CHROMADEX CORP.
10-Ks and 10-Qs
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UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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SCHEDULE 14A
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Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
(Amendment
No.
)
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Filed
by the Registrant
[X]
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Filed
by a Party other than the Registrant
[ ]
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Check
the appropriate box:
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[
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Preliminary
Proxy Statement
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[
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Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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[X]
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Definitive
Proxy Statement
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[
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Definitive
Additional Materials
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[
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Soliciting
Material under
§
240.14a-12
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CHROMADEX
CORPORATION
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(Name
of Registrant as Specified In Its Charter)
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(Name
of Person(s) Filing Proxy Statement, if other than the
Registrant)
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Payment
of Filing Fee (Check the appropriate box):
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[X]
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No fee
required.
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[
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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Per
unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was
determined):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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Total
fee paid:
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[
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Fee
paid previously with preliminary materials.
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[
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Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date
of its filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement No.:
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(3)
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Filing
Party:
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(4)
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Date
Filed:
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ChromaDex Corporation
10005 Muirlands Blvd, Suite G
Irvine, CA 92618
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 10, 2017
June 20
, 2017
To the
stockholders of ChromaDex Corporation:
You are
cordially invited to attend the Special Meeting of Stockholders
(the
“
Special
Meeting
”
) of ChromaDex
Corporation, a Delaware corporation (the
“
Company
”
). The meeting will be held on
August 10
, 2017, at 11:00 am
local time, at the Company
’
s offices located at 10005 Muirlands
Blvd, Suite G, Irvine, CA 92618 for the following purposes, as more
fully described in the accompanying proxy statement (the
“
Proxy
Statement
”
):
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(1)
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To
approve the issuance of Common Stock in connection with a financing
transaction; and
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(2)
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To
transact other business that may properly come before the meeting
and any postponement(s) or adjournment(s) thereof.
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Pursuant
to the bylaws of the Company, the Board of Directors has fixed the
close of business on
June
19
, 2017 as the record date (the
“
Record Date
”
) for determination of stockholders
entitled to notice and to vote at the Special Meeting and any
adjournment thereof. Holders of the Company
’
s Common Stock are entitled to vote
at the Special Meeting.
In
accordance with rules
and
regulations adopted by the U.S. Securities and Exchange Commission
(the
“
SEC
”
), we have elected to provide our
beneficial owners and stockholders of record access to our proxy
materials over the Internet. Beneficial owners are stockholders
whose shares are held in the name of a broker, bank or other agent
(i.e., in
“
street
name
”
). Accordingly, a
Notice of Internet Availability of Proxy Materials (the
“
Notice
”
) will be mailed on or about
June 23,
2017 to our beneficial
owners and stockholders of record who owned our Common Stock at the
close of business on
June
19
, 2017. Beneficial owners and stockholders of record will
have the ability to access the proxy materials on a website
referred to in the Notice or request a printed set of the proxy
materials be sent to them by following the instructions in the
Notice. Beneficial owners and stockholders of record who have
previously requested to receive paper copies of our proxy materials
will receive paper copies of the proxy materials instead of a
Notice.
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BY
ORDER OF THE BOARD OF DIRECTORS
/s/
Stephen Allen
Chairman
of the Board
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You are cordially invited to attend the meeting in person. Whether
or not you expect to attend the meeting, please complete, date,
sign and return the proxy mailed to you, or vote over the telephone
or the internet as instructed in these materials, as promptly as
possible in order to ensure your representation at the meeting. A
return envelope (which is postage prepaid if mailed in the United
States) has been provided for your convenience. Even if you have
voted by proxy, you may still vote in person if you attend the
meeting. Please note, however, that if your shares are held of
record by a broker, bank or other nominee and you wish to vote at
the meeting, you must obtain a proxy issued in your name from that
record holder.
ChromaDex Corporation
10005 Muirlands Blvd, Suite G
Irvine, CA 92618
PROXY STATEMENT
FOR
THE SPECIAL MEETING OF STOCKHOLDERS
AUGUST 10, 2017
The
enclosed proxy is solicited by the board of directors (
“
Board of Directors
”
) of ChromaDex Corporation (the
“
Company
”
or
“
ChromaDex
”
), in connection with the Special
Meeting of Stockholders (the
“
Special Meeting
”
) of the Company, to be held on
August 10
, 2017, at 11:00 am
local time, at 10005 Muirlands Blvd, Suite G, Irvine, CA
92618.
At the
Special Meeting, you will be asked to consider and vote upon the
following matters:
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(1)
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To
approve the issuance of Common Stock in connection with a financing
transaction; and
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(2)
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To
transact other business that may properly come before the meeting
and any postponement(s) or adjournment(s) thereof.
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The
Board of Directors has fixed the close of business on
June 19
, 2017 as the record date (the
“
Record Date
”
) for determining stockholders
entitled to notice of and to vote at the Special Meeting and any
adjournment thereof.
