Sonoma Pharmaceuticals, Inc. Enters Manufacturing and Supply Agreement with Kenvue Brands LLC

Key Developments:

• Sonoma Pharmaceuticals, Inc. (NASDAQ: SNOA) has entered into a significant Manufacturing and Supply Agreement with Kenvue Brands LLC, effective October 24, 2025.
• This material agreement provides for Sonoma to manufacture and supply certain products (referred to as “Product”) for Kenvue, with detailed terms around reliability, quality, business continuity, and confidentiality.
• The agreement is considered material and has been filed with the SEC as part of Sonoma’s regulatory obligations. Certain portions of the agreement have been omitted for confidentiality, but the company has committed to providing omitted information to the SEC upon request.

Detailed Terms of the Agreement

• Reliability and Performance Requirements:
  • Sonoma is required to manufacture and supply Products according to strict performance and reliability metrics, as outlined in Schedule H of the agreement.
  • The company must dedicate adequate resources and use its best efforts to ensure timely fulfillment and performance of these metrics, with regular reporting required.
• Financial Collaboration and Audit:
  • Kenvue requires ongoing financial health monitoring of its suppliers. Sonoma, as a publicly traded company, must continue filing audited annual and unaudited quarterly financial statements with the SEC.
• Business Continuity Obligations:
  • Sonoma must maintain a business continuity plan (BCP) throughout the term of the agreement. The plan must address potential disruptions through alternative sourcing and internal production adjustments.
  • Kenvue has acknowledged Sonoma’s right to maintain confidentiality regarding its intellectual property, technical information, and other sensitive data related to production.
• Cost Improvements and Price Reductions:
  • Any improvements requiring capital investment by Sonoma must be discussed and agreed upon by both parties, including related price changes for the supplied products.
  • Once Sonoma recovers its capital investment, all further cost savings are to be passed to Kenvue as lower prices.
• Quality and Regulatory Compliance:
  • Manufacturing and testing must comply with cGMPs and industry standards, as well as specific quality roles and responsibilities defined in a separate Quality Agreement.
  • Sonoma must provide timely data to Kenvue for regulatory compliance purposes, including prompt communication of any major safety issues or alerts from the FDA or other authorities.
• Confidentiality and Public Disclosure:
  • Both parties have agreed to maintain the confidentiality of proprietary information. However, Sonoma is required by law to file the agreement with the SEC, with sensitive portions redacted where possible.
  • Should the SEC require the disclosure of redacted information, Sonoma will comply after giving Kenvue reasonable advance notice.
• Term and Execution:
  • The agreement is executed by authorized representatives from both companies, including Manmeet Narula (Senior Director Procurement, Kenvue) and Amy Trombly (Sonoma Pharmaceuticals, Inc.).

Potential Shareholder Impact and Price Sensitivity

This agreement is a material event for Sonoma Pharmaceuticals, Inc. and could have a significant impact on its future revenues, operational stability, and share price. Key points that may affect shareholder value include:

• Establishment of a multi-year supply relationship with a prominent customer, providing potential revenue growth and increased operational visibility.
• Requirements for maintaining robust quality, reliability, and business continuity standards, which may improve Sonoma’s reputation and risk profile.
• Obligations to pass cost savings to Kenvue, which could impact long-term margins but may increase order volume and strengthen the partnership.
• SEC disclosure of the agreement underlines its importance and transparency for investors.

Any failure by Sonoma to comply with the agreement’s terms or any major safety or quality event could negatively affect its relationship with Kenvue and have adverse effects on share value.

Other Noteworthy Disclosures

• There is no indication that Sonoma is an emerging growth company under current SEC definitions.
• No written communications, soliciting materials, or pre-commencement tender offers are associated with this filing.
• The company’s common stock trades under the symbol SNOA on the Nasdaq Stock Market.

Disclaimer

This article is for informational purposes only. It is not investment advice, nor a recommendation to buy or sell any security. Readers should conduct their own due diligence and consult professional advisors before making any investment decisions. The information herein is based on the company’s SEC filings and may contain forward-looking statements subject to risks and uncertainties. Actual results may differ materially from those expressed or implied.

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