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Subsequent Events
12 Months Ended
Dec. 29, 2012
Subsequent Events [Abstract]  
Note 16. Subsequent Events

On March 28, 2013, we entered into an asset purchase and sale agreement with NeutriSci International Inc. and consummated the sale of BluScience consumer product line to NeutriSci. The total sale transaction value is estimated at approximately $6.2 million and consists of following: (a) a $250,000 cash payment, which NeutriSci paid as a deposit in February 2013; (b) an additional $250,000 cash payment, which was paid at the closing of the sale; (c) an additional cash payment of $500,000 due no later than 60 days after the closing of the sale; (d) $2,500,000 senior convertible secured note (convertible into 625,000 shares Series I Preferred Stock as described below) payable in quarterly installments of $416,667 beginning August 15, 2013; and (e) 669,708 shares of Series I Preferred Shares that are convertible into 2,678,832 Class “A” common shares of NeutriSci, representing an aggregate of 19% of the NeutriSci shares at a deemed price for each Class A common share of $1.00 per share. The transaction documents contain certain equity blockers that preclude our ownership in NeutriSci in excess of 9.99% and 19% without obtaining a waiver from NeutriSci. We will continue to generate revenue though a royalty on 6% of future net sales of BluScience products as well as a supply agreement with NeutriSci for our patented pTeroPure pterostilbene. The outstanding principal balance of $2,500,000 senior secured note will be payable by NeutriSci in 6 installments of $416,667 on following dates : August 15, 2013, November 15, 2013, February 15, 2014, May 15, 2014, August 15, 2014 and November 15, 2014. In the event of default, the note can be convertible into Series I Preferred Shares of NeutriSci at the option of ChromaDex. Each Series I Preferred Share can be convertible into 4 Class A common shares of NeutriSci. The conversion price will be (a) $4.00 per Series I Preferred Share prior to the Public Offering; or (b) the closing price of Series I Preferred Share or four times the closing price of Class A common share on the Stock Exchange immediately prior to the conversion date.

On March 7, 2013, the Company entered into an Exclusive License Agreement (the "Agreement") with Washington University located in Saint Louis, Missouri ("WU"). Under the terms of the Agreement, WU granted to ChromaDex a worldwide, exclusive, sublicensable right and license to use certain patent rights relating to the use of the vitamin known as Nicotinamide Riboside (“NR”) in a specified field of use. NR is found naturally in trace amounts in milk and other foods and is a more potent version of Niacin (vitamin B3). In consideration of the license granted, the Company will pay to WU earned royalties on net sales of all licensed products (including sales by sublicensees and affiliates), as well as a percentage of attributed income from sublicensing agreements. The Company is subject to minimum annual maintenance or royalty payments to WU of $25,000 during the term of the Agreement. The Company has agreed upon a commercialization plan to develop, commercialize and market licensed products under that Agreement and will make certain payments to WU in connection with the achievement of certain milestone events relating to product development and regulatory approvals in accordance with the terms of the Agreement.

 

From December 30, 2012 through March 28, 2013, 3,414,283 of the warrants with an exercise price of $0.21 per share have been exercised and the Company received proceeds of $716,999 from the exercise of the warrants. These warrants were issued during the year ended January 1, 2011, pursuant to the Subscription Agreement entered into by the Company on April 22, 2010.

 

From December 30, 2012 through March 28, 2013, 13,538 of the stock options with an exercise price of $0.50 per share have been exercised and the Company received proceeds of $6,769.

 

From December 30, 2012 through March 28, 2013, the Company awarded 440,000 shares of common stock to consultants for certain investor relations services provided.