In
accordance with rules
and
regulations adopted by the U.S. Securities and Exchange Commission
(the
“
SEC
”
), we have elected to provide our
beneficial owners and stockholders of record access to our proxy
materials over the Internet. Beneficial owners are stockholders
whose shares are held in the name of a broker, bank or other agent
(i.e., in
“
street
name
”
). Accordingly, a
Notice of Internet Availability of Proxy Materials (the
“
Notice
”
) will be mailed on or
about
June 23
, 2017 to our
beneficial owners and stockholders of record who owned our Common
Stock at the close of business on
June 19
, 2017. Beneficial owners and
stockholders of record will have the ability to access the proxy
materials on a website referred to in the Notice or request a
printed set of the proxy materials be sent to them by following the
instructions in the Notice. Beneficial owners and stockholders of
record who have previously requested to receive paper copies of our
proxy materials will receive paper copies of the proxy materials
instead of a Notice.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR
THE SPECIAL MEETING TO BE HELD ON AUGUST 10, 2017: THE NOTICE,
PROXY STATEMENT AND PROXY CARD ARE AVAILABLE AT
WWW.CHROMADEX.COM
,
INVESTOR RELATIONS SECTION.
QUESTIONS AND ANSWERS ABOUT THIS PROXY MATERIAL AND
VOTING
Why did I receive in the mail a Notice of Internet Availability of
Proxy Materials instead of a full set of Proxy
Materials?
We are
pleased to take advantage of the SEC rule
that allows companies to furnish
their proxy materials over the Internet. Accordingly, we have sent
to our beneficial owners and stockholders of record a Notice of
Internet Availability of Proxy Materials. Instructions on how to
access the proxy materials over the Internet or to request a paper
copy may be found in the Notice. Our stockholders may request to
receive proxy materials in printed form by mail or electronically
on an ongoing basis. A stockholder
’
s election to receive proxy
materials by mail or electronically by email will remain in effect
until the stockholder terminates its election.
We
intend to mail the Notice on or about June 23, 2017 to all
stockholders of record entitled to vote at the Special
Meeting.
How do I attend the Special Meeting?
The
meeting will be held on
August
10
, 2017 at 11:00 am local time at the Company
’
s offices located at 10005 Muirlands
Blvd, Suite G, Irvine, CA 92618. Directions to the Special Meeting
may be found at www.chromadex.com.
Information on how
to vote in person at the Special Meeting is discussed
below.
Who can vote at the Special Meeting?
Only
stockholders of record at the close of business on June 19, 2017
will be entitled to vote at the Special Meeting. On this record
date, there were
46,093,894
shares of Common Stock
outstanding and entitled to vote.
Stockholders of Record: Shares Registered in Your Name
If
on
June 19
, 2017 your
shares were registered directly in your name with the
Company
’
s transfer agent,
Equity Stock Transfer, LLC, then you are a stockholder of record.
As a stockholder of record, you may vote in person at the meeting
or vote by proxy. Whether or not you plan to attend the meeting, we
urge you to fill out and return the enclosed proxy card to ensure
your vote is counted.
Beneficial Owner: Shares Registered in the Name of a Broker or
Bank
If
on
June 19
, 2017 your
shares were held, not in your name, but rather in an account at a
brokerage firm, bank, dealer or other similar organization, then
you are the beneficial owner of shares held in
“
street name
”
and the Notice is being forwarded
to you by that organization. The organization holding your account
is considered to be the stockholder of record for purposes of
voting at the Special Meeting. As a beneficial owner, you have the
right to direct your broker or other agent regarding how to vote
the shares in your account. You are also invited to attend the
Special Meeting. However, since you are not the stockholder of
record, you may not vote your shares in person at the meeting
unless you request and obtain
a valid proxy from your broker or
other agent.
What am I voting on?
There
is one matter scheduled for a vote:
●
To approve the
issuance of Common Stock in connection with a financing
transaction.
What if another matter is properly brought before the Special
Meeting?
The
Board of Directors knows of no other matters that will be presented
for consideration at the Special Meeting. If any other matters are
properly brought before the meeting, it is the intention of the
persons named in the accompanying proxy to vote on those matters in
accordance with their best judgment.
Who may attend the Special Meeting?
Record
holders and beneficial owners may attend the Special
Meeting.
If your
shares are held in street name, you will need to bring a copy of a
brokerage statement or other documentation reflecting your stock
ownership as of the Record Date.
How do I vote?
You may
vote
“
For
”
or
“
Against
”
the proposal, or abstain from
voting.
The
procedures for voting are fairly simple:
Stockholder of Record: Shares Registered in Your Name
If you
are a stockholder of record, you may vote in person at the Special
Meeting, vote by proxy over the telephone, vote by proxy through
the internet or vote by proxy using a proxy card that you may
request or that we may elect to deliver at a later time. Whether or
not you plan to attend the meeting, we urge you to vote by proxy to
ensure your vote is counted. You may still attend the meeting and
vote in person even if you have already voted by
proxy.
