.
If RECEIVER is required by law or government regulation to disclose DISCLOSER INFORMATION (“
COMPELLED DISCLOSURE
”), then RECEIVER will:
(a)
provide prompt reasonable prior notice to the DISCLOSER of the COMPELLED DISCLOSURE so that DISCLOSER may take steps to protect DISCLOSER’s confidential information, and
(b)
provide reasonable cooperation to DISCLOSER in DISCLOSER’s protecting against the COMPELLED DISCLOSURE and/or obtaining a protective order narrowing the scope of the COMPELLED DISCLOSURE or use of the INFORMATION. If DISCLOSER is unable to obtain such protection against the COMPELLED DISCLOSURE, then despite the commitments set forth in Paragraph 3.1 (Disclosure of INFORMATION) RECIPIENT will be entitled to disclose the DISCLOSER’s INFORMATION
(aa)
only as and to the extent necessary to legally comply with the COMPELLED DISCLOSURE and
(bb)
on condition that RECIPIENT exercises reasonable efforts to obtain reliable assurance that the DISCLOSER’s INFORMATION is treated as confidential to the extent allowable by the law or government regulation requiring the COMPELLED DISCLOSURE. Such COMPELLED DISCLOSURE does not otherwise waive the non-use and confidentiality obligations set forth in Paragraph 3.1 (Disclosure of INFORMATION) with respect to other uses and/or other disclosures of such INFORMATION.
|
3.4.
|
INVENTIONs
Considered INFORMATION.
INVENTIONs will be considered INFORMATION of the owning PARTY(IES), as ownership is set forth in Article 4 (INVENTION Rights). If one PARTY is relieved of its obligations of confidentiality pursuant to any subparagraphs of Paragraph 3.2 (Limits to Obligations of Confidentiality), then the other PARTY will also be considered so relieved of its obligations of confidentiality with respect to the subject INFORMATION.
|
3.5.
|
Form of Disclosure.
INFORMATION will be subject to obligations of confidentiality and restrictions on use or disclosure under this JDA only if it is either:
|
3.5.1.
|
in writing or other tangible form bearing the date of disclosure and clearly marked as “confidential” when disclosed; or
|
3.5.2.
|
if not in tangible form (e.g., disclosed orally or observed), then identified as confidential when revealed and summarized in a writing clearly marked as “confidential” and delivered to the RECEIVER within 30 days of such disclosure.
|
3.6.
|
Termination of Confidentiality Obligations.
The obligations of confidentiality and restrictions on use under this Article 3 will cease 5 years from the end of the TERM.
|
4.
|
INVENTION Rights
|
4.1.
|
INVENTION Rights.
P&G will own all INVENTIONs.
|
4.2.
|
Licenses to INVENTIONS.
|
4.2.1.
|
INVENTIONS in the COLLABORATION FIELD.
Upon termination or expiry of this JDA, if there is no commercial agreement between the PARTIES for the purchase of NR by P&G from COLLABORATION PARTNER then P&G will grant to COLLABORATION PARTNER a reasonable-royalty bearing, exclusive, perpetual, irrevocable, worldwide license to PATENT RIGHTS for INVENTIONS in the COLLABORATION FIELD.
|
4.2.2.
|
OUTSIDE-THE-COLLABORATION FIELD INVENTIONS.
P&G hereby grants COLLABORATION PARTNER an exclusive royalty-free, perpetual, irrevocable, worldwide license to PATENT RIGHTS for OUTSIDE-THE-COLLABORATION FIELD INVENTIONS.
|
4.2.3.
|
License Term.
The licenses in Paragraph 4.2.1 (INVENTIONS in the COLLABORATION FIELD) and 4.2.2 (OUTSIDE-THE-COLLABORATION FIELD INVENTIONS) will terminate upon expiration of the last of the relevant PATENT RIGHTS.
|
4.2.4.
|
Licenses Subject to Confidentiality Obligation.
The licenses granted pursuant to this Article 4 are subject to the confidentiality obligations set forth in Article
3
(Confidentiality).
|
4.3.
|
Cooperation in Transferring Title.
The PARTIES will cooperate fully with each other and/or the other PARTY's attorneys in vesting title as provided in Paragraph 4.1 (INVENTION Rights).
|
4.4.
|
Notification of INVENTIONs.
