0001654954-17-008154.txt : 20170906 0001654954-17-008154.hdr.sgml : 20170906 20170906063044 ACCESSION NUMBER: 0001654954-17-008154 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20170905 ITEM INFORMATION: Completion of Acquisition or Disposition of Assets ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20170906 DATE AS OF CHANGE: 20170906 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ChromaDex Corp. CENTRAL INDEX KEY: 0001386570 STANDARD INDUSTRIAL CLASSIFICATION: MEDICINAL CHEMICALS & BOTANICAL PRODUCTS [2833] IRS NUMBER: 262940963 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-37752 FILM NUMBER: 171070174 BUSINESS ADDRESS: STREET 1: 10005 MUIRLANDS BLVD. STREET 2: STE. G, FIRST FLOOR CITY: IRVINE STATE: CA ZIP: 92618 BUSINESS PHONE: 949-419-0288 MAIL ADDRESS: STREET 1: 10005 MUIRLANDS BLVD. STREET 2: STE. G, FIRST FLOOR CITY: IRVINE STATE: CA ZIP: 92618 FORMER COMPANY: FORMER CONFORMED NAME: CODY RESOURCES, INC. DATE OF NAME CHANGE: 20070112 8-K 1 cdxc8k_sept52017.htm CURRENT REPORT SEC Connect
 

 
UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 
WASHINGTON, D.C. 20549
____________
 
FORM 8-K
 
CURRENT REPORT
 
     PURSUANT TO SECTION 13 OR 15(d) OF THE
 
SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported): September 5, 2017
 
CHROMADEX CORPORATION
 (Exact name of registrant as specified in its charter)
 
Delaware
001-37752
26-2940963
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
 
10005 Muirlands Boulevard, Suite G, Irvine, California, 92618
(Address of principal executive offices, including zip code)
 
(949) 419-0288
 (Registrant's telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
 
[  ]Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
[  ]Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
[  ]Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
[  ]Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
 
 
 
 
Item 2.01 Completion of Acquisition or Disposition of Assets.
 
As previously announced, on August 21, 2017, ChromaDex Corporation (“ChromaDex”), ChromaDex, Inc., a wholly-owned subsidiary of ChromaDex, and ChromaDex Analytics, Inc., a wholly-owned subsidiary of ChromaDex, Inc. (collectively, the “Company”), entered into an asset purchase agreement with Covance Laboratories Inc. (“Covance”) pursuant to which the Company was to sell to Covance operating assets that are used or held for use in connection with the Company’s quality verification program testing or seals and analytical chemistry and microbiology testing business for food and food related products (the “Lab Business Disposition”). On September 5, 2017, the Company completed the Lab Business Disposition.
 
Upon closing of the Lab Business Disposition, Covance paid the Company an amount equal to $7.5 million, subject to certain escrow provisions. Further, under the asset purchase agreement, the Company is eligible to receive an additional earnout payment from Covance in an amount equal to up to $1.0 million, subject to certain escrow provisions.
 
Item 9.01 Financial Statements and Exhibits.
 
(b) Pro forma financial information.
 
The unaudited pro forma condensed consolidated statements of operations of the Company for the years ended December 31, 2016, January 2, 2016 and January 3, 2015 and the six months ended July 1, 2017 and the unaudited pro forma condensed consolidated balance sheet as of July 1, 2017, which give effect to Lab Business Disposition, are attached hereto as Exhibit 99.1 and are incorporated herein by reference.
 
(d) Exhibits.
 
Exhibit Number
 
Description
 
 
 
Unaudited pro forma condensed consolidated financial information.
 
Forward-Looking Statements
 
This Current Report contains forward-looking statements, including statements regarding a potential earnout payment and pro forma financial information. These forward-looking statements are based on management’s expectations and assumptions as of the date of this Current Report, and actual results may differ materially from those in these forward-looking statements as a result of various factors. These factors include, but are not limited to, risks regarding the occurrence of the requirements for the earnout payment and pro forma financial information not being indicative of the Company’s financial position. For a further description of these and other risks facing the Company, please see the risk factors described in ChromaDex’s filings with the Securities and Exchange Commission, including those factors discussed under the caption “Risk Factors” in those filings. Forward-looking statements speak only as of the date of this Current Report and the Company undertakes no obligation to update or revise these statements, except as may be required by law.
 