●
To vote in person,
come to the Special Meeting and we will give you a ballot when you
arrive.
●
To vote over the
telephone, dial toll-free 1-855-557-4647 using a touch-tone phone
and follow the recorded instructions. You will be asked to provide
the company number and control number from the Notice. Your
telephone vote must be received by 6:00 p.m., Eastern Time on
August 9, 2017 to be counted.
●
To vote through the
internet, go to http://www.equitystock.com
to complete an
electronic proxy card. You will be asked to provide the company
number and control number from the Notice. Your internet vote must
be received by 6:00 p.m., Eastern Time on August 9, 2017 to be
counted.
●
To vote using the
proxy card, simply complete, sign and date the proxy card that may
be delivered
and return it
promptly in the envelope provided. If you return your signed proxy
card to us before the Special Meeting, we will vote your shares as
you direct.
Beneficial Owner: Shares Registered in the Name of Broker or
Bank
If you
are a beneficial owner of shares registered in the name of your
broker, bank, or other agent, you should have received a Notice
containing voting instructions from that organization rather than
from the Company. Simply follow the voting instructions in the
Notice to ensure that your vote is counted. To vote in person at
the Special Meeting, you must obtain a valid proxy from your
broker, bank or other agent. Follow the instructions from your
broker or bank included with these proxy materials, or contact your
broker or bank to request a proxy form.
How many votes do I have?
On each
matter to be voted upon, you have one vote for each share of Common
Stock you own as of
June
19
, 2017.
What happens if I do not vote?
Stockholder of Record: Shares Registered in Your Name
If you
are a stockholder of record and do not vote by completing your
proxy card, by telephone, through the internet
or in person at
the Special Meeting, your shares will not be voted.
Beneficial Owner: Shares Registered in the Name of Broker or
Bank
If you
are a beneficial owner and do not instruct your broker, bank, or
other agent how to vote your shares, the broker or nominee may not
vote your shares for the proposal without your instructions,
because the proposal is deemed to be a
“
non-routine
”
matter by the New York Stock
Exchange (
“
NYSE
”
).
What if I return a proxy card or otherwise vote but do not make
specific choices?
If you
return a signed and dated proxy card or otherwise vote without
marking voting selections, your shares will be voted
“
For
”
the proposal to approve the
issuance of Common Stock in connection with the financing
transaction. If any other matter is properly presented at the
meeting, your proxyholder (one of the individuals named on your
proxy card) will vote your shares using his or her best
judgment.
Who is paying for this proxy solicitation?
We will
pay for the entire cost of soliciting proxies. In addition to these
proxy materials, our directors and employees may also solicit
proxies in person, by telephone, or by other means of
communication. Directors and employees will not be paid any
additional compensation for soliciting proxies.
We may also
reimburse brokerage firms, banks and other agents for the cost of
forwarding proxy materials to beneficial owners. We have retained
Okapi Partners LLC (
“
Okapi
”
) for solicitation and advisory
services in connection with the solicitation relating to the
Special Meeting. Okapi has earned fees of $7,500 through the date
of this proxy statement, and may earn additional fees for its
services going forward. We will also reimburse Okapi for reasonable
out-of-pocket expenses.
What does it mean if I receive more than one Notice?
If you
receive more than one Notice, your shares may be registered in more
than one name or in different accounts. Please follow the voting
instructions on the Notices to ensure that all of your shares are
voted.
Can I change my vote after submitting my proxy?
Stockholder of Record: Shares Registered in Your Name
Yes.
You can revoke your proxy at any time before the final vote at the
meeting. If you are the record holder of your shares, you may
revoke your proxy in any one of the following ways:
●
You may submit
another properly completed proxy card with a later
date.
●
You may send a
timely written notice that you are revoking your proxy to the
Secretary, c/o ChromaDex Corporation, 10005 Muirlands Blvd, Suite
G, Irvine, CA 92618.
●
You may attend the
Special Meeting and vote in person. Simply attending the meeting
will not, by itself, revoke your proxy.
Your
most current proxy card or telephone or internet proxy is the one
that is counted.
Beneficial Owner: Shares Registered in the Name of Broker or
Bank
If your
shares are held by your broker or bank as a nominee or agent, you
should follow the instructions provided by your broker or
bank.
How are votes counted?
Votes
will be counted by the inspector of election appointed for the
meeting, who will separately count, for the proposal to approve the
issuance of Common Stock in connection with the financing
transaction, votes
“
For,
”
“
Against,
”
abstentions and broker
non-votes.
What are “broker non-votes”?
As
discussed above, when a beneficial owner of shares held in
“
street name
”
does not give instructions to the
broker or nominee holding the shares as to how to vote on matters
deemed by the NYSE to be
“
non-routine,
”
the broker or nominee cannot vote
the shares. These unvoted shares are counted as
“
broker non-votes.
”
How many votes are needed for the proposal to pass?
