Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 03, 2020 | Jun. 30, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | ChromaDex Corp. | ||
Entity Central Index Key | 0001386570 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 190,400,000 | ||
Entity Common Stock, Shares Outstanding | 59,787,897 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation State Country Code | DE | ||
Entity File Number | 001-37752 | ||
Title of 12b security | Common Stock, $0.001 par value per share | ||
Entity Trading Symbol | CDXC | ||
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash, including restricted cash of $0.2 million and $0.2 million, respectively | $ 18,812 | $ 22,616 |
Trade receivables, net of allowances of $2.8 million and $0.5 million, respectively; receivables from related party: $0.8 million and $0.7 million, respectively | 2,175 | 4,359 |
Contract assets | 0 | 56 |
Receivable held at escrow, net of allowance of $0.1 million | 0 | 677 |
Inventories | 11,535 | 8,249 |
Prepaid expenses and other assets | 996 | 577 |
Total current assets | 33,518 | 36,534 |
Leasehold improvements and equipment, net | 3,765 | 3,585 |
Intangible assets, net | 1,311 | 1,547 |
Right of use assets | 891 | 0 |
Other long-term assets | 762 | 566 |
Total assets | 40,247 | 42,232 |
Current Liabilities | ||
Accounts payable | 9,626 | 9,548 |
Accrued expenses | 4,415 | 4,444 |
Current maturities of operating lease obligations | 595 | 0 |
Current maturities of finance lease obligations | 258 | 173 |
Contract liabilities and customer deposits | 169 | 275 |
Total current liabilities | 15,063 | 14,440 |
Deferred revenue | 3,873 | 0 |
Operating lease obligations, less current maturities | 848 | 0 |
Finance lease obligations, less current maturities | 18 | 137 |
Deferred rent | 0 | 477 |
Total liabilities | 19,802 | 15,054 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Common stock, $.001 par value; authorized 150,000 shares; issued and outstanding December 31, 2019 59,562 shares and December 31, 2018 55,089 shares | 60 | 55 |
Additional paid-in capital | 142,285 | 116,876 |
Accumulated deficit | (121,900) | (89,753) |
Total stockholders' equity | 20,445 | 27,178 |
Total liabilities and stockholders' equity | $ 40,247 | $ 42,232 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Restricted cash | $ 200 | $ 200 |
Trade receivables, allowances | 2,800 | 500 |
Receivables from related party | 800 | 700 |
Receivables held in escrow, allowances | $ 0 | $ 100 |
Common stock, par value per share | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in thousands) | 150,000 | 150,000 |
Common stock, shares, issued (in thousands) | 59,562 | 55,089 |
Common stock, shares, outstanding (in thousands) | 59,562 | 55,089 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Income Statement [Abstract] | |||
Sales, net | $ 46,291 | $ 31,557 | |
Cost of sales | 20,522 | 15,502 | |
Gross profit | 25,769 | 16,055 | |
Operating expenses: | |||
Sales and marketing | 18,216 | 16,537 | |
Research and development | 4,420 | 5,478 | |
General and administrative | 34,308 | 27,137 | |
Other | 125 | 75 | |
Operating expenses | 57,069 | 49,227 | |
Operating loss | (31,300) | (33,172) | |
Nonoperating expense: | |||
Interest expense, net | (847) | (79) | |
Other | 0 | (65) | |
Nonoperating expense | (847) | (144) | |
Net loss | $ (32,147) | $ (33,316) | |
Basic and diluted loss per common share | $ (0.56) | $ (0.61) | |
Basic and diluted weighted average common shares outstanding (in thousands) | [1] | 57,056 | 55,006 |
[1] | Includes approximately 0.2 million shares of restricted stock for each of the years 2019 and 2018, which are participating securities that feature voting and dividend rights. |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Beginning balance, shares (in thousands) at Dec. 30, 2017 | 54,697 | |||
Beginning balance, amount at Dec. 30, 2017 | $ 55 | $ 110,380 | $ (56,601) | $ 53,834 |
Adjustment to retained earnings: cumulative effect of initially applying ASC 606 | 164 | 164 | ||
Issuance of common stock for conversion of debt and accrued interest, amount | 0 | |||
Exercise of stock options, shares (in thousands) | 132 | |||
Exercise of stock options, amount | 529 | 529 | ||
Repurchase of common stock, shares (in thousands) | (75) | |||
Repurchase of common stock, amount | (404) | (404) | ||
Vested restricted stock, shares (in thousands) | 2 | |||
Vested restricted stock, amount | 0 | |||
Share-based compensation, shares (in thousands) | 333 | |||
Share-based compensation, amount | 6,371 | 6,371 | ||
Net loss | (33,316) | (33,316) | ||
Ending balance, shares (in thousands) at Dec. 31, 2018 | 55,089 | |||
Ending balance, amount at Dec. 31, 2018 | $ 55 | 116,876 | (89,753) | 27,178 |
Adjustment to retained earnings: cumulative effect of initially applying ASC 606 | 0 | |||
Issuance of common stock, net of offering costs, shares (in thousands) | 1,568 | |||
Issuance of common stock, net of offering costs, amount | $ 2 | 6,770 | 6,772 | |
Issuance of common stock for conversion of debt and accrued interest, shares (in thousands) | 2,267 | |||
Issuance of common stock for conversion of debt and accrued interest, amount | $ 2 | 10,121 | 10,123 | |
Debt discount to convertible notes | 282 | 282 | ||
Exercise of stock options, shares (in thousands) | 427 | |||
Exercise of stock options, amount | $ 1 | 1,064 | 1,065 | |
Exercise of warrants, shares (in thousands) | 44 | |||
Exercise of warrants, amount | 0 | |||
Repurchase of common stock, amount | 0 | |||
Share-based compensation, shares (in thousands) | 167 | |||
Share-based compensation, amount | 7,172 | 7,172 | ||
Net loss | (32,147) | (32,147) | ||
Ending balance, shares (in thousands) at Dec. 31, 2019 | 59,562 | |||
Ending balance, amount at Dec. 31, 2019 | $ 60 | $ 142,285 | $ (121,900) | $ 20,445 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flows From Operating Activities | ||
Net loss | $ (32,147) | $ (33,316) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation of leasehold improvements and equipment | 762 | 607 |
Amortization of intangibles | 246 | 235 |
Amortization of right of use assets | 515 | 0 |
Share-based compensation | 7,172 | 6,371 |
Allowance for doubtful trade receivables | 2,228 | (132) |
Loss from disposal of equipment | 7 | 1 |
Amortization of covertible notes issuance costs and discount | 846 | 0 |
Non-cash financing costs | 134 | 70 |
Other non-cash expense | 0 | 65 |
Changes in operating assets and liabilities: | ||
Trade receivables | (44) | 1,111 |
Contract assets | 56 | 0 |
Inventories | (3,286) | (2,453) |
Prepaid expenses and other assets | (247) | 65 |
Accounts payable | 78 | 5,829 |
Accrued expenses | 103 | 668 |
Deferred revenue | 3,873 | 0 |
Customer deposits and other | (106) | 69 |
Payments on operating leases | (629) | 0 |
Deferred rent | 0 | 2 |
Due to officer | 0 | (100) |
Net cash used in operating activities | (20,439) | (20,908) |
Cash Flows From Investing Activities | ||
Proceeds from disposal of assets held at escrow | 553 | 0 |
Purchases of leasehold improvements and equipment | (743) | (1,321) |
Purchases of intangible assets | (10) | (131) |
Investment in other long-term assets | (49) | (323) |
Net cash used in investing activities | (249) | (1,775) |
Cash Flows From Financing Activities | ||
Proceeds from issuance of common stock, net | 6,772 | 0 |
Proceeds from sale of convertible notes | 10,000 | 0 |
Payment of convertible notes issuance costs | (565) | 0 |
Payment of debt issuance cost | (113) | (19) |
Proceeds from exercise of stock options | 1,066 | 529 |
Repurchase of common stock | 0 | (404) |
Principal payments on finance leases | (276) | (196) |
Net cash provided by (used in) financing activities | 16,884 | (90) |
Net decrease in cash | (3,804) | (22,773) |
Cash beginning of year, including restricted cash of $0.2 million for 2019 | 22,616 | 45,389 |
Cash ending of year, including restricted cash of $0.2 million for both 2019 and 2018 | 18,812 | 22,616 |
Supplemental Disclosures of Cash Flow Information | ||
Cash payments for interest on finance leases | 33 | 41 |
Supplemental Schedule of Noncash Operating Activity | ||
Adjustment to retained earnings - cumulative effect of initially applying ASC 606 | 0 | 164 |
Financing lease obligation incurred for prepayment of licensing fees | 99 | 0 |
Right of use assets transferred | 62 | 0 |
Operating lease obligation transferred | 65 | 0 |
Supplemental Schedule of Noncash Investing Activity | ||
Financing lease obligation incurred for purchase of software | 143 | 0 |
Operating lease obligation incurred for tenant improvement credit received | 64 | 0 |
Supplemental Schedule of Noncash Financing Activity | ||
Issuance of common stock for conversion of debt and accrued interest | $ 10,123 | $ 0 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Cash Flows [Abstract] | ||
Restricted cash | $ 200 | $ 200 |
Nature of Business
Nature of Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | ChromaDex Corporation and its wholly owned subsidiaries, ChromaDex, Inc., Healthspan Research, LLC, ChromaDex Analytics, Inc. and ChromaDex Asia Limited (collectively, the “Company” or, in the first person as “we” “us” and “our”) are a science-based integrated nutraceutical company devoted to improving the way people age. The Company's scientists partner with leading universities and research institutions worldwide to discover, develop and create solutions to deliver the full potential of nicotinamide adenine dinucleotide and its impact on human health. Its flagship ingredient, NIAGEN® nicotinamide riboside, sold directly to consumers as TRU NIAGEN®, is backed with clinical and scientific research, as well as intellectual property protection. The Company also has analytical reference standards and services segment, which focuses on natural product fine chemicals (known as “phytochemicals”) and related chemistry services. |
Liquidity
Liquidity | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity | The Company has incurred a net loss of approximately $32.1 million for the year ended December 31, 2019, and net loss of approximately $33.3 million for the year ended December 31, 2018. As of December 31, 2019, cash and cash equivalents totaled approximately $18.8 million, which includes restricted cash of approximately $0.2 million. The Company anticipates that its current cash, cash equivalents and cash to be generated from operations will be sufficient to meet its projected operating plans through at least the next twelve months from the issuance date of this report. The Company may, however, seek additional capital within the next twelve months, both to meet its projected operating plans within the next twelve months and/or to fund its longer term strategic objectives. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant accounting policies are as follows: Basis of presentation: Adopted Accounting Standards in Fiscal 2019 Effective the first day of fiscal year 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The Company adopted ASU 2016-02 applying the modified retrospective approach. For leases with a term of 12 months or less, the Company made an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The Company’s leased assets and corresponding liabilities exclude non-lease components. Within the opening balances for the fiscal year beginning January 1, 2019, the Company recognized right of use assets of approximately $1.5 million and corresponding operating lease obligations liabilities of approximately $2.1 million which includes approximately $0.6 million deferred rent liability the Company previously recognized as of December 31, 2018. The Company determines if an arrangement is a lease at inception and classifies it as finance or operating. Leased assets and corresponding liabilities are recognized based on the present value of the lease payments over the lease term utilizing an estimated borrowing rate for a secured loan with a maturity corresponding to the remaining lease term. Leases primarily consist of real property and laboratory equipment. Effective the first day of fiscal year 2019, the Company adopted ASU No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Among others, Part I of ASU 2017-11 allows companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity’s own stock. As a result, financial instruments (or embedded conversion features) with down round features may no longer be required to be accounted for as derivative liabilities. A company recognizes the value of a down round feature only when it is triggered and the strike price has been adjusted downward. Use of accounting estimates Revenue recognition The Company accounts for shipping and handling activities performed as cost of sales under a fulfillment cost and any fee received for shipping and handling as part of the transaction price and recognize revenue when control of the good transfers. Shipping and handling fees billed to customers included in net sales for the years ending December 31, 2019 and December 31, 2018 are as follows: (In thousands) 2019 2018 Shipping and handling fees billed $ 360 $ 287 Taxes collected from customers and remitted to governmental authorities are excluded from revenue, which is presented on a net basis in the statement of operations. Restricted cash Trade accounts receivable, net (In thousands) 2019 2018 Allowances Related to Elysium Health $ 2,733 $ 500 Other Allowances 31 37 $ 2,764 $ 537 Trade accounts receivable are written off when deemed uncollectible. Recoveries of trade accounts receivable previously written off are recorded when received. Credit risk Inventories Our normal operating cycle for reference standards is currently longer than one year. The Company regularly reviews inventories on hand and reduces the carrying value for slow-moving and obsolete inventory, inventory not meeting quality standards and