Each PARTY will provide the other PARTY with timely notification in writing of all INVENTIONs.
|
4.5.
|
PROSECUTION of Patent Applications.
P&G will conduct PROSECUTION of any patent applications filed on INVENTIONS at its sole discretion and will be responsible for costs associated with such PROSECUTION.
|
4.6.
|
Statutory Inventor Payments.
Despite Paragraph 4.5 (PROSECUTION of Patent Applications), any payments, other obligations, and/or acts due to an inventor under statutory national laws will be the responsibility of the inventor’s employer. Neither PARTY will be obligated to indemnify, support, and/or remind the inventor’s employer of any such payments, other obligations, and/or acts.
|
4.7.
|
Review of Patent Applications Prior to Filing.
A PARTY will not file any patent application that discloses INFORMATION of the other PARTY and/or claims an INVENTION without prior notice to, and review by, the other PARTY. The reviewing PARTY will be given at least 20 BUSINESS DAYs in which to review and comment on the patent application, unless the reviewing PARTY agrees on a term which is shorter than 20 BUSINESS DAYs. The reviewing PARTY will have the right to require that any INFORMATION of the reviewing PARTY be removed from the patent application, in accordance with Article
3
(Confidentiality); with the limited exception that those portions of INFORMATION that are INVENTIONs and are required to be disclosed by the filing PARTY in the subject patent application to secure patent rights to PRODUCT INVENTIONs and/or STABLE NR INVENTIONs entitled to the filing PARTY under this JDA, may remain in the patent application.
|
5.
|
Work With THIRD PARTIES
|
5.1.
|
Work with THIRD PARTIES.
Neither PARTY will, during the TERM, conduct collaborative work with any THIRD PARTY for a project within the COLLABORATION FIELD. Either PARTY is otherwise free to enter into other collaborative and/or service projects with any THIRD PARTY.
|
6.
|
Sampling of NR
|
6.1.
|
Sampling.
COLLABORATION PARTNER grants P&G the right to sample NR within P&G to explore physically isolating NR from the external environment via particle coating or microencapsulation and methods for synthesizing NR, as set forth in Paragraph 2.1.2.
|
6.2.
|
Sampling Inventions.
For purposes of clarification, any work result, creative idea, development, or invention, whether or not patentable, conceived as a direct result of the sampling pursuant to Paragraph 6.1 (Sampling) will
not
be considered “a direct result of work conducted under this JDA” and therefore not subject to any INVENTION rights obligations under this JDA. In the absence of a separate invention rights agreement governing such sampling, common law inventorship rights will apply.
|
6.3.
|
Purchase Requirements
.
In the event a) sampling in Paragraph 6.1 (Sampling) and Paragraph 6.2 (Sampling Inventions) results in any creative idea, design development, invention, know-how, or work result (whether patentable or not patentable); b) there is no commercial agreement between the PARTIES for the purchase of NR or STABLE NR by P&G from COLLABORATION PARTNER; and c) if P&G launches a [*] product containing NR or STABLE NR within 2 years from the date of Termination of this JDA; P&G will purchase its requirements for NR for use either by itself or in the preparation of STABLE NR in connection with [*] from COLLABORATION PARTNER at COLLABORATION PARTNER’S MFN PRICING for a period of or 3 years from the date of the first retail sale of any such PRODUCT.
|
6.4.
|
Confidentiality of Sampled Materials.
P&G will treat sampled NR and related COLLABORATION PARTNER INFORMATION as INFORMATION pursuant to Article 3 (Confidentiality).
|
7.
|
Term and Termination
|
7.1.
|
Term.
This JDA is effective from the EFFECTIVE DATE and terminates 2 years from the EFFECTIVE DATE unless terminated earlier under Paragraph 7.2 (Termination of JDA) or Paragraph 10.1 (Resulting Supply Agreement) (“
TERM
”).
|
7.2.
|
Expiration / Termination of JDA.
Either PARTY may terminate this JDA at any time by giving written notice to the other PARTY at least 90 days before such termination becomes effective.
|
7.3.
|
Surviving Rights & Obligations.