 
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
 
 
 
 
 
CHROMADEX CORPORATION
 
 
 
Dated: September 6, 2017
 
 
 
 
 
 
 
 
 
 
 
 
By:
 
/s/ Thomas C. Varvaro
 
 
 
 
 
 
Name: Thomas C. Varvaro
 
 
 
 
 
 
Chief Financial Officer
 
 
 
 
 
 
 
 
 
 
 EX-99.1 2 ex99-1.htm UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION. SEC Connect
 
Exhibit 99.1

Sale of Operating Assets
 
On September 5, 2017, ChromaDex Corporation (“ChromaDex”), ChromaDex, Inc., a wholly-owned subsidiary of ChromaDex, and ChromaDex Analytics, Inc., a wholly-owned subsidiary of ChromaDex, Inc. (collectively, the “Company”), sold operating assets that are used or held for use in connection with the Company’s quality verification program testing or seals and analytical chemistry and microbiology testing business for food and food related products (the “Lab Business”) to Covance Laboratories Inc. (“Covance”) pursuant to an asset purchase agreement. Pursuant to the terms of the asset purchase agreement, the Company will receive total consideration equal to $7.5 million, subject to certain escrow provisions. In addition, the Company is eligible to receive an additional earnout payment from Covance up to $1.0 million, subject to certain escrow provisions.
 
Pro Forma Information
 
The accompanying unaudited pro forma condensed consolidated statements of operations of the Company for the years ended December 31, 2016, January 2, 2016 and January 3, 2015 and the six months ended July 1, 2017 are presented as if the Lab Business sale had occurred on December 29, 2013, the beginning of the earliest period presented. The accompanying unaudited pro forma condensed consolidated balance sheet of the Company as of July 1, 2017 is presented as if the Lab Business sale had occurred on July 1, 2017. The pro forma adjustments related to the Lab Business sale do not reflect the final purchase price or final asset and liability balances of the Lab Business. Accordingly, the pro forma adjustments are preliminary and have been made solely for the purpose of providing unaudited pro forma condensed consolidated financial information. The unaudited pro forma financial information is not necessarily indicative of the results of operations or financial position that might have been achieved for the dates or periods indicated, nor is it necessarily indicative of the results of operations or financial position that may occur in the future.
 
The historical consolidated financial information has been adjusted in the unaudited pro forma financial information to give effect to pro forma events that are (1) directly attributable to the disposal, (2) factually supportable, and (3) with respect to the statements of operations, expected to have a continuing impact on the combined results.
 
The following is a brief description of the amounts recorded under each of the column headings in the unaudited pro forma consolidated statements of operations and balance sheet:
 
Historical
 
This column reflects the Company’s historical audited operating results for the years ended December 31, 2016, January 2, 2016 and January 3, 2015 and the historical and unaudited operating results of continuing operations and financial condition as of and for the six months ended July 1, 2017 prior to any adjustment for the Lab Business sale described above.
 
Disposal
 
This column reflects the elimination of the historical operating results of the Lab Business for the years ended December 31, 2016, January 2, 2016 and January 3, 2015 and the six months ended July 1, 2017 at the amounts that have been reflected in the Company’s condensed consolidated statements of operations for those periods. These amounts are based on the best available information and certain assumptions that the Company's management believe are reasonable. These amounts do not include allocations of corporate overhead expenses included in general and administrative expenses. The disposal column on the unaudited pro forma condensed consolidated balance sheet as of July 1, 2017 reflects the value of operating assets and liabilities included in the sale of the Lab Business as of that date. Net operating obligations of approximately $0.5 million as of July 1, 2017 were not assumed by Covance in its purchase of the Lab Business and these obligations are expected to be paid or collected by the Company within a year.
 
Pro Forma Adjustments
 
This column on the unaudited pro forma condensed consolidated balance sheet reflects the pro forma effect of the receipt and use of the cash consideration from the Lab Business sale.
 
 
 
 
 
 
ChromaDex Corporation and Subsidiaries
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 
 
 
Unaudited Pro Forma Condensed Consolidated Balance Sheet
 
 
 
 
 
 
 
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of July 1, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Historical
 
 
Disposal
 
 
Pro Forma
Adjustments
 
Notes
 
Pro Forma
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash
 $14,139 
 
 
 
 $6,550 
(A)
 $20,689 
Trade receivables, net of allowances
  4,579 
 
 
 
    
 
  4,579 
Inventories
  7,794 
 
 
 
    
 
  7,794 
Prepaid expenses and other assets
  865 
  (19)
    
 
  846 
Total current assets
  27,377 
  (19)
  6,550 
 
  33,908 
 
    
    
    
 
    
Leasehold Improvements and Equipment, net
  3,373 
  (1,473)
    
(B)
  1,900 
Deposits
  402 
  (20)
    
 
  382 
Intangible assets, net
  1,768 
    
    
 
  1,768 
Other receivables
  - 
    
  950 
(A)
  950 
 
    
    
    
 