inventory subject to expiration. The reduction of the carrying value for slow-moving and obsolete inventory is based on current estimates of future product demand, market conditions and related management judgment. Any significant unanticipated changes in future product demand or market conditions that vary from current expectations could have an impact on the value of inventories. Intangible assets Leasehold improvements and equipment, net Long-lived assets are reviewed for impairment on a periodic basis and when changes in circumstances indicate the possibility that the carrying amount may not be recoverable. Long-lived assets are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets. If the forecast of undiscounted future cash flows is less than the carrying amount of the assets, an impairment charge would be recognized to reduce the carrying value of the assets to fair value. If a possible impairment is identified, the asset group’s fair value is measured relying primarily on a discounted cash flow methodology. Customer deposits Income taxes The Company has not recorded a reserve for any tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company files tax returns in all appropriate jurisdictions, which include a U.S. federal tax return and various state tax returns. Open tax years for these jurisdictions are 2016 to 2019, which statutes expire in 2020 to 2023, respectively. When and if applicable, potential interest and penalty costs are accrued as incurred, with expenses recognized in general and administrative expenses in the statements of operations. As of December 31, 2019, the Company has no liability for unrecognized tax benefits. Research and development costs: Advertising: Share-based compensation Share-based compensation cost is recorded for all option grants and awards of non-vested stock based on the grant date fair value of the award, and is recognized over the service period required for the award. Prior to October 1, 2018, share-based compensation cost for non-employees was remeasured over the vesting term as earned. The fair value of the Company’s stock options is estimated at the date of grant using the Black-Scholes based option valuation model. The volatility assumption is based on the historical volatility of the Company's common stock. The dividend yield assumption is based on the Company’s history and expectation of future dividend payouts on the common stock. The risk-free interest rate is based on the implied yield available on U.S. treasury zero-coupon issues with an equivalent remaining term. For the expected term, the Company uses SEC Staff Accounting Bulletin No. 107 simplified method for “plain vanilla” options with following characteristics: (i) the share options are granted at the market price on the grant date; (ii) exercisability is conditional on performing service through the vesting date on most options; (iii) if an employee terminates service prior to vesting, the employee would forfeit the share options; (iv) if an employee terminates service after vesting, the employee would have 30 to 90 days to exercise the share options; and (v) the share options are nontransferable and nonhedgeable. Market conditions that affect vesting of stock options are considered in the grant-date fair value. The issues surrounding the valuation for such awards can be complex and consideration needs to be given for how the market condition should be incorporated into the valuation of the award. The Company considers using other valuation techniques, such as Monte Carlo simulations based on a lattice approach, to value awards with market conditions. The Company recognizes compensation expense over the requisite service period using the straight-line method for option grants without performance conditions. For stock options that have both service and performance conditions, the Company recognizes compensation expense using the graded attribution method. Compensation expense for stock options with performance conditions is recognized only for those awards expected to vest. The Company recognizes forfeitures when they occur. From time to time, the Company awards shares of its common stock to non-employees for services provided or to be provided. The fair value of the awards are measured either based on the fair market value of stock at the date of grant or the value of the services provided, based on which is more reliably measurable. Since these stock awards are fully vested and non-forfeitable, upon issuance the measurement date for the award is usually reached on the date of the award. Fair Value Measurement: The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. Financial instruments The carrying amounts reported in the balance sheet for capital lease obligations are present values of the obligations, excluding the interest portion. Recent accounting standards |
Loss Per Share Applicable to Co
Loss Per Share Applicable to Common Stockholders | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Loss Per Share Applicable to Common Stockholders | The following table sets forth the computations of loss per share amounts applicable to common stockholders for the years ended December 31, 2019 and December 31, 2018. Years Ended (In thousands, except per share data) 2019 2018 Net loss $ (32,147 ) $ (33,316 ) Basic and diluted loss per common share $ (0.56 ) $ (0.61 ) Basic and diluted weighted average common shares outstanding (1): 57,056 55,006 Potentially dilutive securities (2): Stock options 10,551 9,089 Warrants - 204 (1) Includes approximately 0.2 million shares of restricted stock for each of the years 2019 and 2018, which are participating securities that feature voting and dividend rights. (2) Excluded from the computation of loss per share as their impact is antidilutive. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | The amounts of major classes of inventory for the periods ended December 31, 2019 and December 31, 2018 are as follows: (In thousands) 2019 2018 Bulk ingredients $ 1,364 $ 2,254 Reference standards 635 751 Consumer Products - Finished Goods 4,877 2,450 Consumer Products - Work in Process 4,659 2,794 $ 11,535 $ 8,249 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible assets (In thousands) 2019 2018 Weighted Average Total Amortization Period Healthspan Research LLC Acquisition $ 1,346 $ 1,346 10 years License agreements and other 1,635 1,625 9 years Less accumulated depreciation (1,670 ) (1,424 ) $ 1,311 $ 1,547 Amortization Estimated aggregate amortization (In thousands) Years ending December: 2020 $ 242 2021 223 2022 186 2023 157 2024 153 Thereafter 350 $ 1,311 |
Leasehold Improvements and Equi
Leasehold Improvements and Equipment, Net | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Leasehold Improvements and Equipment, Net | Leasehold improvements and (In thousands) 2019 2018 Useful Life Laboratory equipment $ 2,859 $ 2,755 10 years Leasehold improvements 2,320 2,127 Lesser of lease term or estimated useful life Computer equipment 1,104 604 3 to 5 years Furniture and fixtures 201 143 7 to 10 years Construction in progress 71 7 6,555 5,636 Less accumulated depreciation 2,790 2,051 $ 3,765 $ 3,585 Depreciation expenses on leasehold improvements and equipment included in the consolidated statement of operations for the years ended December 31, 2019 and December 31, 2018 were approximately $0.8 million and $0.6 million, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Operating Leases As of December 31, 2019, the Company had operating lease assets in right of use assets of approximately $0.9 million and corresponding operating lease liabilities of approximately $1.4 million. For the year ended December 31, 2019, the following were expenses incurred in connection with operating leases: (In thousands) For the Year Ended Dec. 31, 2019 Operating leases Operating lease expense $ 663 Variable lease expense 246 Operating lease expense 909 Short-term lease rent expense 70 Total expense $ 979 At Dec. 31, 2019 Weighted-average remaining lease term (years) – operating leases 1.9 Weighted-average discount rate – operating leases 8.0 % Minimum future lease payments under operating leases as of December 31, 2019 are as follows: (In thousands) Year Ending December 31, 2020 $ 690 Year Ending December 31, 2021 614 Year Ending December 31, 2022 138 Year Ending December 31, 2023 143 Year Ending December 31, 2024 25 Total 1,610 Less present value discount 167 Operating lease liabilities 1,443 Less current portion 595 Long-term obligations under operating leases $ 848 Finance Leases As of December 31, 2019 and December 31, 2018, the Company had finance lease assets in equipment assets of approximately $0.7 million and $0.7 million, respectively and corresponding finance lease liabilities of approximately $0.3 million and $0.3 million, respectively. For the years ended December 31, 2019 and December 31, 2018, following were expenses incurred in connection with finance leases: For the Year Ended Dec. 31, 2019 For the Year Ended Dec. 31, 2018 (In thousands) Finance leases Amortization of equipment assets $ 83 $ 87 Interest on lease liabilities 33 41 Total expenses $ 116 $ 128 At Dec. 31, 2019 Weighted-average remaining lease term (years) – finance leases 0.9 Weighted-average discount rate – finance leases 8.9 % Minimum future lease payments under finance leases as of December 31, 2019 are as follows: (In thousands) Year Ending December 31, 2020 $ 272 Year Ending December 31, 2021 18 Total 290 Less present value discount 14 Finance lease liabilities 276 Less current portion 258 Long-term obligations under finance leases $ 18 |
Line of Credit
Line of Credit | 12 Months Ended |
Dec. 31, 2019 | |
Line of Credit Facility [Abstract] | |
Line of Credit | On November 12, 2019, the Company entered into a business financing agreement with Western Alliance Bank (the “Credit Agreement”), in order to establish a formula based revolving credit line pursuant to which the Company may borrow an aggregate principal amount of up to $7.0 million, subject to the terms and conditions of the Credit Agreement. As of December 31, 2019, the Company did not have any outstanding loan payable from this line of credit arrangement. The interest rate as of December 31, 2019 was 6.25%. The interest rate is calculated at a floating rate per month equal to (a) the greater of (i) 4.75% per year or (ii) the Prime Rate published by The Wall Street Journal, plus (b) 1.50 percentage points, plus an additional 5.00 percentage points during any period that an event of default has occurred and is continuing. The Company’s obligations under the Credit Agreement are secured by a security interest in substantially all of the Company’s current and future personal property assets, including intellectual property. Any borrowings, interest or other fees or obligations that the Company owes will become due and payable on November 12, 2021. The Credit Agreement includes quick ratio and minimum liquidity financial covenants. The Company is also subject to a number of affirmative and restrictive covenants, including covenants regarding delivery of financial statements, maintenance of inventory, payment of taxes, maintenance of insurance, dispositions of property, business combinations or acquisitions and incurrence of additional indebtedness, among other customary covenants. Debt Issuance Costs The Company incurred debt issuance costs of approximately $0.1 million in connection with this line of credit arrangement and had an unamortized balance of approximately $0.1 million as of December 31, 2019. For the line of credit arrangement, the Company elected a policy to keep the debt issuance costs as an asset, regardless of whether an amount is drawn. The remaining unamortized deferred asset will be amortized over the remaining life of the line of credit arrangement. |
Deferred Revenue
Deferred Revenue | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Revenue [Abstract] | |