To
pass, the proposal to approve the issuance of Common Stock in
connection with the financing transaction must receive a
“
For
”
vote from the majority of shares
present and entitled to vote either in person or by proxy. If you
“
Abstain
”
from voting on the proposal, it
will have the same effect as an
“
Against
”
vote. Broker non-votes will have no
effect on the proposal. For clarity, pursuant to NASDAQ listing
rules, shares issued to the Purchasers (as defined below) in the
First Tranche and Second Tranche (each as defined below) are not
entitled to vote on the proposal. However, should any other
business come properly before the Special Meeting, the shares
issued to the Purchasers in the First Tranche and Second Tranche
will be entitled to vote on any such business.
What constitutes a quorum?
To
carry on business at the Special Meeting, we must have a
quorum.
A quorum is
present when a majority of the shares entitled to vote, as of the
Record Date, are represented in person or by proxy.
Thus,
holders representing at
least
23,046,948
votes
must be represented in person or by proxy to have a
quorum.
Your shares
will be counted towards the quorum only if you submit a valid proxy
(or one is submitted on your behalf by your broker, bank or other
nominee) or if you vote in person at the Special
Meeting.
Abstentions
and broker non-votes will be counted towards the quorum
requirement.
Shares
owned by us are not considered outstanding or considered to be
present at the Special Meeting.
If there is not a quorum at the
Special Meeting, our stockholders may adjourn the
meeting.
What should I do if I have other questions?
If you
have any questions or require any assistance with voting your
shares, please contact our proxy solicitor, Okapi, toll free at
(877) 629-6355.
How can I find out the results of the voting at the Special
Meeting?
Preliminary
voting results will be announced at the Special Meeting. Final
voting results will be published in a Current Report on
Form
8-K, which we will
file within four business days of the meeting.
PROPOSAL 1:
ISSUANCE OF COMMON STOCK
IN CONNECTION WITH A FINANCING TRANSACTION
Background
The key
terms of the agreements relating to the financing transaction are
summarized below. Copies of the related agreements have been filed
as (i) Exhibit 99.1 to our Current Report on Form 8-K, filed with
the SEC on April 27, 2017, (ii) Exhibit 99.1 to our Current Report
on Form 8-K filed with the SEC on May 2, 2017, and (iii) Exhibit
99.1 to our Current Report on Form 8-K filed with the SEC on May
25, 2017, and you are encouraged to review the full text of such
agreements. The descriptions set forth below are not complete and
are qualified in their entirety by reference to the full text of
the financing agreements filed with the Current Reports on Form 8-K
referenced above.
The Private Placement
On
April 26, 2017, we entered into a Securities Purchase Agreement (as
amended, the
“
Purchase
Agreement
”
) with Champion
River Ventures Limited and Pioneer Step Holdings Limited
(collectively, the
“
Purchasers
”
), pursuant to which we agreed to
sell and issue up to $25.0 million of our Common Stock at a
purchase price of $2.60 per share in three tranches of
approximately $3.5 million, $16.4 million and $5.1 million,
respectively (the
“
Financing
”
).
On
April 27, 2017, we completed the first tranche under the Purchase
Agreement (the
“
First
Tranche
”
), pursuant to
which we issued 1,346,154 shares of our Common Stock to the
Purchasers. On May 24, 2017, we completed the second tranche under
the Purchase Agreement (the
“
Second Tranche
”
), pursuant to which we issued
6,303,814 shares of our Common Stock to the
Purchasers.
We are
seeking stockholder approval to issue an additional 1,965,417
shares of our Common Stock in the third tranche under the Purchase
Agreement for gross proceeds of approximately $5.1 million (the
“
Third
Tranche
”
). If stockholder
approval of the Third Tranche is obtained at the Special Meeting,
the Third Tranche is expected to occur promptly after the Special
Meeting.
THIS
PROXY STATEMENT IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF
AN OFFER TO BUY ANY OF OUR SECURITIES. THE SECURITIES REFERRED TO
IN THIS PROXY STATEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE
“
SECURITIES ACT
”
), OR ANY STATE SECURITIES LAWS, AND
MAY NOT BE OFFERED OR SOLD ABSENT SUCH REGISTRATION UNDER THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
THEREOF.
The
sale and issuance of our shares of Common Stock to the Purchasers
is being made in reliance on the exemption from the registration
requirements of the Securities Act by virtue of Section 4(a)(2)
thereof and Rule 506 of Regulation D thereunder. In connection with
the Purchasers
’
execution
of the Purchase Agreement, the Purchasers
’
represented to us that they are
each an
“
accredited
investor
”
as defined in
Regulation D of the Securities Act and that the securities
purchased by them were acquired solely for their own account and
for investment purposes and not with a view to the future sale or
distribution.
Director Designation Rights
The
Purchase Agreement requires that the Board of Directors increase
the number of authorized directors so as to create two vacant seats
on the Board of Directors, which vacancies shall be filled with
nominees selected by the Purchasers on a date following our 2017
Annual Meeting of Stockholders. This Proposal 1 does not relate to
the election of such nominees. We anticipate that the nominees
selected by the Purchasers will be nominated for re-election by our
stockholders at our 2018 Annual Meeting of
Stockholders.