    
Total assets
 $32,920 
 $(1,512)
 $7,500 
 
 $38,908 
 
    
    
    
 
    
Liabilities and Stockholders' Equity
    
    
    
 
    
 
    
    
    
 
    
Current Liabilities
    
    
    
 
    
Accounts payable
 $3,132 
    
 $700 
(C)
 $3,832 
Accrued expenses
  2,111 
    
    
 
  2,111 
Current maturities of capital lease obligations
  299 
    
    
 
  299 
Customer deposits and other
  504 
    
    
 
  504 
Deferred rent, current
  114 
  (33)
    
 
  81 
Due to officer
  100 
    
    
 
  100 
Total current liabilities
  6,260 
  (33)
  700 
 
  6,927 
 
    
    
    
 
    
Capital lease obligations, less current maturities
  393 
    
    
 
  393 
Deferred rent, less current
  548 
  (184)
    
 
  364 
 
    
    
    
 
    
Total liabilities
  7,201 
  (217)
  700 
 
  7,684 
 
    
    
    
 
    
Commitments and contingencies
    
    
    
 
    
 
    
    
    
 
    
Stockholders' Equity
    
    
    
 
    
Common stock, $.001 par value
  45 
    
    
 
  45 
Additional paid-in capital
  75,590 
    
    
 
  75,590 
Accumulated deficit
  (49,916)
    
  5,505 
(C)
  (44,411)
Total stockholders' equity
  25,719 
  - 
  5,505 
 
  31,224 
Total liabilities and stockholders' equity
 $32,920 
 $(217)
 $6,205 
 
 $38,908 
 
 
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
 
 
 
 
 
 
 
ChromaDex Corporation and Subsidiaries
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unaudited Pro Forma Condensed Consolidated Statements of Operations
 
 
 
 
 
 
(in thousands, except for per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Six Month Period Ended July 1, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Historical
 
 
Disposal
 
 
Pro Forma Adjustments
 
 
Pro Forma
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales, net
 $9,756 
 $(2,170)
 
 
 
 $7,586 
Cost of sales
  5,741 
  (1,882)
 
 
 
  3,859 
 
    
    
 
 
 
    
Gross profit
  4,015 
  (288)
  - 
  3,727 
 
    
    
    
    
Operating expenses:
    
    
    
    
Sales and marketing
  1,324 
  (369)
    
  955 
Research and development
  1,514 
  - 
    
  1,514 
General and administrative
  5,041 
  (106)
    
  4,935 
Other
  746 
  - 
    
  746 
Operating expenses
  8,625 
  (475)
  - 
  8,150 
 
    
    
    
    
Operating loss
  (4,610)
  187 
  - 
  (4,423)
 
    
    
    
    
Nonoperating expense:
    
    
    
    
Interest expense, net
  (83)
  19 
    
  (64)
Nonoperating expenses
  (83)
  19 
  - 
  (64)
 
    
    
    
    
Net loss
 $(4,693)
 $206 
 $- 
 $(4,487)
 
    
    
    
    
Basic and diluted loss per common share
 $(0.12)
 $0.01 
 $- 
 $(0.11)
 
    
    
    
    
Basic weighted average common shares outstanding
  40,076 
  40,076 
  40,076 
  40,076 
 
 
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
 
 
 
 
 
 
ChromaDex Corporation and Subsidiaries
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unaudited Pro Forma Condensed Consolidated Statements of Operations
 
 
 
 
 
 
(in thousands, except for per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Year Ended December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Historical
 
 
Disposal
 
 
Pro Forma Adjustments
 
 
Pro Forma
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales, net
 $26,811 
 $(5,146)
 
 
 
 $21,665 
Cost of sales
  14,890 
  (3,616)
 
 
 
  11,274 
 
    
    
 
 
 
    
Gross profit
  11,921 
  (1,530)
  - 
  10,391 
 
    
    
    
    
Operating expenses:
    
    
    
    
Sales and marketing
  2,250 
  (692)
    
  1,558 
Research and development
  2,523 
  - 
    
  2,523 
General and administrative
  9,393 
  (179)
    
  9,214 
Operating expenses
  14,166 
  (871)
  - 
  13,295 
 
    
    
    
    
Operating income (loss)
  (2,245)
  (659)
  - 
  (2,904)
 
    
    
    
    
Nonoperating expense:
    
    
    
    
Interest expense, net
  (370)
  36 
    
  (334)
Loss on debt extinguishment
  (313)
  - 
    
  (313)
Nonoperating expenses
  (683)
  36 
  - 
  (647)
 
    
    
    
    
Net income (loss)
 $(2,928)
 $(623)
 $- 
 $(3,551)
 
    
    
    
    