Termination or expiration of this JDA will not relieve either PARTY of any obligations accruing prior to such termination or expiration, including those set forth in Articles 3 (Confidentiality), 4 (INVENTION Rights), 6 (Sampling of NR), 7.4 (Non-circumvent); 8 (Arbitration), and 10 (Supply); and Paragraph 11.6 (Negotiations on Royalties).
|
7.4.
|
Non- Circumvent
.
In the event there is no commercial agreement between the PARTIES for the purchase of NR or STABLE NR by P&G from COLLABORATION PARTNER and if P&G launches a [*] product containing NR or STABLE NR within 2 years from the date of Termination of this JDA, P&G will purchase it’s requirements for NR for use either by itself or in the preparation of STABLE NR in connection with [*] from COLLABORATION PARTNER at COLLABORATION PARTNER’S MFN PRICING for a period of 3 years from the date of the first retail sale of any such PRODUCT.
|
7.5.
|
Covenant Not to Circumvent.
In the event there is no commercial agreement between the PARTIES for the purchase of NR or STABLE NR by P&G from COLLABORATION PARTNER, P&G agrees not to submit for any new PATENT RIGHTS or acquire any PATENT RIGHTS from THIRD PARTIES for NR within 2 years after the date of Termination of this JDA. The PARTIES further agree not to challenge or knowingly infringe each other’s NR PATENT RIGHTS.
|
8.
|
Arbitration
|
8.1.
|
Binding Arbitration of Disputes.
As the exclusive means of initiating adversarial proceedings to resolve any dispute arising out of this JDA (“
DISPUTE
”) that the PARTIES are unable to resolve within 90 days after written notice by one PARTY to the other of the existence of such DISPUTE, either PARTY may demand that any such DISPUTE be resolved by arbitration administered by the American Arbitration Association (“
AAA
”) in accordance with the AAA’s commercial arbitration rules. Each PARTY hereby consents to any such DISPUTE being so resolved. The arbitration will be conducted in New York, U.S.A. except as may otherwise be agreed by the PARTIES. Each DISPUTE will be submitted to a single impartial arbitrator mutually selected by the PARTIES. No discovery by either PARTY will be permitted unless the arbitrator determines that the PARTY requesting such discovery has a substantial, demonstrable need. The arbitrator will make final determinations as to any discovery disputes and all other procedural matters. If any PARTY fails to comply with the procedures in any arbitration in a manner deemed material by the arbitrator, then the arbitrator will fix a reasonable time for compliance, and if the PARTY does not comply within such period, then a remedy deemed just by the arbitrator, including an award of default, may be imposed. The decision of the arbitrator will be rendered no later than 120 days after commencement of the arbitration period. The costs of arbitration will be borne by the PARTY against whom the arbitral decision is made. Judgment on any award rendered in any such arbitration will be binding upon the PARTIES and will be enforceable by any court of competent jurisdiction.
|
9.
|
Limited Scope of This Collaboration
|
9.1.
|
Other Agreements Not Precluded.
This JDA will not prevent the PARTIES from entering into other agreements between each other (including, e.g., joint development agreements, confidentiality agreements, material transfer / non-analysis agreements), or terminate existing agreements with each other, which have terms and conditions that do not conform to this JDA, so long as such agreements are (or have been) executed by authorized officers of the PARTIES.
|
9.2.
|
No Patent or Product Warranties Created.
No patent or product warranties are granted or implied under this JDA. No obligation to conduct infringement clearances on products utilizing STABLE NR or PATENT RIGHTS is granted or implied under this JDA.
|
10.
|
Supply
|
10.1.
|
Resulting Supply Agreement.
The PARTIES mutually agree that within the later of twelve (12) months from the Effective Date or six (6) months from the development of STABLE NR, they will begin good faith negotiations for an Exclusive Supply Agreement for STABLE NR for use within the COLLABORATION FIELD. For purposes of clarification, it is understood that it is not the intent of the PARTIES, and the PARTIES will not include any terms in such subsequently negotiated Exclusive Supply Agreement that would be considered illegal under relevant competition laws. If the PARTIES fail to execute a mutually beneficial definitive Exclusive Supply Agreement within six (6) months of beginning negotiations, this JDA may be terminated immediately by COLLABORATION PARTNER upon written notice.
|
11.
|
Miscellaneous
|
11.1.
|
Applicable Law.
