ChromaDex Reports 2012 Full-Year Results and Closes Strategic Sale of Its BluScience Consumer Product Line

01 Apr 2013 --- ChromaDex Corporation, an innovative natural products company that provides proprietary, science-based solutions and ingredients to the dietary supplement, food & beverage, animal health, cosmetic and pharmaceutical industries, announced both the financial results for the year ended December 29, 2012 as well as the closing of the sale of its BluScience consumer product line to NeutriSci International Inc.

The sale of the BluScience line will allow ChromaDex to focus on growing sales in its ingredient business, as well as accelerate the development of its novel ingredients pipeline.

On March 28, 2013, ChromaDex closed on the previously announced planned strategic sale of the ongoing business and assets of its BluScience consumer product line of dietary supplements to NeutriSci. The total sale transaction value was approximately $6.2 million, which consisted of $250,000 cash upon execution of the LOI; $250,000 cash paid at closing; a $500,000 cash payment due on or before 60 days after closing; a $2.5 million senior secured note payable in six equal quarterly cash payments of $416,667 each, commencing on August 15, 2013; and 669,708 shares of Series I Preferred Shares that are convertible into 2,678,832 Class "A" Common Shares in the capital of NeutriSci, representing an aggregate of 19 percent of the NSI Shares. The transaction documents contain certain equity blockers which preclude ChromaDex from exceeding 9.99 percent and 19 percent ownership levels without obtaining certain waivers from NeutriSci. ChromaDex will continue to generate revenue related to BluScience through both a 6 percent royalty on future net sales of BluScience products as well as a supply agreement with NeutriSci for its patented pTeroPure pterostilbene, which will continue to be the key active ingredient in the BluScience product line. ChromaDex retained all rights and ownership to its pTeroPure pterostilbene.

2012 Company highlights include:

- In February, the Company closed an offering of common shares at a price per share of $0.75, resulting in gross proceeds of $11.75 million to the Company.
- In February, the Company entered into a strategic alliance pursuant to which ChromaDex licensed to OPKO Health, Inc. all of its new product offerings and health care technologies for distribution and business development throughout all of Latin America. OPKO also made a $1,000,000 investment in ChromaDex as a participant in the February offering.
- In April, the Company announced the first patent issued for pterostilbene which is licensed exclusively to ChromaDex and includes three key claims which encompass both the nutraceutical market and the pharmaceuticals market.
- In July, the Company announced a distribution agreement for pTeroPure with Glanbia Nutritionals (NA), Inc., a global ingredient and micronutrient premix company, whereby Glanbia will serve as the exclusive distributor of pTeroPure in North America to the food, beverage and dietary supplement industries.
- In July, the Company licensed from Dartmouth College exclusive rights to several patents related to the recently discovered vitamin found in milk, nicotinamide riboside. The licensed intellectual property includes protection for human uses of NR as well as methods to produce NR. This license, coupled with IP rights for NR acquired from Cornell University and Washington University, helps position ChromaDex as a leader in the commercialization of this novel "no flush" version of niacin.
- In September, the Company's first human clinical study of pTeroPure pterostilbene was highlighted at the American Heart Association's High Blood Pressure Research 2012 Scientific Sessions by investigators from the University of Mississippi Medical Center. The Phase 2/3 clinical trial of pTeroPure showed statistically significant results for lowering blood pressure in adults.
- In December, the Company acquired Spherix Consulting, Inc., a leader in scientific and regulatory consulting services which has a well-established list of Fortune 1000 customers.

For the year ended December 29, 2012, ChromaDex reported revenue of $11,610,494, an increase of 43 percent as compared to $8,112,610 for the year ended December 31, 2011. The increase in revenue was largely due to an increase in sales of the Company's BluScience line of dietary supplements. The net loss attributable to common stock holders for FY 2012, which included an operating loss of $3,443,791 in the BluScience business segment, was $11,662,426 or ($0.13) per share as compared to a net loss of $7,894,984 or ($0.12) per share for FY 2011. The non-cash, stock-based compensation expense related to stock options and other stock-based compensation in FY 2012 was $2,703,253. Excluding non-cash, share-based compensation expense, which is a "non-GAAP measure," would have the effect of decreasing the Company's net loss for the year ended December 29, 2012 to $8,959,173. As of December 29, 2012, cash, cash equivalents and marketable securities totaled approximately $520,000.

Frank Jaksch, Jr., CEO and co-founder of ChromaDex, commented, "The sale of our BluScience line will allow us to focus our management and capital resources on our ingredient business as well as eliminate expenses associated with managing BluScience. NeutriSci has strong consumer product marketing expertise and the ability to take the BluScience brand to the next level. The structure of the BluScience sale provides ChromaDex with additional cash as well as meaningful participation in the future of BluScience."

Mr. Jaksch continued, "Throughout 2012, we continued to execute on our business strategy of identifying novel ingredient technologies, securing intellectual property rights, developing commercially viable production processes, validating with clinical proof and most importantly, executing on a commercialization and licensing strategy. Our first human clinical study for pTeroPure pterostilbene showed statistically significant results for lowering blood pressure. Moreover, we were able to acquire what we believe is the most relevant and valuable IP pertaining to the commercialization of nicotinamide riboside, an ingredient that may prove to be one of the best opportunities yet for ChromaDex to create shareholder value."