Deferred Revenue | In December 2018, the Company entered into a supply agreement with Nestec Ltd. (“Nestlé”), pursuant to which Nestlé is the exclusive customer for NIAGEN® for human use in the (i) medical nutritional and (ii) functional food and beverage categories in certain territories. As consideration for the rights granted to Nestlé, the Company received an upfront fee of $4.0 million in January 2019. The Company determined that the $4.0 million upfront fee is treated as advance payment for future goods or services and to utilize the output method to recognize the upfront fee as revenue as the product is delivered to Nestlé. In utilizing the output method, the Company estimated total delivery volume to Nestlé over the course of the supply agreement. Revenue recognized from deferred revenue was as follows: Year ending At At (In thousands) Dec. 31, 2019 Dec. 31, 2018 Dec. 31, 2019 Dec. 31, 2018 Revenue recognized from deferred revenue $ 127 $ - Deferred Revenue Balance $ 3,873 $ - |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | At December 31, 2019 and December 31, 2018, the Company maintained a full valuation allowance against the entire deferred income tax balance which resulted in an effective tax rates of 0% for both years 2019 and 2018. At December 31, 2019 and December 31, 2018, we recorded a valuation allowance of $30.3 million and $21.9 million, respectively. The valuation allowance increased by $8.4 million during 2019. A reconciliation of 2019 2018 Federal income tax expense at statutory rate (21.0 )% (21.0 )% State income tax, net of federal benefit (6.4 )% (6.6 )% Permanent differences 1.1 % 1.1 % Changes of state net operating losses 0.3 % (0.5 )% Change in stock options and restricted stock (0.2 )% 0.0 % Change in valuation allowance 26.2 % 27.1 % Other 0.0 % (0.1 )% Effective tax rate 0.0 % 0.0 % The deferred income (In thousands) 2019 2018 Deferred tax assets: Net operating loss carryforward $ 24,233 $ 17,957 Stock options and restricted stock 3,988 2,654 Interest expense 278 - Inventory reserve 353 222 Allowance for doubtful accounts 758 168 Accrued expenses 689 831 Deferred revenue - 19 Leasehold improvements and equipment 14 4 Intangibles 66 46 Operating leases 152 168 30,531 22,069 Less valuation allowance (30,313 ) (21,932 ) 218 137 Deferred tax liabilities: Prepaid expenses (218 ) (137 ) (218 ) (137 ) $ - $ - As of December 31, 2019, the Company has tax net operating loss carryforwards for federal and state income tax purposes of approximately $91.4 million and $79.4 million, respectively which begin to expire in the year ending December 31, 2023 and 2022, respectively. The federal net operating loss carryforward of $51.4 million from 2019 and 2018 can be carried forward indefinitely but is limited to 80% of taxable income. Under the Internal Revenue Code of 1986, as amended (the “Code”), certain ownership changes may subject the Company to annual limitations on the utilization of its net operating loss carryforwards. The Company has determined that the stock issued in the year of 2019 did not create a change in control under the Section 382 of the Code. The Company will continue to analyze the potential impact of any additional transactions undertaken upon the utilization of the net operating losses on a go forward basis. The Tax Cuts and Jobs Act created new Section 951A, which set forth a new set of tax rules affecting U.S. shareholders of controlled foreign corporations (“CFCs”). Section 951A defined a new category of income, global intangible low-taxed income (“GILTI”), which must be included on the U.S. shareholder’s tax return as it is earned, regardless of when it is distributed (similar to subpart F income). This provision is effective for CFC tax years beginning after December 31, 2017. The Company has prepared the GILTI calculation for 2019 an there is no U.S. tax on GILTI for 2019 due to a loss. The Company is currently not under examination by the Internal Revenue Service or any other jurisdictions for any tax years for income taxes. The Company has not identified any material uncertain tax positions requiring a reserve as of December 31, 2019 and December 31, 2018. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Sale of consumer products Net sales Year ended Dec. 31, 2019 Net sales Year ended Dec. 31, 2018 Trade receivable at Dec. 31, 2019 Trade receivable at Dec. 31, 2018 A.S. Watson Group $7.3 million $2.9 million $0.8 million $0.7 million Horizon Ventures - $0.4 million - - Total $7.3 million $3.3 million $0.8 million $0.7 million *A.S. Watson Group and Horizon Ventures are related parties through common ownership of an enterprise that beneficially owns more than 10% of the common stock of the Company. |
Contract Assets and Contract Li
Contract Assets and Contract Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Contract with Customer, Asset and Liability [Abstract] | |
Contract Assets and Contract Liabilities | Our contract assets consist of unbilled amounts typically resulting from sales under contracts when the cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. Our contract liabilities consist of advance payments and billings in excess of costs incurred and deferred revenue. Net contract assets (liabilities) consisted of the following: (In thousands) Dec. 31, 2018 Reductions (1) Additions (2) Transferred (3) Dec. 31, 2019 Contract Assets $ 56 $ (301 ) $ 331 $ (86 ) $ - Contract Liabilities - Open Projects (4) 101 (218 ) 272 (155 ) - Contract Liabilities - Other Customer Deposits (5) 174 (131 ) 126 - 169 Net Contract Assets (Liabilities) $ (219 ) $ 48 $ (67 ) $ 69 $ (169 ) (1) For contract assets, the amount represents amount billed to the customer. For contract liabilities, the amount represents reductions for revenue recognized. (2) For contract assets, the amount represents revenue recognized during the period using the cost-to-cost method. For contract liabilities, the amount represents advance payments received during the period. (3) Effective November 1, 2019, the Company completed a spinoff of a regulatory consulting business unit, Spherix Consulting Group, Inc. ("Spherix"). The Company assigned to Spherix all existing consulting contracts and transferred related contract assets and liabilities. (4) Contract liabilities from ongoing consulting projects. (5) Other customer deposits include payments received for orders not fulfilled and other advance payments. For the years ended December 31, 2019 and December 31, 2018, we recognized revenues of approximately $143,000 and $95,000 related to our adjusted contract liabilities at the beginning of the fiscal year 2019 and 2018, respectively. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Stock Option Plans At the discretion of the Company’s On June 20, 2017, the stockholders of the Company approved the ChromaDex Corporation 2017 Equity Incentive Plan (the "2017 Plan"). The Company's Board of Directors amended the 2017 Plan in January 2018 and the stockholders of the Company approved an amendment to the 2017 plan on June 22, 2018. The 2017 Plan is the successor to the ChromaDex Corporation Second Amended and Restated 2007 Equity Incentive Plan (the "2007 Plan"). As of December 31, 2019, under the 2017 Plan, the Company is authorized to issue stock options that total no more than the sum of (i) 9,000,000 new shares, (ii) approximately 384,000 unallocated shares remaining available for the grant of new awards under the 2007 Plan, (iii) any returning shares from the 2007 Plan or the 2017 Plan, such as forfeited, cancelled, or expired shares and (iv) 500,000 shares pursuant to an inducement award. The remaining number of shares available for issuance under the 2017 Plan totaled approximately 2.9 million shares at December 31, 2019. General Vesting Conditions The stock option awards generally vest ratably over a three to four-year period following grant date after a passage of time. However, some stock option awards are market or performance based and vest based on certain triggering events established by the Compensation Committee, subject to approval by the Board of Directors. The fair value of the Company’s stock options that are not market or performance based was estimated at the date of grant using the Black-Scholes based option valuation model. The table below outlines the weighted average assumptions for options granted during the years ended December 31, 2019 and December 31, 2018. Year Ended December 2019 2018 Expected term 6 years 6 years Volatility 67 % 69 % Dividend Yield 0 % 0 % Risk-free rate 2 % 3 % 1) Service Period Based Stock Options The majority of options granted by the Company are The following table Weighted Average Remaining Aggregate Number of Exercise Contractual Fair Intrinsic Shares Price Term Value Value Outstanding at December 30, 2017 5,467 $ 3.49 6.41 $ 13,101 Options Granted 3,071 4.29 10.00 $ 2.74 Options Exercised (131 ) 4.02 $ 109 Options Expired (245 ) 4.50 Options Forfeited (139 ) 4.21 Outstanding at December 31, 2018 8,023 $ 3.75 7.11 $ 2,207 Options Granted 2,603 4.03 10.00 $ 2.46 Options Exercised (402 ) 2.54 $ 389 Options Expired (3 ) 4.50 Options Forfeited (712 ) 3.89 Outstanding at December 31, 2019 9,509 $ 3.86 6.90 $ 6,315 * Exercisable at December 31, 2019 5,822 $ 3.75 5.60 $ 4,725 * *The aggregate 2) Performance Based Stock Options The Company also grants stock option awards that are performance based and vest based on the achievement of certain criteria established from time to time by the Compensation Committee. If these performance criteria are not met, the compensation expenses are not recognized and the expenses that have been recognized will be reversed. The following table summarizes performance based stock options activity (in thousands except per share data and remaining contractual term): Weighted Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value Outstanding at December 30, 2017 67 $ 1.89 5.08 Options Granted - - Options Exercised - - Options Forfeited - - Outstanding at December 31, 2018 67 $ 1.89 4.08 Options Granted - - Options Exercised (25 ) 1 .89 $ 69 Options Forfeited - - Outstanding at December 31, 2019 42 $ 1.89 3.08 $ 101 Exercisable at December 31, 2019 42 $ 1.89 3.08 $ 101 The aggregate intrinsic value in the table above are, based on the Company’s closing stock price of $4.31 on the last day of business for the period ended December 31, 2019. 3) Market Based Stock Options The Company also grants stock option awards that are market based which have vesting conditions associated with a service condition as well as performance of the Company's stock price. The following table summarizes market based stock options activity (in thousands except per share data and remaining contractual term): Weighted Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value Outstanding at December 30, 2017 1,000 $ 4.24 9.76 Options Granted - - Options Exercised - - Options Forfeited - - Outstanding at December 31, 2018 1,000 $ 4.24 8.76 Options Granted - - Options Exercised - - Options Forfeited - - Outstanding at December 31, 2019 1,000 $ 4.24 7. 76 $ 70 Exercisable at December 31, 2019 722 $ 4.24 7.76 $ 51 The aggregate intrinsic value in the table above are, based on the Company’s closing stock price of $4.31 on the last day of business for the period ended December 31, 2019. Total Remaining Unamortized Compensation for Stock Options As of December 31, 2019, there was approximately $8.2 million of total unrecognized compensation expense related to non-vested share-based compensation arrangements granted under the plans for stock options. That cost is expected to be recognized over a weighted average period of 1.7 years. Restricted Stock Awards Restricted stock awards granted by the Company to employees have vesting conditions that are unique to each award. The following table summarizes activity of Weighted Average Shares Fair Value Unvested shares at December 30, 2017 185 $ 3.28 Granted - - Vested (2 ) 5.28 Forfeited - - Unvested shares at December 31, 2018 183 $ 3.25 Granted - - Vested - - Forfeited - - Unvested shares at December 31, 2019 183 $ 3.25 Expected to Vest as of December 31, 2019 183 $ 3.25 Performance Stock Awards During the fiscal year 2019 and 2018, the Compensation Committee approved grants of 166,666 shares and 333,334 shares, respectively, of fully-vested restricted stock to Robert Fried, the Company’s Chief Executive Officer. The shares were granted pursuant to his employment agreement, which provided for the stock grants upon the achievement of certain performance goals. The expense recognized for the fiscal year 2019 and 2018 for the awarded shares were approximately $0.7 million and $1.3 million, respectively. Share-based Compensation Share-based compensation expenses for the years ended December 31, 2019 and December 31, 2018 were as follows: Year ending (In thousands) Dec. 31, 2019 Dec. 31, 2018 Share-based compensation expense Cost of sales $ 107 $ 85 Sales and marketing 731 346 Research and development 529 353 General and administrative 5,805 5,587 Total $ 7,172 $ 6,371 |
Stock Issuance and Conversion o
Stock Issuance and Conversion of Convertible Notes | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stock Issuance and Conversion of Convertible Notes | Stock Issuance On August 13, 2019, the Company entered into a Securities Purchase Agreement with certain purchasers, pursuant to which the Company agreed to sell and issue an aggregate of $7.0 million of the Company’s common stock at a purchase price of $4.465 per share (the “Financing”). On August 15, 2019, the Company closed the Financing and issued approximately 1.6 million shares of its Common Stock. The Company received proceeds of $6.8 million, net of offering costs. Conversion of Convertible Notes On May 17, 2019, the Company closed a financing transaction and issued convertible promissory notes (the “Notes”) in the aggregate principal amount of $10.0 million to Winsave Resources Limited and Pioneer Step Holdings Limited. The maturity date of the Notes was originally July 1, 2019 and was subsequently extended to August 15, 2019. The Notes accrued interest at a rate of 5.0% per annum for a total of approximately $123,000 through the maturity date. On the maturity date, the Notes automatically converted into approximately 2.3 million shares of the Company’s common stock at a price of $4.465 per share. Summary of Convertible Notes Description Modified Original Extended Original Amount Principal $ 4.465 $ 4.590 August 15, 2019 July 1, 2019 $ 10,000 Interest at a rate of 5.0% per annum 123 Total Amount Converted for 2.3 million shares $ 10,123 Debt Discount - Issuance costs 565 Debt Discount - Down round feature 282 Total Debt Discount recognized as Interest Expense $ 847 * The conversion price has a down round feature. The original conversion price of $4.59 was lowered to $4.465 due to the Financing. Debt Issuance Costs In connection with the issuance of the Notes, the Company incurred issuance costs of approximately $565,000. The issuance costs were recorded as a debt discount and were amortized as interest expense using the effective interest method over the original term of 45 days. Down Round Feature The Notes had adjustments which meet the definition of a down round feature per ASU 2017-11. Pursuant to the terms of the Notes, the conversion price per share was adjusted downward from $4.59 to $4.465 as the Company closed the Financing on the Maturity Date. As allowed under ASU 2017-11, the Company excluded such down round feature when determining whether the instrument is indexed to the entity’s own stock and did not bifurcate the down round feature from the loan host. In accordance with ASU 2017-11, the Company recognized the value of the triggered down round as a beneficial conversion discount to earnings. The Note purchasers obtained approximately additional 62,000 shares of the Company’s common stock due to the down round feature with an incremental intrinsic value of approximately $282,000. This amount was initially recognized as debt discount and was amortized as interest expense. Along with the issuance cost of the Notes, the Company recorded a total of approximately $0.8 million as interest expense in amortization of debt discounts during the year ended December 31, 2019. Debt Modification On June 30, 2019, the Company and the Purchasers entered into an Omnibus Amendment to the Purchase Agreement and the Notes to (i) remove the restriction on the Company issuing common stock during the a certain restricted period and (ii) amend the Notes to extend the maturity date by 45 days from July 1, 2019 to August 15, 2019. The amendment to extend the maturity date for another 45 days to August 15, 2019 was recognized as a modification of the Notes. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2019 | |