Registration Rights
In
connection with the Purchase Agreement, on April 29, 2017, we
entered into a Registration Rights Agreement with the Purchasers
(the
“
Registration Rights
Agreement
”
). Pursuant to
the Registration Rights Agreement, we agreed to (i) file one or
more registration statements with the SEC to cover the resale of
the shares sold pursuant to the Purchase Agreement by the
Purchasers, (ii) use reasonable best efforts to have all such
registration statements declared effective within the timeframes
set forth in the Registration Rights Agreement, and (iii) use
commercially reasonable efforts to keep such registration
statements effective during the timeframes set forth in the
Registration Rights Agreement. In the event that such registration
statements are not filed or declared effective within the
timeframes set forth in the Registration Rights Agreement, any such
effective registration statements subsequently become unavailable,
or the Purchasers are unable to sell the shares sold pursuant to
the Purchase Agreement because we have failed to satisfy the
current public information requirement of Rule 144 under the
Securities Act, we would be required to pay liquidated damages to
the Purchasers equal to 1.0% of the aggregate purchase price per
month for each default (up to a maximum of 5% of such aggregate
purchase price).
Board of Directors Recommendation
The
Board of Directors believes the approval of this Proposal 1 by our
stockholders is in the best interests of the Company and our
stockholders. First and most critically, the Board of Directors
believes that receiving the proceeds from the Third Tranche
significantly enhances the Company
’
s ability to execute on its current
business plan, including to develop the Company
’
s direct to consumer (
“
DTC
”
) product. The Board of Directors
also believes that approval of this Proposal 1 will increase the
Purchasers
’
and their
affiliates
’
ability to
participate in the Company
’
s future financings, if they so
choose, and that the Purchasers and their affiliates are a valuable
potential future financing source for the Company. To the extent
that the Purchasers are not able to, or choose not to, participate
in any future financing transaction of the Company because this
Proposal 1 is not approved, the Board of Directors believes that
the Company will lose this valuable potential financing source and
that the Company may be challenged to find similar financing
sources that are willing to provide additional financing to the
Company on terms agreeable to the Company. The Board of Directors
also believes that permitting the Purchasers to purchase additional
shares of Common Stock in the Third Tranche would be in the best
interests of the Company
’
s other stockholders because any
such purchase would be expected to further align the
Purchasers
’
interests
with the interests of our other stockholders and the success of the
Company.
Reason for Stockholder Approval
Our
Common Stock is listed on The NASDAQ Capital Market, and, as such,
we are subject to the NASDAQ Marketplace Rules, including NASDAQ
Listing Rule 5635. NASDAQ Listing Rule 5635(d) requires stockholder
approval prior to the sale, issuance or potential issuance by the
issuer of common stock (or securities convertible into or
exercisable common stock) equal to 20% or more of the common stock
or 20% or more of the voting power outstanding before the issuance
for less than the greater of book or market value of the stock, in
connection with a transaction other than a public offering. If the
Third Tranche occurs, the total number of shares of our Common
Stock sold in the Financing will exceed 20% of the total number of
shares of our Common Stock issued and outstanding on the date the
Purchase Agreement was executed. All of our Common Stock sold or to
be sold and issued in the Financing has been priced at $2.60 per
share, which was less than $3.18, the consolidated closing bid
price per share of our Common Stock as reported on The NASDAQ
Capital Market immediately preceding the election of the Purchasers
to consummate the Second Tranche and, as such, the Third Tranche
requires stockholder approval pursuant to NASDAQ Listing Rule
5635(d).
In
addition, NASDAQ Listing Rule 5635(b) requires stockholder approval
for issuances of securities that will result in a
“
change of control
”
of the issuer and NASDAQ may deem a
change of control to occur when, as a result of an issuance, an
investor or a group would own, or have the right to acquire, 20% or
more of the outstanding shares of common stock or voting power and
such ownership or voting power of an issuer would be the largest
ownership position of the issuer. Each Purchaser has the right to
nominate a director to our Board of Directors, and, should the
Third Tranche close, the Purchasers would collectively beneficially
own more than 20% of the outstanding shares of our Common Stock,
and, as such, the Third Tranche may be deemed to require
stockholder approval pursuant to NASDAQ Listing Rule
5635(b).
Use of Proceeds
A
portion of the net proceeds received from the First Tranche and
Second Tranche have been used for general corporate purposes and we
anticipate that the remaining net proceeds from the First Tranche
and the Second Tranche and the net proceeds from the Third Tranche,
if approved, will be used for working capital and general corporate
purposes, which may include for our DTC initiative, research and
development expenses, capital expenditures, regulatory affairs
expenditures, clinical trial expenditures and acquisitions of new
technologies and investments. As of the date of this solicitation,
we cannot specify with certainty all of the particular uses of the
proceeds. Accordingly, we will retain broad discretion over the use
of such proceeds. Pending the application of the net proceeds, we
may invest the proceeds in marketable securities and short-term
investments.
