CHROMADEX CORPORATION (NASDAQ:CDXC) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01

Entry into a Material Definitive Agreement.

On December 19, 2018, ChromaDex, Inc. (the “Company”) and Nestec Ltd. (“Nestec”) entered into a supply agreement (the “Supply Agreement”), to which Nestec will exclusively purchase nicotinamide riboside marketed under the brand name Tru Niagen (“NR”) from the Company, and Nestec will be entitled to develop, manufacture, sell, promote, import and distribute products using NR for human use in the (i) medical nutritional and (ii) functional food and beverage categories (the “Approved Products”) in certain territories, including North America, Europe, Latin America, Australia, New Zealand and Japan (the “Territory”), subject to certain territory reversion provisions. Subject to certain conditions and reversion rights, during the term of the Supply Agreement, the Company will not sell NR to any third party or itself use NR in any medical nutritional products for human use in the Territory. Subject to certain conditions and reversion rights, the Company will not sell NR to any third party for use in the manufacture of third party functional food and beverage products that consist of protein based ready to drink or loose powder beverages sold under a third party brand in the Territory. The Company reserved rights for co-exclusive sales of functional food and beverages consisting of protein based ready to drink or loose powder beverages. Approved Products do not include, among other things, supplements or sports nutrition products.

As consideration for the rights granted to Nestec under the Supply Agreement, Nestec agreed to pay to the Company an upfront fee of $4,000,000. Following the launch of the first Approved Product in each sub-Territory for each of the (i) medical nutrition and (ii) functional food and beverages categories (each, a “Product Category”), Nestec will pay the Company a one-time fee for a potential total aggregate payment of $6,000,000. The Supply Agreement additionally provides that Nestec is obligated to pay to the Company sales fees at tiered percentage rates ranging from the low-single digit to high-single digit percent of worldwide annual net sales of the Approved Products, subject to a minimum annual royalty for each Product Category applied against actual sales fees due starting 24 months after Nestec has launched an Approved Product in the relevant Product Category. No sales fees will be due after the expiration or abandonment of all of the Company’s applicable issued patents and applicable filed patent applications for NR.

The Supply Agreement may be terminated by (i) a party for cause if the other party commits a material breach of the Supply Agreement and does not cure such breach within 30 days following such party’s receipt of written notice; (ii) a party immediately upon the giving of written notice if the other party files a petition for bankruptcy, is adjudicated bankrupt, takes advantage of the insolvency laws of any state, territory or country, or has a receiver, trustee, or other court officer appointed for its property; or (iii) a party if a force majeure event with respect to the other party shall have continued for 90 days or is reasonably expected to continue for more than 180 days. Additionally, (a) Nestec may terminate the Supply Agreement if Nestec’s technical feasibility in desired food forms is not achieved by June 30, 2019 by providing the Company 60 days written notice; (b) after the first anniversary of the Supply Agreement until the 24th month after the launch of the first Approved Product in each Product Category, Nestec may terminate the Supply Agreement as to one or both Product Categories upon the payment of a $500,000 termination fee (the “Termination Fee”) for each terminated Product Category; and (c) after the 25th month of the launch of the first Approved Product, Nestec may terminate the Supply Agreement with 12 months written notice, with no Termination Fee due. Upon the termination of the Supply Agreement, Nestec may complete and sell any work-in-progress and inventory of Approved Products within six months after the effective date of the termination (unless such termination is based on cause or a breach by Nestec of the Company’s intellectual property rights or Nestec’s confidentiality rights therein), following which Nestec will have no further right to use NR or sell the Approved Products.

The foregoing is only a summary of the material terms of the Supply Agreement, and does not purport to be complete and is qualified in its entirety by reference to the full text of the Supply Agreement, which will be filed, with confidential terms redacted, with the Securities and Exchange Commission as an exhibit to ChromaDex Corporation’s Annual Report on Form 10-K for the year ending December 31, 2018.

On December 20, 2018, the Company issued a press release announcing the Supply Agreement. A copy of this press release is attached hereto as Exhibit 99.1.

(d)Exhibits.

ChromaDex Corp. Exhibit
EX-99.1 2 ex99-1.htm PRESS RELEASE Exhibit 99.1   Exhibit 99.1   ChromaDex Corp. and Nestlé Health Science Enter Global Commercial License and Supply Agreement for TRU NIAGEN®   ChromaDex Corporation and Nestlé Health Science agreement includes global commercial license and supply agreement for ingredient sales of TRU NIAGEN® for certain products within the medical nutrition and consumer health categories.   LOS ANGELES,…
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About CHROMADEX CORPORATION (NASDAQ:CDXC)

Chromadex Corporation and its subsidiaries ChromaDex, Inc., ChromaDex Analytics, Inc. and Spherix Consulting, Inc. provide research and quality-control products and services to the natural products industry. The Company allows its business units to discover, acquire, develop and commercialize ingredient technologies that address the dietary supplement, food, beverage, skin care and pharmaceutical markets. The Company operates through three segments: Ingredients, which develops, supplies and commercializes ingredient technologies; Core standards and contract services, which supplies phytochemical reference standards, which are small quantities of plant-based compounds used to research an array of attributes, reference materials and related contract services, and Scientific and regulatory consulting, which provides scientific and regulatory consulting to the clients in the food, supplement and pharmaceutical industries to manage health and regulatory risks.