FairValueAssumptionsRiskFreeInterestRateStockIssuance | |
Warrants | The following table summarizes activity of warrants at December 31, 2019 and December 31, 2018 and changes during the years then ended (in thousands except per share data and remaining contractual term): Weighted Average Remaining Number of Exercise Contractual Shares Price Term Outstanding and exercisable at December 30, 2017 470 $ 4.15 2.17 Warrants Issued - - Warrants Exercised - - Warrants Expired (266 ) 4.50 Outstanding and exercisable at December 31, 2018 204 3.69 0.57 Warrants Issued - - Warrants Exercised (140 ) 3.19 Warrants Expired (64 ) 4.80 Outstanding and exercisable at December 31, 2019 - $ - - |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Purchase obligations The Company enters into purchase obligations with various vendors for goods and services that we need for our operations. The purchase obligations for goods and services include inventory, research and development, and laboratory supplies. Minimum future payments under purchase obligations as of December 31, 2019 are as follows: (In thousands) Fiscal year ending: 2020 $ 11,520 $ 11,520 Royalty The Company has nine licensing agreements with leading research universities and other patent holders, pursuant to which the Company acquired patents related to certain products the Company offers to its customers. These agreements afford for royalty payments based on contractual minimums and expire at various dates from December 31, 2019 through an estimated year of 2037. Yearly minimum royalty payments including license maintenance fees range from $10,000 per year to $100,000 per year, however, these minimum payments escalate each year with a maximum of $150,000 per year. In addition, the Company is required to pay a range of 2% to 5% of sales related to the licensed products under these agreements. Total royalty expenses including license maintenance fees for the years ended December 31, 2019 and December 31, 2018 were approximately $2.7 million and $1.7 million, respectively under these agreements. Minimum royalties including license maintenance fees for the next five years are as follows: (In thousands) Fiscal years ending: 2020 $ 342 2021 360 2022 361 2023 363 2024 364 $ 1,790 Operating lease guarantee Effective November 1, 2019, the Company completed a spinoff of a regulatory consulting business unit, Spherix Consulting Group, Inc. (“Spherix”). As part of the spinoff transaction, the Company’s existing lease in Maryland was assigned from the Company to Spherix, whom assumed all rights, title, obligations, and interests in the lease. The Company remained a guarantor on the lease. The term on the lease expires in April 2021. Future minimum lease payments are approximately $46,000 in 2020 and $16,000 in 2021. If Spherix becomes insolvent, the Company may be obligated to pay these amounts. Based on the financial health of Spherix as of the transaction date, the Company does not believe it is probable it will have to make any performance on this guarantee. Legal proceedings - Elysium Health, LLC (A) California Action On December 29, 2016, ChromaDex, Inc. filed a complaint in the United States District Court for the Central District of California, naming Elysium Health, Inc. (together with Elysium Health, LLC, “Elysium”) as defendant (the “Complaint”). On January 25, 2017, Elysium filed an answer and counterclaims in response to the Complaint (together with the Complaint, the “California Action”). Over the course of the California Action, the parties have each filed amended pleadings several times and have each engaged in several rounds of motions to dismiss and one round of motion for judgment on the pleadings with respect to various claims. Most recently, on November 27, 2018, ChromaDex, Inc. filed a fifth amended complaint that added an individual, Mark Morris, as a defendant. Elysium and Morris (“the Defendants”) moved to dismiss on December 21, 2018. The court denied Defendants’ motion on February 4, 2019. Defendants filed their answer to ChromaDex, Inc.'s fifth amended complaint on February 19, 2019. ChromaDex, Inc. filed an answer to Elysium’s restated counterclaims on March 5, 2019. Discovery closed on August 9, 2019. On August 16, 2019, the parties filed motions for partial summary judgment as to certain claims and counterclaims. The parties filed opposition briefs on August 28, 2019, and reply briefs on September 4, 2019. On October 9, 2019, among other things, the court vacated the previously scheduled trial date, ordered supplemental briefing with respect to certain issues related to summary judgment. Elysium filed its opening supplemental brief on October 30, 2019, ChromaDex filed its opening supplemental brief on November 18, 2019, and Elysium filed a reply brief on November 27, 2019, and the court heard argument on January 13, 2020. On January 16, 2020, the court granted both parties’ motions for summary judgment in part and denied both in part. On ChromaDex’s motion, the court granted summary judgment in favor of ChromaDex on Elysium’s counterclaims for (i) breach of contract related to manufacturing NIAGEN® according to the defined standard, selling NIAGEN and ingredients that are substantially similar to pterostilbene to other customers, distributing the NIAGEN® product specifications, and failing to provide information concerning the quality and identity of NIAGEN®, and (ii) breach of the implied covenant of good faith and fair dealing. The court denied summary judgment on Elysium’s counterclaims for (i) fraudulent inducement of the Trademark License and Royalty Agreement, dated February 3, 2014, by and between ChromaDex, Inc. and Elysium (the “License Agreement”), (ii) patent misuse, and (iii) unjust enrichment. On Elysium’s motion, the court granted summary judgment in favor of Elysium on ChromaDex’s claim for damages related to $110,000 in avoided costs arising from documents that Elysium used in violation of the Supply Agreement, dated February 3, 2014, by and between ChromaDex, Inc. and Elysium, as amended (the “NIAGEN® Supply Agreement”). The court denied summary judgment on Elysium’s counterclaim for breach of contract related to certain refunds or credits to Elysium. The court also denied summary judgment on ChromaDex’s breach of contract claim against Morris and claims for disgorgement of $8.3 million in Elysium’s resale profits, $600,000 for a price discount received by Elysium, and $684,781 in Morris’s compensation. Following the court’s January 16, 2020 order, the claims that ChromaDex, Inc. presently asserts in the California Action, among other allegations, are that (i) Elysium breached the Supply Agreement, dated June 26, 2014, by and between ChromaDex, Inc. and Elysium (the “pTeroPure® Supply Agreement”), by failing to make payments to ChromaDex, Inc. for purchases of pTeroPure® and by improper disclosure of confidential ChromaDex, Inc. information pursuant to the pTeroPure® Supply Agreement, (ii) Elysium breached the NIAGEN® Supply Agreement, by failing to make payments to ChromaDex, Inc. for purchases of NIAGEN®, (iii) Defendants willfully and maliciously misappropriated ChromaDex, Inc. trade secrets concerning its ingredient sales business under both the California Uniform Trade Secrets Act and the Federal Defend Trade Secrets Act, (iv) Morris breached two confidentiality agreements he signed by improperly stealing confidential ChromaDex, Inc. documents and information, (v) Morris breached his fiduciary duty to ChromaDex, Inc. by lying to and competing with ChromaDex, Inc. while still employed there, and (vi) Elysium aided and abetted Morris’s breach of fiduciary duty. ChromaDex, Inc. is seeking damages and interest for Elysium’s alleged breaches of the NIAGEN® Supply Agreement and pTeroPure® Supply Agreement and Morris’s alleged breaches of his confidentiality agreements, compensatory damages and interest, punitive damages, injunctive relief, and attorney’s fees for Defendants’ alleged willful and malicious misappropriation of ChromaDex, Inc.’s trade secrets, and compensatory damages and interest, disgorgement of all benefits received, and punitive damages for Morris’s alleged breach of his fiduciary duty and Elysium’s aiding and abetting of that alleged breach. The claims that Elysium presently alleges in the California Action are that (i) ChromaDex, Inc. breached the NIAGEN® Supply Agreement by not issuing certain refunds or credits to Elysium, (ii) ChromaDex, Inc. fraudulently induced Elysium into entering into the License Agreement, (iv) ChromaDex, Inc.’s conduct constitutes misuse of its patent rights, and (v) ChromaDex, Inc. was unjustly enriched by the royalties Elysium paid pursuant to the License Agreement. Elysium is seeking damages for ChromaDex, Inc.’s alleged breaches of the NIAGEN® Supply Agreement, and compensatory damages, punitive damages, and/or rescission of the License Agreement and restitution of any royalty payments conveyed by Elysium pursuant to the License Agreement, and a declaratory judgment that ChromaDex, Inc. has engaged in patent misuse. On January 17, 2020, Elysium moved to substitute its counsel. The same day, the court ordered hearing on that motion for January 21, 2020, and granted Elysium’s motion at the hearing. On January 23, 2020, the court issued a scheduling order that, among other things, set trial on the remaining claims to begin on May 12, 2020. (B) Patent Office Proceedings On July 17, 2017, Elysium filed petitions with the U.S. Patent and Trademark Office for inter partes inter partes inter partes inter partes inter partes (C) Southern District of New York Action On September 27, 2017, Elysium Health Inc. ("Elysium Health") filed a complaint in the United States District Court for the Southern District of New York, against ChromaDex, Inc. (the “Elysium SDNY Complaint”). Elysium Health alleges in the Elysium SDNY Complaint that ChromaDex, Inc. made false and misleading statements in a citizen petition to the Food and Drug Administration it filed on or about August 18, 2017. Among other allegations, Elysium Health avers that the citizen petition made Elysium Health’s product appear dangerous, while casting ChromaDex, Inc.’s own product as safe. The Elysium SDNY Complaint asserts four claims for relief: (i) false advertising under the Lanham Act, 15 U.S.C. § 1125(a); (ii) trade libel; (iii) deceptive business practices under New York General Business Law § 349; and (iv) tortious interference with prospective economic relations. ChromaDex, Inc. denies the claims in the Elysium SDNY Complaint and intends to defend against them vigorously. On October 26, 2017, ChromaDex, Inc. moved to dismiss the Elysium SDNY Complaint on the grounds that, inter alia, its statements in the citizen petition are immune from liability under the Noerr-Pennington Doctrine, the litigation privilege, and New York’s Anti-SLAPP statute, and that the Elysium SDNY Complaint failed to state a claim. Elysium Health opposed the motion on November 2, 2017. ChromaDex, Inc. filed its reply on November 9, 2017. On October 26, 2017, ChromaDex, Inc. filed a complaint in the United States District Court for the Southern District of New York against Elysium Health (the “ChromaDex SDNY Complaint”). ChromaDex, Inc. alleges that Elysium Health made material false and misleading statements to consumers in the promotion, marketing, and sale of its health supplement product, Basis, and asserts five claims for relief: (i) false advertising under the Lanham Act, 15 U.S.C. §1125(a); (ii) unfair competition under 15 U.S.C. § 1125(a); (iii) deceptive practices under New York General Business Law § 349; (iv) deceptive practices under New York General Business Law § 350; and (v) tortious interference with prospective economic advantage. On November 16, 2017, Elysium Health moved to dismiss for failure to state a claim. ChromaDex, Inc. opposed the motion on November 30, 2017 and Elysium Health filed a reply on December 7, 2017. On November 3, 2017, the Court consolidated the Elysium SDNY Complaint and the ChromaDex SDNY Complaint actions under the caption In re Elysium Health-ChromaDex Litigation, 17-cv-7394, and stayed discovery in the consolidated action pending a Court-ordered mediation. The mediation was unsuccessful. On September 27, 2018, the Court issued a combined ruling on both parties’ motions to dismiss. For ChromaDex’s motion to dismiss, the Court converted the part of the motion on the issue of whether the citizen petition is immune under the Noerr-Pennington Doctrine into a motion for summary judgment, and requested supplemental evidence from both parties, which were submitted on October 29, 2018. The Court otherwise denied the motion to dismiss. On January 3, 2019, the Court granted ChromaDex, Inc.’s motion for summary judgment under the Noerr-Pennington Doctrine and dismissed all