ChromaDex gets financial backing for expansion plans
Jinke Group (Hong Kong) Ltd has agreed to purchase 1,916,811 shares of common stock for a purchase price of $0.5217 per share, which will provide ChromaDex with proceeds of about $1,000,000. The transaction also gives Jinke warrants to purchase an additional 1,333,334 shares of common stock at $0.80 a share.
ChromaDex said in May that it was uncertain whether it would be possible to secure funding to continue expansion “on terms favorable to it or at all” due to the difficult economic environment. However, the company has said that it expects demand for its services to increase in the wake of upcoming US Food and Drug Administration (FDA) guidelines for the dietary supplement industry, and as the trend for ‘green chemistry’ intensifies for the food and cosmetics industries.
It also expects growth to stem from the food and beverage industry’s increasing use of stevia-derived sweeteners, for which it developed award-winning analytical standards last year.
CEO and co-founder of ChromaDex Frank Jakschsaid "We are pleased that Jinke Group has shown such confidence in ChromaDex. The funds from Jinke will provide ChromaDex with additional working capital to support our business expansion plans.”
The company has said that it intends its expansion to be ‘organic’ – that is, building on its existing assets, rather than through acquisitions.
Jaksch added: “We are confident this financing will help position the company to support the next phase of growth in becoming the premier provider of phytochemical and botanical reference standards to the functional food, cosmetic, dietary supplement, pharmaceutical / life sciences and other industries."
Stevia standards
The company entered into an agreement with Cargill to ensure quality and consistency of stevia extracts in November last year, ahead of Cargill becoming one of the first two companies to be issued with an FDA letter of non-objection that its stevia-derived Reb A sweetener was generally recognized as safe (GRAS).
ChromaDex offers a range of stevia-related sweet compounds as analytical reference standards or research materials which food and beverage companies can use to validate stevia-derived Reb A for use in consumer products. The analytical tools are used by Cargill in its production process to ensure quality benchmarks are met.
The firm's major focus is the development of reference standards for botanicals, supplement ingredients and food ingredients, and it currently has standards for over 3000 products.