Overall Effect of the Proposal
If
approved, this Proposal 1 would result in an increase by 1,965,417
shares in the number of shares of our Common Stock outstanding,
and, as a result, current stockholders who are not participating in
the Financing would own a smaller percentage of our outstanding
Common Stock and, accordingly, a smaller percentage interest in the
voting power, liquidation value and book value of our Common Stock.
The sale or resale of any of our Common Stock issued pursuant to
the Financing could cause the market price of our Common Stock to
decline.
This
approval would not limit our ability to engage in a public
offering, as defined by NASDAQ, or to issue or sell a number of
shares of our Common Stock (including shares issuable upon
conversion or exercise of convertible debt, warrants or other
securities exercisable for or convertible into our Common Stock)
that is less than 20% of the outstanding shares on terms that might
or might not be similar to those in this Proposal 1.
Vote Required
The
affirmative vote of a majority of all of the votes present or
represented and entitled to vote at the Special Meeting is required
to approve this Proposal 1. For clarity, pursuant to NASDAQ listing
rules, shares issued to the Purchasers in the First Tranche and
Second Tranche are not entitled to vote on this Proposal
1.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE IN FAVOR OF
PROPOSAL 1.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
As of
May 25, 2017, there were approximately 46,093,894 shares of our
Common Stock outstanding.
The following table sets
forth certain information regarding the ownership of our Common
Stock as of May 25, 2017 by: each person known to us to
beneficially own more than 5% of our Common Stock; each director;
each of our named executive officers; and all directors and
executive officers as a group.
We calculated beneficial
ownership according to Rule 13d-3 of the Securities Exchange Act of
1934, as amended, as of that date.
Shares issuable upon exercise
of options or warrants that are exercisable within 60 days after
May 25, 2017 are included as beneficially owned by the
holder.
Beneficial
ownership generally includes voting and dispositive power with
respect to securities.
Unless otherwise indicated
below, the persons and entities named in the table have sole voting
and sole dispositive power with respect to all shares beneficially
owned. This table is based upon information supplied by officers,
directors and principal stockholders and Schedules 13D and 13G
filed with the SEC.
|
Name of Beneficial Owner (1)
|
Shares of Common Stock Beneficially Owned (2)
|
Aggregate Percentage Ownership
|
|
|
|
|
|
Champion River
Ventures Limited (3)
|
4,589,980
|
9.96
%
|
|
Dr. Phillip Frost
(4)
|
3,558,410
|
7.71
%
|
|
Pioneer Step
Holdings Limited (5)
|
3,059,988
|
6.64
%
|
|
Michael Brauser
(6)
|
3,055,467
|
6.61
%
|
|
Barry Honig
(7)
|
2,409,312
|
5.23
%
|
|
Black Sheep, FLP
(8)
|
2,075,052
|
4.50
%
|
|
Directors
|
|
|
|
Stephen Allen
(9)
|
133,334
|
*
|
|
Stephen Block
(10)
|
219,996
|
*
|
|
Jeff Baxter
(11)
|
89,167
|
*
|
|
Kurt
Gustafson
|
-
|
*
|
|
Steven
Rubin
|
-
|
*
|
|
Frank L. Jaksch Jr.
(12)
|
3,448,964
|
7.30
%
|
|
Robert Fried
(13)
|
708,207
|
1.53
%
|
|
Named Executive Officers
|
|
|
|
Frank L. Jaksch
Jr., Chief Executive Officer
|
(See above)
|
|
|
Robert Fried,
President and Chief Strategy Officer
|
(See above)
|
|
|
Thomas C. Varvaro,
Chief Financial Officer (14)
|
773,462
|
1.66
%
|
|
Troy Rhonemus,
Chief Operating Officer (15)
|
265,408
|
*
|
|
All directors and executive officers as a group
|
|
|
|
(7 Directors plus Chief Financial Officer
|
|
|
|
and Chief Operating
Officer)
(16)
|
5,638,537
|
11.59
%
|
*
Represents less than 1%.
(1)
Addresses for
certain of 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 exercise of stock options or 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)
Based on beneficial
ownership reported on form Schedule 13D filed with SEC on May 26,
2017, (i) Champion River Ventures Limited (
“
Champion River
”
) beneficially owned and had sole
voting and dispositive power with respect to 4,589,980 shares (the
“
Champion
Shares
”
), (ii) Prime Tech
Global Limited (
“
Prime
Tech
”
), by virtue of
being the sole shareholder of Champion River, may be deemed to
beneficially own and have sole voting and dispositive power with
respect to the Champion Shares, (iii) Mayspin Management Limited
(
“
Mayspin
”
), by virtue of being the sole
shareholder of Prime Tech, may be deemed to beneficially own and
have sole voting and dispositive power with respect to the Champion
Shares, and (iv) Li Ka Shing, by virtue of being the sole
shareholder of Mayspin, may be deemed to beneficially own and have
sole voting and dispositive power with respect to the Champion
Shares. In addition, as set forth in the Schedule 13D, pursuant to
a Securities Purchase Agreement dated April 26, 2017 (the
“
Purchase
Agreement
”
) between
Champion River, Pioneer Step Holdings Limited (
“
Pioneer Step
”
) and the Company, until the final
closing of the transactions contemplated by the Purchase Agreement,
each of Champion River and Pioneer Step may be deemed to be members
of a
“
group
”
, as defined in Rule 13d-5 of the
Exchange Act and therefore may be deemed to beneficially own the
shares beneficially owned by each other solely for such purposes.