claims in the Elysium SDNY Complaint. Elysium moved for reconsideration on January 17, 2019. The Court denied Elysium’s motion for reconsideration on February 6, 2019, and issued an amended final order granting ChromaDex, Inc.’s motion for summary judgment as on February 7, 2019. The Court granted in part and denied in part Elysium’s motion to dismiss, sustaining three grounds for ChromaDex’s Lanham Act claims while dismissing two others, sustaining the claim under New York General Business Law § 349, and dismissing the claims under New York General Business Law § 350 and for tortious interference. Elysium filed an answer and counterclaims on October 10, 2018, alleging claims for (i) false advertising under the Lanham Act, 15 U.S.C. §1125(a); (ii) unfair competition under 15 U.S.C. § 1125(a); and (iii) deceptive practices under New York General Business Law § 349. ChromaDex answered Elysium’s counterclaims on November 2, 2018. ChromaDex, Inc. filed an amended complaint on March 27, 2019, adding new claims against Elysium Health for false advertising and unfair competition under the Lanham Act, 15 U.S.C. § 1125(a). On April 10, 2019, Elysium Health answered the amended complaint and filed amended counterclaims, also adding new claims against ChromaDex, Inc. for false advertising and unfair competition under the Lanham Act, 15 U.S.C. § 1125(a). On July 1, 2019, Elysium Health filed further amended counterclaims, adding new claims under the Copyright Act §§ 106 & 501. On February 9, 2020, ChromaDex, Inc. filed a motion for leave to amend its complaint to add additional claims against Elysium Health for false advertising and unfair competition. On February 10, 2020, Elysium Health filed a motion for leave to amend its counterclaims to identify allegedly false and misleading statements in ChromaDex’s advertising. Those motions remain pending and the parties are currently in discovery. The Company is unable to predict the outcome of these matters and, at this time, cannot reasonably estimate the possible loss or range of loss with respect to the legal proceedings discussed herein. As of December 31, 2019, ChromaDex, Inc. did not accrue a potential loss for the California Action or the Elysium SDNY Complaint because ChromaDex, Inc. believes that the allegations are without merit and thus it is not probable that a liability has been incurred. (D) Delaware – Patent Infringement Action On September 17, 2018, ChromaDex, Inc. and Trustees of Dartmouth College filed a patent infringement complaint in the United States District Court for the District of Delaware against Elysium Health, Inc. The complaint alleges that Elysium’s BASIS® dietary supplement violates U.S. Patents 8,197,807 (the “’807 Patent”) and 8,383,086 (the “’086 Patent”) that comprise compositions containing isolated nicotinamide riboside held by Dartmouth and licensed exclusively to ChromaDex, Inc. On October 23, 2018, Elysium filed an answer to the complaint. The answer asserts various affirmative defenses and denies that Plaintiffs are entitled to any relief. On November 7, 2018, Elysium filed a motion to stay the patent infringement proceedings pending resolution of (1) the inter partes inter partes On November 1, 2019, ChromaDex, Inc. filed a motion to lift the stay due to changed circumstances in the California Action, among other reasons. Briefing on the motion was completed on November 22, 2019. On January 6, 2020, the Delaware court issued an oral order instructing the parties to submit a joint status report after the January 13, 2020 motions hearing in the California Action. The joint status report was submitted on January 30, 2020. On February 4, 2020, the Delaware court issued an order granting ChromaDex, Inc.’s motion to lift the stay and setting a scheduling conference for March 10, 2020. Legal proceedings – Utah Lanham Act Action On March 6, 2019, Novex Biotech LLC (“Novex”) filed an action in the Third Judicial District Court County of Salt Lake, State of Utah against ChromaDex, Inc. and 10 fictional defendants. The complaint alleges that Novex markets a dietary supplement, Oxydrene Elite, that competes with ChromaDex’s product, TRU NIAGEN. The complaint further alleges that ChromaDex, Inc. has violated the Lanham Act by making false or misleading claims for TRU NIAGEN. Novex is seeking an injunction and damages for the competitive harm it alleges to have suffered. ChromaDex, Inc. timely removed the action to federal court in the District of Utah. ChromaDex answered the complaint and also filed counterclaims against Novex under the Lanham Act and California state law. ChromaDex’s counterclaims allege that Novex has falsely advertised its product called Oxydrene. Novex moved to dismiss the counterclaims and ChromaDex has opposed this motion. Discovery in the case is ongoing and no hearing has been set for Novex’s motion to dismiss. The Company is unable to predict the outcome of this matter and, at this time, cannot reasonably estimate the possible loss or range of loss with respect to the legal proceedings discussed herein. As of December 31, 2019, ChromaDex, Inc. did not accrue a potential loss for the Utah Lanham Act action because ChromaDex, Inc. believes that the allegations are without merit and thus it is not probable that a liability has been incurred. From time to time we are involved in legal proceedings arising in the ordinary course of our business. We believe that there is no other litigation pending that is likely to have, individually or in the aggregate, a material adverse effect on our financial condition or results of operations. |
Business Segmentation and Geogr
Business Segmentation and Geographical Distribution | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Business Segmentation and Geographical Distribution | The Company has the following three reportable segments for the years ended December 31, 2019 and December 31, 2018: ● Consumer products segment: provides finished dietary supplement products that contain the Company's proprietary ingredients directly to consumers as well as to distributors. ● Ingredients segment: develops and commercializes proprietary-based ingredient technologies and supplies these ingredients as raw materials to the manufacturers of consumer products in various industries including the nutritional supplement, food, beverage and animal health industries. ● Analytical reference standards and services segment: includes (i) supply of phytochemical reference standards, (ii) scientific and regulatory consulting and (iii) other research and development services. Effective November 1, 2019, the Company completed a spinoff of Spherix, a regulatory consulting business unit. The net sales generated by Spherix for the years ended December 31, 2019 and December 31, 2018 were approximately $694,000 and $597,000, respectively. The “Corporate and other” classification includes corporate items not allocated by the Company to each reportable segment. Further, there are no intersegment sales that require elimination. The Company evaluates performance and allocates resources based on reviewing gross margin by reportable segment. The discontinued operations are not included in following statement of operations for business segments. Year ended Consumer Analytical Reference December 31, 2019 Products Ingredients Standards and Corporate (In thousands) segment segment Services segment and other Total Net sales $ 36,075 $ 6,196 $ 4,020 $ - $ 46,291 Cost of sales 14,550 2,980 2,992 - 20,522 Gross profit 21,525 3,216 1,028 - 25,769 Operating expenses: Sales and marketing 17,343 245 628 - 18,216 Research and development 3,699 721 - - 4,420 General and administrative - - - 34,308 34,308 Other - - - 125 125 Operating expenses 21,042 966 628 34,433 57,069 Operating income (loss) $ 483 $ 2,250 $ 400 $ (34,433 ) $ (31,300 ) Year ended Consumer Analytical Reference December 31, 2018 Products Ingredients Standards and Corporate (In thousands) segment segment Services segment and other Total Net sales $ 18,451 $ 8,565 $ 4,541 $ - $ 31,557 Cost of sales 7,222 4,831 3,449 - 15,502 Gross profit 11,229 3,734 1,092 - 16,055 Operating expenses: Sales and marketing 15,063 727 747 - 16,537 Research and development 3,852 1,626 - - 5,478 General and administrative - - - 27,137 27,137 Other - - - 75 75 Operating expenses 18,915 2,353 747 27,212 49,227 Operating income (loss) $ (7,686 ) $ 1,381 $ 345 $ (27,212 ) $ (33,172 ) Consumer Analytical Reference At December 31, 2019 Products Ingredients Standards and Corporate (In thousands) segment segment Services segment and other Total Total assets $ 12,137 $ 2,135 $ 918 $ 25,057 $ 40,247 Consumer Analytical Reference At December 31, 2018 Products Ingredients Standards and Corporate (In thousands) segment segment Services segment and other Total Total assets $ 7,407 $ 5,412 $ 1,213 $ 28,200 $ 42,232 Disaggregation of revenue We disaggregate our revenue from contracts with customers by type of goods or services for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. See details in the tables below. Year Ended December 31, 2019 (In thousands) Consumer Products Segment Ingredients Segment Analytical Reference Standards and Services Segment Total TRU NIAGEN®, Consumer Product $ 36,075 $ - $ - $ 36,075 NIAGEN® Ingredient - 4,879 - 4,879 Subtotal NIAGEN Related $ 36,075 $ 4,879 $ - $ 40,954 Other Ingredients - 1,317 - 1,317 Reference Standards - - 3,064 3,064 Consulting and Other - - 956 956 Subtotal Other Goods and Services $ - $ 1,317 $ 4,020 $ 5,337 Total Net Sales $ 36,075 $ 6,196 $ 4,020 $ 46,291 Year Ended December 31, 2018 (In thousands) Consumer Products Segment Ingredients Segment Analytical Reference Standards and Services Segment Total TRU NIAGEN®, Consumer Product $ 18,451 $ - $ - $ 18,451 NIAGEN® Ingredient - 5,169 - 5,169 Subtotal NIAGEN Related $ 18,451 $ 5,169 $ - $ 23,620 Other Ingredients - 3,396 - 3,396 Reference Standards - - 3,455 3,455 Consulting and Other - - 1,086 1,086 Subtotal Other Goods and Services $ - $ 3,396 $ 4,541 $ 7,937 Total Net Sales $ 18,451 $ 8,565 $ 4,541 $ 31,557 Revenues from international sources Revenues from International Sources Year ended Dec. 31, 2019 Year ended Dec. 31, 2018 Consumer Products Segment $10.8 million $4.2 million Ingredients Segment $0.6 million $0.6 million Analytical Reference Standards and Services Segment $1.8 million $1.7 million Total $13.2 million $6.5 million *International sources include Europe, North America, South America, Asia and Oceania. Long-lived assets The Company’s long-lived assets are located within the United States. Disclosure of major customers Major customers who accounted for more than 10% of the Company’s total sales were as follows: Years Ended Major Customers 2019 2018 A.S. Watson Group - Related Party 15.8 % * Life Extension * 10.0 % * Represents less than 10%. Major customers who accounted for more than 10% of the Company’s total trade receivables were as follows: Percentage of the Company's Total Trade Receivables Major Customers At December 31, 2019 At December 31, 2018 A.S. Watson Group - Related Party 39.0 % 15.9 % Life Extension 27.4 % * Elysium Health (1) * 51.2 % * Represents less than 10%. (1) There is ongoing litigation with Elysium Health. Disclosure of major vendors Major vendors who accounted for more than 10% of the Company's total accounts payable were as follows: Percentage of the Company's Total Accounts Payable Major Vendors At December 31, 2019 At December 31, 2018 Vendor A 43.1 % 36.8 % Vendor E * 13.2 % * Represents less than 10%. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent to the year ended December 31, 2019, the Company entered into a separation agreement with Lisa Bratkovich, the Company’s former Chief Marketing Officer. Pursuant to the terms of the agreement, Ms. Bratkovich will receive (a) continuation of her base salary for 12 months for a total of approximately $350,000, (b) accelerated vesting of approximately 94,000 stock options that would have otherwise become vested by the one-year anniversary of the termination date and a period of three years after the termination date to exercise any vested stock options and (c) payment of COBRA group health insurance premiums for up to 12 months. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation: |
Adopted accounting standards in fiscal 2019 | Adopted Accounting Standards in Fiscal 2019 Effective the first day of fiscal year 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. The Company adopted ASU 2016-02 applying the modified retrospective approach. For leases with a term of 12 months or less, the Company made an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The Company’s leased assets and corresponding liabilities exclude non-lease components. Within the opening balances for the fiscal year beginning January 1, 2019, the Company recognized right of use assets of approximately $1.5 million and corresponding operating lease obligations liabilities of approximately $2.1 million which includes approximately $0.6 million deferred rent liability the Company previously recognized as of December 31, 2018. The Company determines if an arrangement is a lease at inception and classifies it as finance or operating. Leased assets and corresponding liabilities are recognized based on the present value of the lease payments over the lease term utilizing an estimated borrowing rate for a secured loan with a maturity corresponding to the remaining lease term. Leases primarily consist of real property and laboratory equipment. Effective the first day of fiscal year 2019, the Company adopted ASU No. 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. Among others, Part I of ASU 2017-11 allows companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity’s own stock. As a result, financial instruments (or embedded conversion features) with down round features may no longer be required to be accounted for as derivative liabilities. A company recognizes the value of a down round feature only when it is triggered and the strike price has been adjusted downward. |