All matters arising under or relating to
this JDA are governed by the laws of the State of New York applicable to contracts made and performed entirely in such state, without regard to any principle of conflict or choice of laws that would cause the application of the laws of any other jurisdiction.
|
11.2.
|
Construction.
The words “hereof,” “herein” and “hereunder” and words of similar import when used in this JDA will refer to this JDA as a whole and not to any particular provision of this JDA. The use of the words “include” or “including” in this AGREEMENT will be by way of example rather than by limitation. The phrase “and/or” will be deemed to mean, e.g., X or Y or both. The meanings given to terms defined in this JDA will be equally applicable to both the singular and plural forms of these terms. Unless stated specifically to the contrary, all amounts referenced in this JDA are stated in, and must be paid in, United States dollars, and the symbol “$” means United States dollars.
|
11.2.1.
|
Agreement Negotiated.
The PARTIES have participated jointly in the negotiation and drafting of this JDA. If any ambiguity or question of intent or interpretation arises, this JDA will be construed as if drafted jointly by the PARTIES, and no presumption or burden of proof will arise favoring or disfavoring any PARTY by virtue of the authorship of any of the provisions of this JDA.
|
11.2.2.
|
Headings.
Headings or titles to sections or attachments of this JDA are provided for convenience and are not to be used in the construction or interpretation of this JDA. All references to sections and attachments will be to the sections and attachments of this JDA, unless specifically noted otherwise. Reference to a section includes the referenced section, and all sub-sections included within the referenced section.
|
11.3.
|
Counterparts.
This JDA may be executed in one or more counterparts, each of which will be deemed to be an original, but all of which will constitute one and the same instrument. A facsimile or .pdf copy of a signature of a PARTY will have the same effect and validity as an original signature.
|
11.4.
|
Entire Agreement / Amendments.
This JDA, including any attached Schedules and Exhibits, constitutes the entire understanding between the PARTIES with respect to the subject matter contained herein and supersedes all prior agreements, understandings and arrangements whether oral or written between the PARTIES relating to the subject matter hereof, except as expressly set forth herein. No amendment to this JDA will be effective unless it is in a subsequent writing executed with the same formalities as this JDA.
|
11.5.
|
Force Majeure.
No PARTY will be responsible for delays or failures to perform resulting from events beyond its control but will have a responsibility to mitigate any damage that might arise as a result of any such event. Such events include: acts of nature, epidemics; fire; government restrictions or other government acts; insurrection; power failures; strike, union disturbance, or other labor problems; riots; terrorism or threats of terrorism; or war (whether or not declared); earthquakes, floods, or other disasters. Upon the occurrence of any event of the type referred to in this Paragraph 11.5, the affected PARTY will give prompt notice to the other PARTY, together with a description of the event and the duration for which the affected PARTY expects its ability to comply with the provisions of this JDA to be affected. The affected PARTY will devote reasonable efforts to remedy to the extent possible the condition giving rise to the failure event and to resume performance of its obligations under this JDA as promptly as possible.
|
11.6.
|
Negotiations on Royalties.
Where this JDA provides for a reasonable royalty rate, the PARTIES will endeavor to agree on the royalty. Should an agreement not be reached within 90 days from the start of negotiations, upon one PARTY’s written request, the PARTIES will first seek agreement by non-binding mediation and only thereafter will the PARTIES resort to arbitration pursuant to Article 8 (Arbitration). For such arbitration where the issue is limited to agreement on the royalty, the arbitration pursuant to Article 8 (Arbitration) will further require that each PARTY submit to the arbitrator and exchange with the other, in accordance with a procedure to be established by the arbitrator, its best offer. The arbitrator will be limited to awarding only one or the other of the two positions submitted.
|
11.7.
|
Joint Research Agreement Statement for US Patent Prosecution.
A PARTY desiring to invoke 35 USC §103(c)(2) and post American Invents Act 35 USC §102(c) during the PROSECUTION of PATENT RIGHTS, will be permitted to disclose the existence of this JDA and the names of the PARTIES thereto, and to make the statement required by 37 CFR §1.104(c)(4)(iii) on the record during PROSECUTION. Despite the foregoing, neither PARTY will be obligated to execute documents necessary for invoking 35 USC §103(c)(2) and post American Invents Act 35 USC §102(c).
|
11.8.
|
Management of Interactions.