Basic and diluted loss per common share
 $(0.08)
 $(0.02)
 $- 
 $(0.10)
 
    
    
    
    
Basic weighted average common shares outstanding
  37,294 
  37,294 
  37,294 
  37,294 
 
 
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
 
 
 
 
 
 
ChromaDex Corporation and Subsidiaries
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unaudited Pro Forma Condensed Consolidated Statements of Operations
 
 
 
 
 
 
(in thousands, except for per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Year Ended January 2, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Historical
 
 
Disposal
 
 
Pro Forma Adjustments
 
 
Pro Forma
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales, net
 $22,014 
 $(4,129)
 
 
 
 $17,885 
Cost of sales
  13,533 
  (3,183)
 
 
 
  10,350 
 
    
    
 
 
 
    
Gross profit
  8,481 
  (946)
  - 
  7,535 
 
    
    
    
    
Operating expenses:
    
    
    
    
Sales and marketing
  2,327 
  (819)
    
  1,508 
Research and development
  892 
  - 
    
  892 
General and administrative
  7,416 
  (215)
    
  7,201 
Operating expenses
  10,635 
  (1,034)
  - 
  9,601 
 
    
    
    
    
Operating loss
  (2,154)
  88 
  - 
  (2,066)
 
    
    
    
    
Nonoperating expense:
    
    
    
    
Interest expense, net
  (613)
  46 
    
  (567)
Nonoperating expenses
  (613)
  46 
  - 
  (567)
 
    
    
    
    
Loss before income taxes
  (2,767)
  134 
  - 
  (2,633)
Provision for income taxes
  (4)
  - 
  - 
  (4)
 
    
    
    
    
Net loss
 $(2,771)
 $134 
 $- 
 $(2,637)
 
    
    
    
    
Basic and diluted loss per common share
 $(0.08)
 $0.00 
 $- 
 $(0.07)
 
    
    
    
    
Basic weighted average common shares outstanding
  35,877 
  35,877 
  35,877 
  35,877 
 
 
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
 
 
 
 
 
 
ChromaDex Corporation and Subsidiaries
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unaudited Pro Forma Condensed Consolidated Statements of Operations
 
 
 
 
 
 
(in thousands, except for per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Year Ended January 3, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Historical
 
 
Disposal
 
 
Pro Forma Adjustments
 
 
Pro Forma
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sales, net
 $15,313 
 $(3,452)
 
 
 
 $11,861 
Cost of sales
  9,987 
  (3,132)
 
 
 
  6,855 
 
    
    
 
 
 
    
Gross profit
  5,326 
  (320)
  - 
  5,006 
 
    
    
    
    
Operating expenses:
    
    
    
    
Sales and marketing
  2,136 
  (654)
    
  1,482 
Research and development
  514 
  - 
    
  514 
General and administrative
  7,861 
  (212)
    
  7,649 
Loss from investment in affiliate
  46 
  - 
    
  46 
Operating expenses
  10,557 
  (866)
  - 
  9,691 
 
    
    
    
    
Operating loss
  (5,231)
  546 
  - 
  (4,685)
 
    
    
    
    
Nonoperating expense:
    
    
    
    
Interest expense, net
  (157)
  33 
    
  (124)
Nonoperating expenses
  (157)
  33 
  - 
  (124)
 
    
    
    
    
Net loss
 $(5,388)
 $579 
 $- 
 $(4,809)
 
    
    
    
    
Basic and diluted loss per common share
 $(0.15)
 $0.02 
 $- 
 $(0.14)
 
    
    
    
    
Basic weighted average common shares outstanding
  35,486 
  35,486 
  35,486 
  35,486 
 
 
See Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements.
 
 
 
 
 
 
ChromaDex Corporation and Subsidiaries
 
Notes to Unaudited Pro Forma Consolidated Financial Information
 
(A) Total consideration for the Lab Business sale is as follows (in thousands):
 
Cash payment upon closing of sale
 $6,550 
Other cash payment to be held in escrow to satisfy any indemnification claims
  950 
Additional earnout payment up to $1.0 million *
  - 
Total consideration
 $7,500 
 
* Additional earnout payment is considered as gain contingency and is not recognized until received.
 
(B) Leasehold improvements and equipment included in the sale of the Lab Business consisted of following:
 
Leasehold improvements and equipment
 $3,477 
Less accumulated depreciation
  (2,004)
Leasehold improvements and equipment, net
 $1,473 
 
(C) The gain from disposal of the Lab Business is as follows (in thousands):
 
Total consideration
 $7,500 
Net assets sold
  (1,295)
Estimated transaction costs, legal and other
  (700)
Gain from disposal
 $5,505