Use of accounting estimates | Use of accounting estimates |
Revenue recognition | Revenue recognition The Company accounts for shipping and handling activities performed as cost of sales under a fulfillment cost and any fee received for shipping and handling as part of the transaction price and recognize revenue when control of the good transfers. Shipping and handling fees billed to customers included in net sales for the years ending December 31, 2019 and December 31, 2018 are as follows: (In thousands) 2019 2018 Shipping and handling fees billed $ 360 $ 287 Taxes collected from customers and remitted to governmental authorities are excluded from revenue, which is presented on a net basis in the statement of operations. |
Restricted cash | Restricted cash |
Trade accounts receivable, net | Trade accounts receivable, net (In thousands) 2019 2018 Allowances Related to Elysium Health $ 2,733 $ 500 Other Allowances 31 37 $ 2,764 $ 537 Trade accounts receivable are written off when deemed uncollectible. Recoveries of trade accounts receivable previously written off are recorded when received. |
Credit risk | Credit risk |
Inventories | Inventories Our normal operating cycle for reference standards is currently longer than one year. The Company regularly reviews inventories on hand and reduces the carrying value for slow-moving and obsolete inventory, inventory not meeting quality standards and inventory subject to expiration. The reduction of the carrying value for slow-moving and obsolete inventory is based on current estimates of future product demand, market conditions and related management judgment. Any significant unanticipated changes in future product demand or market conditions that vary from current expectations could have an impact on the value of inventories. |
Intangible assets | Intangible assets |
Leasehold improvements and equipment | Leasehold improvements and equipment, net Long-lived assets are reviewed for impairment on a periodic basis and when changes in circumstances indicate the possibility that the carrying amount may not be recoverable. Long-lived assets are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets. If the forecast of undiscounted future cash flows is less than the carrying amount of the assets, an impairment charge would be recognized to reduce the carrying value of the assets to fair value. If a possible impairment is identified, the asset group’s fair value is measured relying primarily on a discounted cash flow methodology. |
Customer deposits | Customer deposits |
Income taxes | Income taxes The Company has not recorded a reserve for any tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company files tax returns in all appropriate jurisdictions, which include a U.S. federal tax return and various state tax returns. Open tax years for these jurisdictions are 2016 to 2019, which statutes expire in 2020 to 2023, respectively. When and if applicable, potential interest and penalty costs are accrued as incurred, with expenses recognized in general and administrative expenses in the statements of operations. As of December 31, 2019, the Company has no liability for unrecognized tax benefits. |
Research and development costs | Research and development costs: |
Advertising | Advertising: |
Share-based compensation | Share-based compensation Share-based compensation cost is recorded for all option grants and awards of non-vested stock based on the grant date fair value of the award, and is recognized over the service period required for the award. Prior to October 1, 2018, share-based compensation cost for non-employees was remeasured over the vesting term as earned. The fair value of the Company’s stock options is estimated at the date of grant using the Black-Scholes based option valuation model. The volatility assumption is based on the historical volatility of the Company's common stock. The dividend yield assumption is based on the Company’s history and expectation of future dividend payouts on the common stock. The risk-free interest rate is based on the implied yield available on U.S. treasury zero-coupon issues with an equivalent remaining term. For the expected term, the Company uses SEC Staff Accounting Bulletin No. 107 simplified method for “plain vanilla” options with following characteristics: (i) the share options are granted at the market price on the grant date; (ii) exercisability is conditional on performing service through the vesting date on most options; (iii) if an employee terminates service prior to vesting, the employee would forfeit the share options; (iv) if an employee terminates service after vesting, the employee would have 30 to 90 days to exercise the share options; and (v) the share options are nontransferable and nonhedgeable. Market conditions that affect vesting of stock options are considered in the grant-date fair value. The issues surrounding the valuation for such awards can be complex and consideration needs to be given for how the market condition should be incorporated into the valuation of the award. The Company considers using other valuation techniques, such as Monte Carlo simulations based on a lattice approach, to value awards with market conditions. The Company recognizes compensation expense over the requisite service period using the straight-line method for option grants without performance conditions. For stock options that have both service and performance conditions, the Company recognizes compensation expense using the graded attribution method. Compensation expense for stock options with performance conditions is recognized only for those awards expected to vest. The Company recognizes forfeitures when they occur. From time to time, the Company awards shares of its common stock to non-employees for services provided or to be provided. The fair value of the awards are measured either based on the fair market value of stock at the date of grant or the value of the services provided, based on which is more reliably measurable. Since these stock awards are fully vested and non-forfeitable, upon issuance the measurement date for the award is usually reached on the date of the award. |
Fair value measurement | Fair Value Measurement: The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. |
Financial instruments | Financial instruments The carrying amounts reported in the balance sheet for capital lease obligations are present values of the obligations, excluding the interest portion. |
Recent accounting standards | Recent accounting standards |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Shipping and handling fees | (In thousands) 2019 2018 Shipping and handling fees billed $ 360 $ 287 |
Doubtful receivables | (In thousands) 2019 2018 Allowances Related to Elysium Health $ 2,733 $ 500 Other Allowances 31 37 $ 2,764 $ 537 |
Loss Per Share Applicable to _2
Loss Per Share Applicable to Common Stockholders (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings per share | Years Ended (In thousands, except per share data) 2019 2018 Net loss $ (32,147 ) $ (33,316 ) Basic and diluted loss per common share $ (0.56 ) $ (0.61 ) Basic and diluted weighted average common shares outstanding (1): 57,056 55,006 Potentially dilutive securities (2): Stock options 10,551 9,089 Warrants - 204 (1) Includes approximately 0.2 million shares of restricted stock for each of the years 2019 and 2018, which are participating securities that feature voting and dividend rights. (2) Excluded from the computation of loss per share as their impact is antidilutive. |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventory | (In thousands) 2019 2018 Bulk ingredients $ 1,364 $ 2,254 Reference standards 635 751 Consumer Products - Finished Goods 4,877 2,450 Consumer Products - Work in Process 4,659 2,794 $ 11,535 $ 8,249 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets | (In thousands) 2019 2018 Weighted Average Total Amortization Period Healthspan Research LLC Acquisition $ 1,346 $ 1,346 10 years License agreements and other 1,635 1,625 9 years Less accumulated depreciation (1,670 ) (1,424 ) $ 1,311 $ 1,547 |
Estimated aggregate amortization expense | (In thousands) Years ending December: 2020 $ 242 2021 223 2022 186 2023 157 2024 153 Thereafter 350 $ 1,311 |
Leasehold Improvements and Eq_2
Leasehold Improvements and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Leasehold improvements and equipment | (In thousands) 2019 2018 Useful Life Laboratory equipment $ 2,859 $ 2,755 10 years Leasehold improvements 2,320 2,127 Lesser of lease term or estimated useful life Computer equipment 1,104 604 3 to 5 years Furniture and fixtures 201 143 7 to 10 years Construction in progress 71 7 6,555 5,636 Less accumulated depreciation 2,790 2,051 $ 3,765 $ 3,585 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Lease costs | Operating Leases (In thousands) For the Year Ended Dec. 31, 2019 Operating leases Operating lease expense $ 663 Variable lease expense 246 Operating lease expense 909 Short-term lease rent expense 70 Total expense $ 979 Finance Leases For the Year Ended Dec. 31, 2019 For the Year Ended Dec. 31, 2018 (In thousands) Finance leases Amortization of equipment assets $ 83 $ 87 Interest on lease liabilities 33 41 Total expenses $ 116 $ 128 |
Additional lease information | Operating Leases At Dec. 31, 2019 Weighted-average remaining lease term (years) – operating leases 1.9 Weighted-average discount rate – operating leases 8.0 % Finance Leases At Dec. 31, 2019 Weighted-average remaining lease term (years) – finance leases 0.9 Weighted-average discount rate – finance leases 8.9 % |
Minimum future lease payments under operating leases | (In thousands) Year Ending December 31, 2020 $ 690 Year Ending December 31, 2021 614 Year Ending December 31, 2022 138 Year Ending December 31, 2023 143 Year Ending December 31, 2024 25 Total 1,610 Less present value discount 167 Operating lease liabilities 1,443 Less current portion 595 Long-term obligations under operating leases $ 848 |
Minimum future lease payments under finance leases | (In thousands) Year Ending December 31, 2020 $ 272 Year Ending December 31, 2021 18 Total 290 Less present value discount 14 Finance lease liabilities 276 Less current portion 258 Long-term obligations under finance leases $ 18 |
Deferred Revenue (Tables)
Deferred Revenue (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Revenue [Abstract] | |
Deferred revenue | Year ending At At (In thousands) Dec. 31, 2019 Dec. 31, 2018 Dec. 31, 2019 Dec. 31, 2018 Revenue recognized from deferred revenue $ 127 $ - Deferred Revenue Balance $ 3,873 $ - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of income tax expense (benefit) | 2019 2018 Federal income tax expense at statutory rate (21.0 )% (21.0 )% State income tax, net of federal benefit (6.4 )% (6.6 )% Permanent differences 1.1 % 1.1 % Changes of state net operating losses 0.3 % (0.5 )% Change in stock options and restricted stock (0.2 )% 0.0 % Change in valuation allowance 26.2 % 27.1 % Other 0.0 % (0.1 )% Effective tax rate 0.0 % 0.0 % |
Deferred income tax assets and liabilities | (In thousands) 2019 2018 Deferred tax assets: Net operating loss carryforward $ 24,233 $ 17,957 Stock options and restricted stock 3,988 2,654 Interest expense 278 - Inventory reserve 353 222 Allowance for doubtful accounts 758 168 Accrued expenses 689 831 Deferred revenue - 19 Leasehold improvements and equipment 14 4 Intangibles 66 46 Operating leases 152 168 30,531 22,069 Less valuation allowance (30,313 ) (21,932 ) 218 137 Deferred tax liabilities: Prepaid expenses (218 ) (137 ) (218 ) (137 ) $ - $ - |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Net amount of assets and liabilities acquired | Net sales Year ended Dec. 31, 2019 Net sales Year ended Dec. 31, 2018 Trade receivable at Dec. 31, 2019 Trade receivable at Dec. 31, 2018 A.S. Watson Group $7.3 million $2.9 million $0.8 million $0.7 million Horizon Ventures - $0.4 million - - Total $7.3 million $3.3 million $0.8 million $0.7 million *A.S. Watson Group and Horizon Ventures are related parties through common ownership of an enterprise that beneficially owns more than 10% of the common stock of the Company. |
Contract Assets and Contract _2
Contract Assets and Contract Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Contract with Customer, Asset and Liability [Abstract] | |
Net contract assets (liabilities) | (In thousands) Dec. 31, 2018 Reductions (1) Additions (2) Transferred (3) Dec. 31, 2019 Contract Assets $ 56 $ (301 ) $ 331 $ (86 ) $ - Contract Liabilities - Open Projects (4) 101 (218 ) 272 (155 ) - Contract Liabilities - Other Customer Deposits (5) 174 (131 ) 126 - 169 Net Contract Assets (Liabilities) $ (219 ) $ 48 $ (67 ) $ 69 $ (169 ) (1) For contract assets, the amount represents amount billed to the customer. For contract liabilities, the amount represents reductions for revenue recognized. (2) For contract assets, the amount represents revenue recognized during the period using the cost-to-cost method. For contract liabilities, the amount represents advance payments received during the period. (3) Effective November 1, 2019, the Company completed a spinoff of a regulatory consulting business unit, Spherix Consulting Group, Inc. ("Spherix"). The Company assigned to Spherix all existing consulting contracts and transferred related contract assets and liabilities. (4) Contract liabilities from ongoing consulting projects. (5) Other customer deposits include payments received for orders not fulfilled and other advance payments. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Weighted average assumptions of stock options granted | Year Ended December 2019 2018 Expected term 6 years 6 years Volatility 67 % 69 % Dividend Yield 0 % 0 % Risk-free rate 2 % 3 % |
