Cerule is an Oregon based “distributor of extracts from Blue-Green algae” (also known as Aphanizomenon flos-aquae or AFA).

Cerule holds a number of patents regarding the use of AFA and AFA extracts, specifically known as “StemEnhance,” and the effect thereof on stem cells release, migration and overall physiology.

For more information on the Cerule MLM business opportunity, refer to BehindMLM’s
Cerule review
(published October 2nd, 2017).

One of Cerule products is StemEnhance, an algae blend developed back in 2006 and owns the StemEnhance trademark.

In May 2006 Cerule and Stemtech entered into a StemEnhance supply agreement.

Cerule agreed to manufacture and supply AFA-based products, including StemEnhance, for StemTech to market and sell in the Network Marketing and Direct Marketing industries.

Under the terms of the Supply Agreement, Cerule agreed not to sell StemEnhance to parties other than StemTech, subject to certain exceptions, so long as StemTech met certain purchase obligations under the contract.

In exchange for product exclusivity, Stemtech agreed to pay Cerulea one-time licensing fee as well as a royalty payments of 79 cents per StemEnhance unit beyond the first 50,000 units sold.

In addition to the licensing and royalty payments under the terms of the Supply Agreement, StemTech also agreed to pay Cerule a fixed price per kilogram of StemEnhance ordered by StemTech.

Despite the agreement calling for Stemtech ‘
to remit to Cerule full, complete, and timely payments for all shipments of StemEnhance it ordered
‘,

since nearly the beginning of the parties’ contractual relationship, StemTech has exhibited a pattern of failing to adhere to its contractual obligations by failing to remit full payments for the amounts owed to Cerule.

At times, the outstanding, overdue balance owed by StemTech to Cerule for quantities of StemEnhance actually ordered and received by StemTech has often ballooned to over $1,000,000.

Cerule claim Stemtech has represented the reason for non-payment has been caused, in part, by

insufficient capitalization of StemTech, StemTech’s resulting insufficient cash flow, as well as its concurrent inability to meet certain creditor obligations separate and apart from those owed to Cerule.

In 2014 Cerule and Stemtech came to an agreement, through which Stemtech would ‘
pay down its overdue, outstanding balance by way of regular, weekly payments.
‘

That worked out for roughly a year and a half, until Stemtech stopped making payments in January, 2016.

By April 2016, Defendants’ outstanding, overdue balance to Cerule was

approximately $650,000.

Cerule sent Stemtech written notice of their breach of contract and intention to terminate the supply agreement.

Cerule believes Stemtech paid them just enough to keep them from terminating the supply agreement.

Cerule’s belief was validated when, on May 16, 2016, it received written

notification from Carter that Defendants would no longer utilize the AFA-based produc

🤖 Quick Answer

What is the legal dispute between Cerule and Stemtech?
Cerule, an Oregon-based distributor of blue-green algae extracts, sued Stemtech for breach of contract regarding a supply agreement established in May 2006. Under this agreement, Cerule manufactured and supplied StemEnhance, an AFA-based product, for Stemtech to distribute through network marketing and direct sales channels.

What is StemEnhance and who developed it?
StemEnhance is an algae blend developed by Cerule in 2006, containing Aphanizomenon flos-aquae (AFA) extracts. Cerule holds patents related to StemEnhance's effects on stem cell release, migration, and physiological processes, and owns the StemEnhance trademark.

What is Cerule's primary business activity?
Cerule

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