Each of Champion River, Prime Tech, Mayspin and Li Ka Shing have
disclaimed beneficial ownership of any Pioneer Shares and the
Champion Shares reported in the table do not include any of the
Pioneer Shares. The registered office address for Champion River
and Mayspin is Vistra Corporate Services Centre, Wickhams Cay II,
Road Town, Tortola, VG1110, British Virgin Islands and the
registered office address for PrimeTech is P.O. Box 901, East Asia
Chambers, Road Town, Tortola, British Virgin Islands, and the
correspondence address for each of Champion River, PrimeTech, and
Mayspin is c/o 7/F, Cheung Kong Center, 2 Queen
’
s Road Central, Hong Kong. The
business address of Li Ka Shing is c/o 7/F, Cheung Kong Center, 2
Queen
’
s Road Central,
Hong Kong.
(4)
Based on beneficial
ownership reported on form Schedule 13D filed with SEC on September
14, 2016. Includes 1,354,479 shares of Common Stock and 88,889
warrants to purchase Common Stock held by Frost Gamma Investments
Trust of which Dr. Phillip Frost is the trustee. 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
stockholder of Frost Gamma, Inc. is Frost-Nevada Corporation. Dr.
Frost is also the sole stockholder of Frost-Nevada Corporation.
Includes 2,115,042 shares held by Phillip and Patricia Frost
Philanthropic Foundation, Inc. of which Dr. Phillip Frost is
President.
(5)
Based on beneficial
ownership reported on form Schedule 13D filed with SEC on May 26,
2017, (i) Pioneer Step Holdings Limited (
“
Pioneer Step
”
) beneficially owned and had sole
voting and dispositive power with respect to 3,059,988 shares (the
“
Pioneer
Shares
”
) and (ii) Chau
Hoi Shuen Solina Holly, by virtue of being the sole shareholder of
Pioneer Step, may be deemed to beneficially own and have sole
voting and dispositive power with respect to the Pioneer Shares. In
addition, as set forth in the Schedule 13D, pursuant to the
Purchase Agreement, until the final closing of the transactions
contemplated by the Purchase Agreement, each of Pioneer Step and
Champion River may be deemed to be members of a
“
group
”
, as defined in Rule 13d-5 of the
Exchange Act and therefore may be deemed to beneficially own the
shares beneficially owned by each other solely for such purposes.
Each of Pioneer Step and Solina Chau have disclaimed beneficial
ownership of any Champion Shares and the Pioneer Shares reported in
the table do not include any of the Champion Shares. The registered
office address for Pioneer Step is Vistra Corporate Services
Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin
Islands and its correspondence address is c/o 29th Floor, Harbour
Centre, 25 Harbour Road, Wanchai, Hong Kong. The business address
of Solina Chau is c/o 29th Floor, Harbour Centre, 25 Harbour Road,
Wanchai, Hong Kong.
(6)
Based on beneficial
ownership reported on form Schedule 13G filed with SEC on October
16, 2015 and Common Stock and warrants issued in a registered
direct offering on November 9, 2015. Includes 403,033 shares
directly held by Michael Brauser; 1,208,810 shares held by Michael
& Betsy Brauser TBE, 290,424 shares of Common Stock and 40,000
warrants held by Grander Holdings, Inc. 401K Profit Sharing Plan of
which Mr. Brauser is a trustee; 114,286 shares held by the Brauser
2010 GRAT of which Mr. Brauser is a trustee; 114,286 shares held by
Birchtree Capital, LLC of which Mr. Brauser is the manager; 564,286
shares held by BMB Holdings, LLLP of which Mr. Brauser is the
manager of its general partner and 238,095 shares held by Betsy
Brauser Third Amended Trust Agreement beneficially owned by Mr.
Brauser
’
s spouse which
are disclaimed by him. Includes 82,247 stock options exercisable
within 60 days.