Stock option activity | 1) Service Period Based Stock Options Weighted Average Remaining Aggregate Number of Exercise Contractual Fair Intrinsic Shares Price Term Value Value Outstanding at December 30, 2017 5,467 $ 3.49 6.41 $ 13,101 Options Granted 3,071 4.29 10.00 $ 2.74 Options Exercised (131 ) 4.02 $ 109 Options Expired (245 ) 4.50 Options Forfeited (139 ) 4.21 Outstanding at December 31, 2018 8,023 $ 3.75 7.11 $ 2,207 Options Granted 2,603 4.03 10.00 $ 2.46 Options Exercised (402 ) 2.54 $ 389 Options Expired (3 ) 4.50 Options Forfeited (712 ) 3.89 Outstanding at December 31, 2019 9,509 $ 3.86 6.90 $ 6,315 * Exercisable at December 31, 2019 5,822 $ 3.75 5.60 $ 4,725 * *The aggregate 2) Performance Based Stock Options Weighted Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value Outstanding at December 30, 2017 67 $ 1.89 5.08 Options Granted - - Options Exercised - - Options Forfeited - - Outstanding at December 31, 2018 67 $ 1.89 4.08 Options Granted - - Options Exercised (25 ) 1 .89 $ 69 Options Forfeited - - Outstanding at December 31, 2019 42 $ 1.89 3.08 $ 101 Exercisable at December 31, 2019 42 $ 1.89 3.08 $ 101 3) Market Based Stock Options Weighted Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value Outstanding at December 30, 2017 1,000 $ 4.24 9.76 Options Granted - - Options Exercised - - Options Forfeited - - Outstanding at December 31, 2018 1,000 $ 4.24 8.76 Options Granted - - Options Exercised - - Options Forfeited - - Outstanding at December 31, 2019 1,000 $ 4.24 7. 76 $ 70 Exercisable at December 31, 2019 722 $ 4.24 7.76 $ 51 |
Restricted stock awards granted to employees | Weighted Average Shares Fair Value Unvested shares at December 30, 2017 185 $ 3.28 Granted - - Vested (2 ) 5.28 Forfeited - - Unvested shares at December 31, 2018 183 $ 3.25 Granted - - Vested - - Forfeited - - Unvested shares at December 31, 2019 183 $ 3.25 Expected to Vest as of December 31, 2019 183 $ 3.25 |
Share-based compensation | Year ending (In thousands) Dec. 31, 2019 Dec. 31, 2018 Share-based compensation expense Cost of sales $ 107 $ 85 Sales and marketing 731 346 Research and development 529 353 General and administrative 5,805 5,587 Total $ 7,172 $ 6,371 |
Stock Issuance and Conversion_2
Stock Issuance and Conversion of Convertible Notes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Summary of convertible notes | Description Modified Original Extended Original Amount Principal $ 4.465 $ 4.590 August 15, 2019 July 1, 2019 $ 10,000 Interest at a rate of 5.0% per annum 123 Total Amount Converted for 2.3 million shares $ 10,123 Debt Discount - Issuance costs 565 Debt Discount - Down round feature 282 Total Debt Discount recognized as Interest Expense $ 847 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
FairValueAssumptionsRiskFreeInterestRateStockIssuance | |
Warrants | Weighted Average Remaining Number of Exercise Contractual Shares Price Term Outstanding and exercisable at December 30, 2017 470 $ 4.15 2.17 Warrants Issued - - Warrants Exercised - - Warrants Expired (266 ) 4.50 Outstanding and exercisable at December 31, 2018 204 3.69 0.57 Warrants Issued - - Warrants Exercised (140 ) 3.19 Warrants Expired (64 ) 4.80 Outstanding and exercisable at December 31, 2019 - $ - - |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Purchase obligations | (In thousands) Fiscal year ending: 2020 $ 11,520 $ 11,520 |
Minimum royalties including license maintenance fees | (In thousands) Fiscal years ending: 2020 $ 342 2021 360 2022 361 2023 363 2024 364 $ 1,790 |
Business Segmentation and Geo_2
Business Segmentation and Geographical Distribution (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Business segmentation and geographical distribution | Year ended Consumer Analytical Reference December 31, 2019 Products Ingredients Standards and Corporate (In thousands) segment segment Services segment and other Total Net sales $ 36,075 $ 6,196 $ 4,020 $ - $ 46,291 Cost of sales 14,550 2,980 2,992 - 20,522 Gross profit 21,525 3,216 1,028 - 25,769 Operating expenses: Sales and marketing 17,343 245 628 - 18,216 Research and development 3,699 721 - - 4,420 General and administrative - - - 34,308 34,308 Other - - - 125 125 Operating expenses 21,042 966 628 34,433 57,069 Operating income (loss) $ 483 $ 2,250 $ 400 $ (34,433 ) $ (31,300 ) Year ended Consumer Analytical Reference December 31, 2018 Products Ingredients Standards and Corporate (In thousands) segment segment Services segment and other Total Net sales $ 18,451 $ 8,565 $ 4,541 $ - $ 31,557 Cost of sales 7,222 4,831 3,449 - 15,502 Gross profit 11,229 3,734 1,092 - 16,055 Operating expenses: Sales and marketing 15,063 727 747 - 16,537 Research and development 3,852 1,626 - - 5,478 General and administrative - - - 27,137 27,137 Other - - - 75 75 Operating expenses 18,915 2,353 747 27,212 49,227 Operating income (loss) $ (7,686 ) $ 1,381 $ 345 $ (27,212 ) $ (33,172 ) Consumer Analytical Reference At December 31, 2019 Products Ingredients Standards and Corporate (In thousands) segment segment Services segment and other Total Total assets $ 12,137 $ 2,135 $ 918 $ 25,057 $ 40,247 Consumer Analytical Reference At December 31, 2018 Products Ingredients Standards and Corporate (In thousands) segment segment Services segment and other Total Total assets $ 7,407 $ 5,412 $ 1,213 $ 28,200 $ 42,232 |
Disaggregation of revenue | Year Ended December 31, 2019 (In thousands) Consumer Products Segment Ingredients Segment Analytical Reference Standards and Services Segment Total TRU NIAGEN®, Consumer Product $ 36,075 $ - $ - $ 36,075 NIAGEN® Ingredient - 4,879 - 4,879 Subtotal NIAGEN Related $ 36,075 $ 4,879 $ - $ 40,954 Other Ingredients - 1,317 - 1,317 Reference Standards - - 3,064 3,064 Consulting and Other - - 956 956 Subtotal Other Goods and Services $ - $ 1,317 $ 4,020 $ 5,337 Total Net Sales $ 36,075 $ 6,196 $ 4,020 $ 46,291 Year Ended December 31, 2018 (In thousands) Consumer Products Segment Ingredients Segment Analytical Reference Standards and Services Segment Total TRU NIAGEN®, Consumer Product $ 18,451 $ - $ - $ 18,451 NIAGEN® Ingredient - 5,169 - 5,169 Subtotal NIAGEN Related $ 18,451 $ 5,169 $ - $ 23,620 Other Ingredients - 3,396 - 3,396 Reference Standards - - 3,455 3,455 Consulting and Other - - 1,086 1,086 Subtotal Other Goods and Services $ - $ 3,396 $ 4,541 $ 7,937 Total Net Sales $ 18,451 $ 8,565 $ 4,541 $ 31,557 Revenues from international sources Revenues from International Sources Year ended Dec. 31, 2019 Year ended Dec. 31, 2018 Consumer Products Segment $10.8 million $4.2 million Ingredients Segment $0.6 million $0.6 million Analytical Reference Standards and Services Segment $1.8 million $1.7 million Total $13.2 million $6.5 million *International sources include Europe, North America, South America, Asia and Oceania. |
Major customers/vendors | Disclosure of major customers Major customers who accounted for more than 10% of the Company’s total sales were as follows: Years Ended Major Customers 2019 2018 A.S. Watson Group - Related Party 15.8 % * Life Extension * 10.0 % * Represents less than 10%. Major customers who accounted for more than 10% of the Company’s total trade receivables were as follows: Percentage of the Company's Total Trade Receivables Major Customers At December 31, 2019 At December 31, 2018 A.S. Watson Group - Related Party 39.0 % 15.9 % Life Extension 27.4 % * Elysium Health (1) * 51.2 % * Represents less than 10%. (1) There is ongoing litigation with Elysium Health. Disclosure of major vendors Major vendors who accounted for more than 10% of the Company's total accounts payable were as follows: Percentage of the Company's Total Accounts Payable Major Vendors At December 31, 2019 At December 31, 2018 Vendor A 43.1 % 36.8 % Vendor E * 13.2 % * Represents less than 10%. |
Liquidity (Details Narrative)
Liquidity (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Net loss | $ (32,147) | $ (33,316) | |
Cash and cash equivalents | 18,812 | 22,616 | $ 45,389 |
Restricted cash | $ 200 | $ 200 |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Shipping and handling fees billed | $ 360 | $ 287 |
Significant Accounting Polici_5
Significant Accounting Policies (Details 1) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Allowance for doubtful receivables | $ 2,764 | $ 537 |
Elysium Health | ||
Allowance for doubtful receivables | 2,733 | 500 |
Other Allowances | ||
Allowance for doubtful receivables | $ 31 | $ 37 |
Significant Accounting Polici_6
Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Restricted cash | $ 200 | $ 200 |
Advertising expense | $ 6,689 | $ 8,764 |
Loss Per Share Applicable to _3
Loss Per Share Applicable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Net loss | $ (32,147) | $ (33,316) | |
Basic and diluted loss per common share | $ (0.56) | $ (0.61) | |
Weighted average common shares outstanding (in thousands) | [1] | 57,056 | 55,006 |
Stock Options | |||
Diliutive securities (in thousands) | [2] | $ 10,551 | $ 9,089 |
Warrants | |||
Diliutive securities (in thousands) | [2] | $ 0 | $ 204 |
[1] | Includes approximately 0.2 million shares of restricted stock for each of the years 2019 and 2018, which are participating securities that feature voting and dividend rights. | ||
[2] | Excluded from the computation of loss per share as their impact is antidilutive. |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Bulk ingredients | $ 1,364 | $ 2,254 |
Reference standards | 635 | 751 |
Consumer products - finished goods | 4,877 | 2,450 |
Consumer Products - work in process | 4,659 | 2,794 |
Inventory | $ 11,535 | $ 8,249 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accumulated amortization | $ (1,670) | $ (1,424) |
Net amount | 1,311 | 1,547 |
Healthspan Research LLC Acquisition | ||
Gross carrying amount | $ 1,346 | 1,346 |
Remaining weighted average period | 10 years | |
License Agreements and Other | ||
Gross carrying amount | $ 1,635 | $ 1,625 |
Remaining weighted average period | 9 years |
Intangible Assets (Details 1)
Intangible Assets (Details 1) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2020 | $ 242 | |
2021 | 223 | |
2022 | 186 | |
2023 | 157 | |
2024 | 153 | |
Thereafter | 350 | |
Intangible assets | $ 1,311 | $ 1,547 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense on amortizable intangible assets | $ 246 | $ 235 |
Leasehold Improvements and Eq_3
Leasehold Improvements and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, plant and equipment, gross | $ 6,555 | $ 5,636 |
Less accumulated depreciation | 2,790 | 2,051 |
Property, plant and equipment, net | 3,765 | 3,585 |
Laboratory Equipment | ||
Property, plant and equipment, gross | $ 2,859 | 2,755 |
Useful life | 10 years | |
Leasehold Improvements | ||
Property, plant and equipment, gross | $ 2,320 | 2,127 |
Useful life | Lesser of lease term or estimated useful life | |
Computer Equipment | ||
Property, plant and equipment, gross | $ 1,104 | 604 |
Useful life | 3 to 5 years | |
Furniture and Fixtures | ||
Property, plant and equipment, gross | $ 201 | 143 |
Useful life | 7 to 10 years | |
Construction in Progress | ||
Property, plant and equipment, gross | $ 71 | $ 7 |
Leasehold Improvements and Eq_4
Leasehold Improvements and Equipment, Net (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 762 | $ 607 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating leases | ||
Operating lease expense | $ 663 | |
Variable lease expense | 246 | |
Operating lease expense | 909 | |
Short-term lease rent expense | 70 | |
Total expense | 979 | |
Amortization of equipment assets | 83 | $ 87 |
Interest on lease liabilities | 33 | 41 |
Total expenses | $ 116 | $ 128 |
Leases (Details 1)
Leases (Details 1) | Dec. 31, 2019 |
Leases [Abstract] | |
Weighted-average remaining lease term (years) - operating leases | 1 year 10 months 24 days |
Weighted-average discount rate - operating leases | 8.00% |
Weighted-average remaining lease term (years) - finance leases | 10 months 24 days |
Weighted-average discount rate - finance leases | 8.90% |
Leases (Details 2)
Leases (Details 2) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Year ending December 31, 2020 | $ 690 | |
Year ending December 31, 2021 | 614 | |
Year ending December 31, 2022 | 138 | |
Year ending December 31, 2023 | 143 | |
Year ending December 31, 2024 | 25 | |
Total | 1,610 | |
Less present value discount | 167 | |
Operating lease liabilities | 1,443 | |
Less current portion | 595 | $ 0 |
Long-term obligations under operating leases | $ 848 | $ 0 |
Leases (Details 3)
Leases (Details 3) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Year ending December 31, 2020 | $ 272 | |
Year ending December 31, 2021 | 18 | |
Total | 290 | |
Less present value discount | 14 | |
Finance lease liabilities | 276 | $ 300 |
Less current portion | 258 | 173 |
Long-term obligations under finance leases | $ 18 | $ 137 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Leases [Abstract] | ||
Operating lease assets | $ 891 | $ 0 |
Operating lease liabilities | 1,443 | |
Finance lease assets | 700 | 700 |
Finance lease liabilities | $ 276 | $ 300 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) $ in Thousands | Dec. 31, 2019USD ($) |
Line of Credit Facility [Abstract] | |
Debt issuance costs, line of credit | $ 100 |
Unamortized debt issuance costs, line of credit | $ 100 |
Deferred Revenue (Details)
Deferred Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred Revenue [Abstract] | ||
Revenue recognized from deferred revenue | $ 127 | $ 0 |
Deferred revenue | $ 3,873 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Federal income tax expense at statutory rate | (21.00%) | (21.00%) |
State income tax, net of federal benefit | (6.40%) | (6.60%) |
Permanent differences | 1.10% | 1.10% |