The PARTIES will respectively identify one or more appropriate business and/or R&D employees to act as representatives on a leadership/steering team(s) to manage the interactions of the PARTIES under this JDA.
|
11.9.
|
No Other Rights Granted.
Unless expressly provided for in this JDA, neither PARTY will obtain rights (by assignment or license or otherwise) under patent rights (including PATENT RIGHTS), INFORMATION, or INVENTIONs, owned by or licensed to the other PARTY.
|
11.10.
|
No Third Party Beneficiaries.
Despite anything in this JDA to the contrary, nothing in this JDA, expressed or implied, is intended to confer on any PERSON other than the PARTIES or their respective permitted successors and assignees, any rights, remedies, obligations or liabilities under or by reason of this JDA.
|
11.11.
|
No Waiver.
No omission or delay by either PARTY at any time to enforce any right or remedy reserved to it, or to require performance of any of the obligations of this JDA by another PARTY at any time designated, will be a waiver of any such right or remedy to which such PARTY is entitled, nor will it in any way affect the right of such PARTY to enforce such provisions thereafter.
|
11.12.
|
Non-assignability.
This JDA will be binding upon and benefit the respective PARTIES and successors or assignees of all or substantially all of the relevant business assets of either PARTY, and will otherwise be nontransferable and non-assignable to THIRD PARTIES without the prior express written consent of the other PARTY.
|
11.13.
|
Notices.
All notices under this AGREEMENT will be sent to the respective PARTIES at the following addresses (or such other addresses as a PARTY designates to the other PARTY by written notice) by certified or registered mail, or sent by a nationally recognized overnight courier service; and will be deemed to have been given one day after being sent:
|
11.14.
|
Partial Invalidity.
If any obligation, condition or other provision of this JDA is held invalid, void or illegal by any court of competent jurisdiction, then the same will be deemed severable from the remainder of the subject agreement and will in no way affect, impair or invalidate any other obligation, condition or provision, and will be deemed replaced by a provision which comes closest to such unenforceable provision in language and intent, without being invalid, void or illegal.
|
11.15.
|
Press Release.
Neither PARTY will issue a press release regarding any aspect of this JDA, including any general statements as to the existence of a relationship between the PARTIES, without the prior written consent of the other PARTY, which consent shall not be unreasonably withheld, unless otherwise required by law, in which case, the issuing PARTY will provide the other PARTY reasonable prior written notice of such required disclosure.
|
11.16.
|
Relationship Between the PARTIES
. This AGREEMENT does not constitute making either PARTY the agent or legal representative of the other PARTY, for any purpose. Neither PARTY is granted any right or authority to assume or to create any obligation or responsibility, expressed or implied, on behalf of or in the name of the other PARTY or to bind the other PARTY in any manner or thing. Neither PARTY’s employees will represent themselves as being representatives of or otherwise employed by the other PARTY.
Nothing in this AGREEMENT will be construed as creating the relationship of employer and employee, joint venture, partnership, distributorship, franchise, agency or consignment between P&G and COLLABORATION PARTNER.
|
11.17.
|
Schedules & Exhibits.
Schedules and Exhibits to this JDA and conditions contained in the Schedules and Exhibits will have the same effect as if set out in the body of this JDA, subject to any express statement in the body of the JDA to the contrary. Despite anything to the contrary in the attached Schedules and Exhibits, if there is a conflict between a Schedule or Exhibit and the terms set forth in the body of this JDA, then the terms of the JDA will control.
|
11.18.
|
Severability.