(7)
Based on beneficial
ownership reported on form Schedule 13G filed with SEC on February
10, 2017. Includes (i) 1,800,418 shares of Common Stock held by
Barry Honig and (ii) 608,894 shares of Common Stock held by Renee
401K. Excludes (i) 68,888 shares of Common Stock underlying
warrants held by GRQ Consultants, Inc. 401K (
“
401K
”
) and (ii) 68,889 shares of Common
Stock underlying warrants held by GRQ Consultants, Inc. Roth 401K
FBO Barry Honig (
“
Roth
401K
”
), both of which
contain a 4.99% beneficial ownership blocker. Barry Honig is the
trustee of both 401K and Roth 401K and in such capacity has voting
and dispositive power over the securities held by such
entities.
(8)
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.
(9)
Includes 128,334
stock options exercisable within 60 days.
(10)
Includes 203,329
stock options exercisable within 60 days.
(11)
Includes 89,167
stock options exercisable within 60 days.
(12)
Includes 2,075,052
shares owned by Black Sheep, FLP beneficially owned by Mr. Jaksch
because he has shared voting power and shared dispositive power for
such shares. Includes 201,557 shares directly owned by Mr. Jaksch.
Includes 1,172,355 stock options exercisable within 60
days.
(13)
Direct ownership of
573,241 shares of Common Stock. Indirect ownership through 6,744
shares held by Jeremy Fried and 6,000 shares held by Benjamin
Fried, who are both sons of Robert Fried. Includes 122,222 stock
options exercisable within 60 days.
(14)
Includes 604,460
stock options exercisable within 60 days.
(15)
Direct ownership of
6,667 shares of Common Stock. Indirect ownership through Toni
Rhonemus IRA of 6,134 shares beneficially owned by Toni Rhonemus
who is Mr. Rhonemus
’
wife. Includes 252,607 stock options exercisable within 60
days.
(16)
Includes the shares
and stock options included above in footnotes (9) through
(15).
OTHER BUSINESS
As of
the date of this proxy statement, the management of the Company has
no knowledge of any business that may be presented for
consideration at the Special Meeting, other than that described
above. As to other business, if any, that may properly come before
the Special Meeting, or any adjournment thereof, it is intended
that the proxy hereby solicited will be voted in respect of such
business in accordance with the best judgment of the proxy
holders.
|
|
BY
ORDER OF THE BOARD OF DIRECTORS
/s/ Stephen Allen
Chairman
of the Board
June 20
, 2017
|
CHROMADEX CORPORATION
REVOCABLE PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 10, 2017
The
undersigned stockholder of ChromaDex Corporation (the
“
Company
”
) hereby appoints each of Stephen
Allen and Thomas C. Varvaro as its attorneys, agents and proxies,
each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote as the undersigned has
designated, all the shares of Common Stock of the Company held by
the undersigned at the special meeting of stockholders of the
Company (the
“
Special
Meeting
”
)
to be held at the
offices of ChromaDex Corporation, 10005 Muirlands Boulevard, Suite
G, Irvine, CA 92618, at 11:00 a.m., local time on
August 10
, 2017 and at any and all
postponements or adjournments thereof, with all powers that the
undersigned would possess if personally present, on the following
matters and in accordance with the following instructions, with
discretionary authority as to any other business that may properly
come before the meeting.
The
Board of Directors recommends a vote
“
FOR
”
the proposal listed
below.
|
|
Proposal 1.
|
Approval of Issuance of Common Stock in Connection with a Financing
Transaction
|
|||
|
☐
FOR
|
☐
AGAINST
|
|
☐
ABSTAIN
|
||
THIS PROXY, WHEN PROPERLY EXECUTED AND RETURNED, WILL BE VOTED IN
THE MANNER DIRECTED BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION
IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSAL 1, AS MORE
SPECIFICALLY DESCRIBED IN THE PROXY STATEMENT, AND IN THE
DISCRETION OF THE PROXY HOLDERS UPON ANY OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE SPECIAL MEETING OR ANY ADJOURNMENT OR
POSTPONEMENT THEREOF.
The
undersigned hereby ratifies and confirms all that said attorneys
and proxies, or any of them, or their substitutes, shall lawfully
do or cause to be done because of this proxy. The undersigned
acknowledges receipt of the Notice of Special Meeting and the Proxy
Statement which accompanies such notice.
|
|
|
|
|
|
|
DATED:
__________, 2017
|
|
|
|
(Name)
|
|
|
|
|
|
|
|
|
|
|
|
(Signature)
|
|
|
|
|
|
|
|
|
|
|
|
(Signature,
if held jointly)
|
Sign
exactly as name(s) appear(s) on stock certificate(s). If stock is
held jointly, each holder must sign. If signing is by attorney,
executor, administrator, trustee or guardian, give full title as
such. A corporation or partnership must sign by an authorized
officer or general partner, respectively.
PLEASE SIGN, DATE AND RETURN THIS
PROXY IN THE ENVELOPE PROVIDED TO EQUITY STOCK TRANSFER C/O MOHIT
BHANSALI AT 237 W 37
TH
ST. SUITE 602, NEW YORK, NY
10018.
You may
also submit your proxy facsimile to (646) 201-9006 or
electronically on the Internet by going to
http://www.equitystock.com
and following the instructions provided therein.
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