If and to the extent that any court or tribunal of competent jurisdiction holds any of the terms or provisions of this JDA, or the application thereof to any circumstances, to be invalid or unenforceable in a final non-appealable order, the PARTIES will use reasonable efforts to reform the portions of this JDA declared invalid to realize the intent of the PARTIES as fully as practicable, and the remainder of this JDA and the application of the invalid term or provision to circumstances other than those as to which it is held invalid or unenforceable will not be affected thereby, and each of the remaining terms and provisions of this JDA will remain valid and enforceable to the fullest extent of the law.
|
For: CHROMADEX, INC. | For: The Procter & Gamble Company | |||
/s/Frank Jaksch
|
/s/
Dawn French
|
|||
Frank Jaksch
|
Dawn French
|
|||
CEO
|
V.P. R&D Beauty Care
|
|||
Date: October 30, 2015
|
Date: October 23, 2015 |
1.1.1.
|
“AAA”
is defined in Paragraph 8.1
.
|
1.1.2.
|
“AFFILIATE”
means, with respect to any PERSON as of the date on which, or at any time during the period for which, the determination of affiliation is being made, any other PERSON:
(a)
directly or indirectly controlling the party in question,
(b)
directly or indirectly being controlled by the party in question, or
(c)
being controlled by another PARTY that also controls the party in question. As used in the preceding sentence, “control”, “controlled,” and “control” as used with respect to any PARTY mean, through direct or indirect beneficial ownership of more than 50% of the voting or equity interest in another PARTY, the power to direct or cause the direction of the management and policies of such other PARTY
.
|
1.1.3.
|
“[*]”
means products and/or methods relating to [*] and/or [*] articles including [*], [*], [*], [*], [*]; and [*], including [*], [*], [*], and [*]
.
|
1.1.4.
|
“BACKGROUND IP”
means any intellectual property owned by a PARTY before the EFFECTIVE DATE or any intellectual property developed as a result of work that is independent from the PROJECT.
|
1.1.5.
|
“BUSINESS DAY”
means any day other than Saturday, Sunday, US federal holiday, or an Ohio holiday. Any other reference to day or days will include Saturday, Sunday, US federal holiday, or an Ohio holiday.
|
1.1.6.
|
“CLINICAL TRIAL”
means human in vivo testing of the PRODUCT with NR that has acceptable rheology, stability, active solubility, active bioavailability, and safety clearance, as determined by P&G.
|
1.1.7.
|
“COLLABORATION FIELD”
means identification and use of STABLE NR (e.g., hydrolytically stable) for [*], [*], [*], excluding pharmaceuticals, medical devices, and OVER-THE-COUNTER (OTC) drugs except for the following FDA therapeutic category subtopics: [*]; [*]; [*]; [*]; [*]; [*].
|
1.1.8.
|
“COLLABORATION PARTNER”
is defined in the Preamble.
|
1.1.9.
|
“COMPELLED DISCLOSURE”
is defined in Paragraph 3.3
.
|
1.1.10.
|
“DISCLOSER”
is defined in Paragraph 3.1
.
|
1.1.11.
|
“DISPUTE”
is defined in Paragraph 8.1
.
|
1.1.12.
|
“EFFECTIVE DATE”
is defined in the first paragraph.
|
1.1.13.
|
“[*]”
means products such as [*], [*], [*], [*], and/or [*], as well as methods and equipment for making such products.
|
1.1.14.
|
“[*]”
means products and/or methods relating to [*], [*], [*], [*], [*], [*], [*] and [*], and/or [*]
.
|
1.1.15.
|
“INFORMATION”
is defined in Paragraph 3.1
.
|
1.1.16.
|
“INVENTION”
means any creative idea, design, development, invention, know-how, or work result (whether or not patentable) developed as a direct result of the PROJECT.
|
1.1.17.
|
“JDA”
is defined in the Preamble
.
|
1.1.18.
|
“MFN PRICING”
For each calendar quarter, COLLABORATION PARTNER will not sell NR or STABLE NR to any THIRD PARTY for less than the price COLLABORATION PARTNER offers to P&G for the same calendar quarter
.
|
1.1.19.
|
“NR”
is defined in the Background.
|
1.1.20.
|
“OUTSIDE-THE-COLLABORATION-FIELD INVENTIONs”
means INVENTIONs that are
PRODUCTs outside the COLLABORATION FIELD employing NR, INVENTIONs that are methods of making such PRODUCTs, and INVENTIONs that are methods of using NR outside the subject COLLABORATION FIELD.
|
1.1.21.
|
“OVER-THE-COUNTER”
means products whose use does not require the supervision or authorization of a health care professional.
|
1.1.22.
|
“P&G”
is defined in the Preamble.
|
1.1.23.
|
“PARTY”
means either the COLLABORATION PARTNER or P&G, and
“PARTIES”
means the two collectively.
|
1.1.24.
|
“PATENT RIGHTS”
means foreign and domestic patent and/or design application(s), including continuations, continuations-in-part, divisionals, reissues, and reexaminations thereof, and patents/registrations issuing therefrom; that are filed as a direct result of work under this JDA and have one or more claims that encompass one or more INVENTIONs.
|
1.1.25.
|
"PERSON"
means (as the context requires) an individual, a corporation, a partnership, an association, a trust, a limited liability company, or other entity or organization, including a governmental entity.
|
1.1.26.
|
“PRODUCT”
means a material intended to be used or consumed in the form in which it is sold, and is not intended for subsequent commercial manufacture or modification. PRODUCT may take the form of a formula, device, or packaging.
|
1.1.27.
|
“PROJECT”
is defined in Paragraph 2.1
.
|
1.1.28.
|
“PROSECUTION”
means preparing, filing, prosecuting and/or maintaining a subject patent application(s) and/or patent(s).
|
1.1.29.
|
“RECEIVER”
is defined in Paragraph 3.1
.
|
1.1.30.
|
“REGION”
means North America, Latin America, Western Europe, Central and Eastern Europe, Northeast Asia, and Asian Southeast Economic Association, as those terms are specifically defined in a subject supply agreement.
|
1.1.31.
|
“RELEVANT”
in reference to INVENTIONs or PATENT RIGHTS, means those INVENTIONs and/or PATENT RIGHTS necessary to practice STABLE NR and/or PRODUCTs employing STABLE NR within the COLLABORATION FIELD.
|
1.1.32.
|
“[*]”
means [*] products for and/or methods relating to:
(a)
[*], including application of [*];
(b)
[*];
(c)
[*], including the [*], [*], [*], and/or [*], including the [*], [*], and [*], optionally in concert with a [*], including a [*], [*], or [*]; and
(d)
treating [*]
.
|
1.1.33.
|
“STABLE NR”
means NR capable of demonstrating the following properties after a 1 month stability test at 40
°
C within a PRODUCT: (
a
) no significant PRODUCT appearance change, including no separation or discoloration;
(b
) no off odor or change in odor of the PRODUCT (
c
) no PRODUCT pH change greater than ± 0.5; (
d
) no PRODUCT viscosity change greater than 20% (
e
) remaining NR concentration in PRODUCT greater than 80%, as determined quantitatively (e.g., liquid chromatography, nuclear magnetic resonance spectroscopy).
|
1.1.1.
|
“TERM”
is defined in Paragraph 7.1.
|
1.1.2.
|
“THIRD PARTY”
or
“THIRD PARTIES”
means any individual(s), corporation(s), association(s), government agencies, or other entity(ies) that is/are not a PARTY.
|
Milestone
|
Owner
(Who does the work)
|
Anticipated Time
|
Success Criteria
|
Measures
|
Milestone Payment*
|
|
#1. STABLE NR
|
COLLABORATION PARTNER supplies NR with a chemical structure that is stable and doesn’t hydrolyze which meets the requirements set out in Success Criteria.
P&G to do formulation & stability testing/ understanding
|
6 – 12 months
|
Approved safe levels of the TECHNOLOGY can be stably formulated into [*].
|
·
Achieve up to [*]. Specifically, [*] for the specification items below.
[*]
|
COLLABORATION PARTNER NEEDS to deliver [*] which meets the requirements set out in Success Criteria. If not, NO milestone payment.
If after 12 months #1 has not been met then at P&G’s option they can extend work on this phase for 6 additional months with a $[*] payment and no other amounts will be due for #1. At any time before 12 months if P&G starts any work under #3 this milestone will be due in full.
|
$[*]
|
#2. Safety for Human CLINICAL TRIAL
|
P&G conducted the safety assessment
COLLABORATION PARTNER generated and provided the safety data needed
|
Previously completed by P&G
|
·
Satisfactory safety assessment for human exposure tests (technical performance tests listed below) completed by P&G.
|
Issues addressed to P&G’s subjective satisfaction
|
P&G included this Milestone to be thorough; safety assessment for clinical testing anticipated to be already in place given scope of NR derivatives in this JDA.
|
[*]
|