Changes of state net operating losses | 0.30% | (0.50%) |
Change in stock options and restricted stock | (0.20%) | 0.00% |
Change in valuation allowance | 26.20% | 27.10% |
Other | 0.00% | (0.10%) |
Effective tax rate | 0.00% | 0.00% |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 24,233 | $ 17,957 |
Stock options and restricted stock | 3,988 | 2,654 |
Interest expense | 278 | 0 |
Inventory reserve | 353 | 222 |
Allowance for doubtful accounts | 758 | 168 |
Accrued expenses | 689 | 831 |
Deferred revenue | 0 | 19 |
Leasehold improvements and equipment | 14 | 4 |
Intangibles | 66 | 46 |
Operating leases | 152 | 168 |
Deferred tax assets, gross | 30,531 | 22,069 |
Less valuation allowance | (30,313) | (21,932) |
Deferred tax assets, net | 218 | 137 |
Deferred tax liabilities: | ||
Prepaid expenses | (218) | (137) |
Deferred tax liabilities, net | (218) | (137) |
Deferred tax assets/liabilities | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Effective income tax rates | 0.00% | 0.00% |
Valuation allowance | $ (30,313) | $ (21,932) |
Increase in valuation allowance | 8,400 | |
Federal | ||
Operating loss carryforwards | 91,400 | |
State | ||
Operating loss carryforwards | $ 79,400 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Net sales | $ 7,300 | $ 3,300 | |
Trade receivable | 800 | 700 | |
A.S. Watson Group | |||
Net sales | [1] | 7,300 | 2,900 |
Trade receivable | [1] | 800 | 700 |
Horizon Ventures | |||
Net sales | [1] | 0 | 400 |
Trade receivable | [1] | $ 0 | $ 0 |
[1] | A.S. Watson Group and Horizon Ventures are related parties through common ownership of an enterprise that beneficially owns more than 10% of the common stock of the Company. |
Contract Assets and Contract _3
Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Contract assets, beginning | $ 56 | ||
Reductions | [1] | (301) | |
Additions | [2] | 331 | |
Transferred | [3] | (86) | |
Contract assets, ending | 0 | $ 56 | |
Net contract assets (liabilities), beginning | (219) | ||
Reductions | [1] | 48 | |
Additions | [2] | (67) | |
Transferred | [3] | 69 | |
Net contract assets (liabilities), ending | (169) | (219) | |
Revenue from contract liabilities at beginning of the year | 143 | 95 | |
Open Projects | |||
Contract liabilities, beginning | [4] | 101 | |
Reductions | [1],[4] | (218) | |
Additions | [2],[4] | 272 | |
Transferred | [3],[4] | (155) | |
Contract liabilities, ending | [4] | 0 | 101 |
Other Customer Deposits | |||
Contract liabilities, beginning | [5] | 174 | |
Reductions | [1],[5] | (131) | |
Additions | [2],[5] | 126 | |
Transferred | [3],[5] | 0 | |
Contract liabilities, ending | [5] | $ 169 | $ 174 |
[1] | For contract assets, the amount represents amount billed to the customer. For contract liabilities, the amount represents reductions for revenue recognized. | ||
[2] | For contract assets, the amount represents revenue recognized during the period using the cost-to-cost method. For contract liabilities, the amount represents advance payments received during the period. | ||
[3] | Effective November 1, 2019, the Company completed a spinoff of a regulatory consulting business unit, Spherix Consulting Group, Inc. ("Spherix"). The Company assigned to Spherix all existing consulting contracts and transferred related contract assets and liabilities. | ||
[4] | Contract liabilities from ongoing consulting projects. | ||
[5] | Other customer deposits include payments received for orders not fulfilled and other advance payments. |
Share-Based Compensation (Detai
Share-Based Compensation (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Expected term | 6 years | 6 years |
Volatility | 67.00% | 69.00% |
Dividend yield | 0.00% | 0.00% |
Risk-free rate | 2.00% | 3.00% |
Share-Based Compensation (Det_2
Share-Based Compensation (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | |||
Service Period Based Stock Options | ||||
Stock Options | ||||
Outstanding, beginning (in thousands) | 8,023 | 5,467 | ||
Options granted (in thousands) | 2,603 | 3,071 | ||
Options exercised (in thousands) | (402) | (131) | ||
Options expired (in thousands) | (3) | (245) | ||
Options forfeited (in thousands) | (712) | (139) | ||
Outstanding, ending (in thousands) | 9,509 | 8,023 | ||
Exercisable (in thousands) | 5,822 | |||
Weighted Average Exercise Price | ||||
Outstanding, beginning | $ 3.75 | $ 3.49 | ||
Options granted | 4.03 | 4.29 | ||
Options exercised | 2.54 | 4.02 | ||
Options expired | 4.50 | 4.50 | ||
Options forfeited | 3.89 | 4.21 | ||
Outstanding, ending | 3.86 | $ 3.75 | ||
Exercisable | $ 3.75 | |||
Weighted Average Remaining Contractual Term | ||||
Outstanding, beginning | 7 years 1 month 10 days | 6 years 4 months 28 days | ||
Options granted | 10 years | 10 years | ||
Outstanding, ending | 6 years 10 months 24 days | 7 years 1 month 10 days | ||
Exercisable | 5 years 7 months 6 days | |||
Weighted Average Fair Value | ||||
Weighted average fair value option granted | $ 2.46 | $ 2.74 | ||
Aggregate Intrinsic Value | ||||
Outstanding, beginning | $ 2,207 | $ 13,101 | ||
Exercised | 389 | 109 | ||
Outstanding, ending | 6,315 | [1] | $ 2,207 | |
Exercisable | [1] | $ 4,725 | ||
Performance Based Stock Options | ||||
Stock Options | ||||
Outstanding, beginning (in thousands) | 67 | 67 | ||
Options granted (in thousands) | 0 | 0 | ||
Options exercised (in thousands) | (25) | 0 | ||
Options forfeited (in thousands) | 0 | 0 | ||
Outstanding, ending (in thousands) | 42 | 67 | ||
Exercisable (in thousands) | 42 | |||
Weighted Average Exercise Price | ||||
Outstanding, beginning | $ 1.89 | $ 1.89 | ||
Options granted | 0 | 0 | ||
Options exercised | 1.89 | 0 | ||
Options forfeited | 0 | 0 | ||
Outstanding, ending | 1.89 | $ 1.89 | ||
Exercisable | $ 1.89 | |||
Weighted Average Remaining Contractual Term | ||||
Outstanding, beginning | 4 years 9 months 18 days | 5 years 9 months 18 days | ||
Outstanding, ending | 3 years 9 months 18 days | 4 years 9 months 18 days | ||
Exercisable | 3 years 9 months 18 days | |||
Aggregate Intrinsic Value | ||||
Exercised | $ 69 | |||
Outstanding, ending | 101 | |||
Exercisable | $ 101 | |||
Market Based Stock Options | ||||
Stock Options | ||||
Outstanding, beginning (in thousands) | 1,000 | 1,000 | ||
Options granted (in thousands) | 0 | 0 | ||
Options exercised (in thousands) | 0 | 0 | ||
Options forfeited (in thousands) | 0 | 0 | ||
Outstanding, ending (in thousands) | 1,000 | 1,000 | ||
Exercisable (in thousands) | 722 | |||
Weighted Average Exercise Price | ||||
Outstanding, beginning | $ 4.24 | $ 4.24 | ||
Options granted | 0 | 0 | ||
Options exercised | 0 | 0 | ||
Options forfeited | 0 | 0 | ||
Outstanding, ending | 4.24 | $ 4.24 | ||
Exercisable | $ 4.24 | |||
Weighted Average Remaining Contractual Term | ||||
Outstanding, beginning | 8 years 9 months 4 days | 9 years 9 months 4 days | ||
Outstanding, ending | 7 years 9 months 4 days | 8 years 9 months 4 days | ||
Exercisable | 7 years 9 months 4 days | |||
Aggregate Intrinsic Value | ||||
Outstanding, ending | $ 70 | |||
Exercisable | $ 51 | |||
[1] | The aggregate intrinsic values in the table above are based on the Company's closing stock price of $4.31 on the last day of business for the year ended December 31, 2019. |
Share-Based Compensation (Det_3
Share-Based Compensation (Details 2) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Restricted Stock Awards | ||
Outstanding, beginning (in thousands) | 183 | 185 |
Granted (in thousands) | 0 | 0 |
Vested (in thousands) | 0 | (2) |
Forfeited (in thousands) | 0 | 0 |
Outstanding, ending (in thousands) | 183 | 183 |
Expected to vest (in thousands) | 183 | |
Weighted Average Award-Date Fair Value | ||
Outstanding, beginning | $ 3.25 | $ 3.28 |
Granted | 0 | 0 |
Vested | 0 | 5.28 |
Forfeited | 0 | 0 |
Outstanding, beginning | 3.25 | $ 3.25 |
Expected to vest | $ 3.25 |
Share-Based Compensation (Det_4
Share-Based Compensation (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based compensation | $ 7,172 | $ 6,371 |
Cost of Sales | ||
Share-based compensation | 107 | 85 |
Sales and Marketing | ||
Share-based compensation | 731 | 346 |
Research and Development | ||
Share-based compensation | 529 | 353 |
General and Administrative | ||
Share-based compensation | $ 5,805 | $ 5,587 |
Share-Based Compensation (Det_5
Share-Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Share price | $ 4.31 | |
Performance shares granted to CEO Rob Fried | 167 | 333 |
Recognized share based compensation expense for performance award | $ 700 | $ 1,300 |
Stock Issuance and Conversion_3
Stock Issuance and Conversion of Convertible Notes (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)$ / shares | ||
Equity [Abstract] | ||
Principal modified conversion price | $ / shares | $ 4.465 | [1] |
Principal original conversion price | $ / shares | $ 4.590 | |
Principal extended maturity date | Aug. 15, 2019 | |
Principal original maturity date | Jul. 1, 2019 | |
Principal interest rate | 5.00% | |
Principal amount | $ 10,000 | |
Interest at rate | 123 | |
Principal and interest | 10,123 | |
Debt discount amount - issuance costs | 565 | |
Debt discount amount - down round feature | 282 | |
Debt discount amount | $ 847 | |
[1] | The conversion price has a down round feature. The original conversion price of $4.59 was lowered to $4.465 due to the Financing. |
Stock Issuance and Conversion_4
Stock Issuance and Conversion of Convertible Notes (Details Narrative) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / shares | |
Equity [Abstract] | |
Common Stock Sold | $ 7,000 |
Price per share | $ / shares | $ 4.465 |
Proceeds, net of offering costs | $ 6,800 |
Warrants (Details)
Warrants (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Warrants | ||
Outstanding, beginning (in thousands) | 204 | 470 |
Issued (in thousands) | 0 | 0 |
Exercised (in thousands) | (140) | 0 |
Expired (in thousands) | (64) | (266) |
Outstanding, ending (in thousands) | 0 | 204 |
Exercisable | 0 | |
Weighted Average Exercise Price | ||
Outstanding, beginning | $ 3.69 | $ 4.15 |
Issued | 0 | 0 |
Exercised | 3.19 | 0 |
Expired | 4.80 | 4.50 |
Outstanding, beginning | 0 | $ 3.69 |
Exercisable | $ 0 | |
Weighted Average Remaining Contractual Term | ||
Outstanding, ending | 6 months 25 days | 2 years 2 months 1 day |
Outstanding, beginning | 0 years | 6 months 25 days |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 11,520 |
Total purchase obligations | $ 11,520 |
Commitments and Contingencies_3
Commitments and Contingencies (Details 1) $ in Thousands | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 342 |
2021 | 360 |
2022 | 361 |
2023 | 363 |
2024 | 364 |
Minimum royalties including license maintenance fees | $ 1,790 |
Business Segmentation and Geo_3
Business Segmentation and Geographical Distribution (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Net sales | $ 46,291 | $ 31,557 |
Cost of sales | 20,522 | 15,502 |
Gross profit | 25,769 | 16,055 |
Operating expenses: | ||
Sales and marketing | 18,216 | 16,537 |
Research and development | 4,420 | 5,478 |
General and administrative | 34,308 | 27,137 |
Other | 125 | 75 |
Operating expenses | 57,069 | 49,227 |
Operating income (loss) | (31,300) | (33,172) |
Total assets | 40,247 | 42,232 |
Consumer Products Segment | ||
Net sales | 36,075 | 18,451 |
Cost of sales | 14,550 | 7,222 |
Gross profit | 21,525 | 11,229 |
Operating expenses: | ||
Sales and marketing | 17,343 | 15,063 |
Research and development | 3,699 | 3,852 |
General and administrative | 0 | 0 |
Other | 0 | 0 |
Operating expenses | 21,042 | 18,915 |
Operating income (loss) | 483 | (7,686) |
Total assets | 12,137 | 7,407 |
Ingredients Segment | ||
Net sales | 6,196 | 8,565 |
Cost of sales | 2,980 | 4,831 |
Gross profit | 3,216 | 3,734 |
Operating expenses: | ||
Sales and marketing | 245 | 727 |
Research and development | 721 | 1,626 |
General and administrative | 0 | 0 |
Other | 0 | 0 |
Operating expenses | 966 | 2,353 |
Operating income (loss) | 2,250 | 1,381 |
Total assets | 2,135 | 5,412 |
Analytical Reference Standards and Services Segment | ||
Net sales | 4,020 | 4,541 |
Cost of sales | 2,992 | 3,449 |
Gross profit | 1,028 | 1,092 |
Operating expenses: | ||
Sales and marketing | 628 | 747 |
Research and development | 0 | 0 |
General and administrative | 0 | 0 |
Other | 0 | 0 |
Operating expenses | 628 | 747 |
Operating income (loss) | 400 | 345 |
Total assets | 918 | 1,213 |
Other Segment | ||
Net sales | 0 | 0 |
Cost of sales | 0 | 0 |
Gross profit | 0 | 0 |
Operating expenses: | ||
Sales and marketing | 0 | 0 |
Research and development | 0 | 0 |
General and administrative | 34,308 | 27,137 |
Other | 125 | 75 |
Operating expenses | 34,433 | 27,212 |
Operating income (loss) | (34,433) | (27,212) |
Total assets | $ 25,057 | $ 28,200 |
Business Segmentation and Geo_4
Business Segmentation and Geographical Distribution (Details 1) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Net sales | $ 46,291 | $ 31,557 |
Consumer Products Segment | ||
Net sales | 36,075 | 18,451 |
Ingredients Segment | ||
Net sales | 6,196 | 8,565 |
Analytical Reference Standards and Services Segment | ||
Net sales | 4,020 | 4,541 |
TRU NIAGEN Consumer Product | ||
Net sales | 36,075 | 18,451 |
TRU NIAGEN Consumer Product | Consumer Products Segment | ||
Net sales | 36,075 | 18,451 |
TRU NIAGEN Consumer Product | Ingredients Segment | ||
Net sales | 0 | 0 |
TRU NIAGEN Consumer Product | Analytical Reference Standards and Services Segment | ||
Net sales | 0 | 0 |
NIAGEN Ingredient | ||
Net sales | 4,879 | 5,169 |
NIAGEN Ingredient | Consumer Products Segment | ||
Net sales | 0 | 0 |
NIAGEN Ingredient | Ingredients Segment | ||
Net sales | 4,879 | 5,169 |
NIAGEN Ingredient | Analytical Reference Standards and Services Segment | ||
Net sales | 0 | 0 |
NIAGEN Related | ||
Net sales | 40,954 | 23,620 |
NIAGEN Related | Consumer Products Segment | ||
Net sales | 36,075 | 18,451 |
NIAGEN Related | Ingredients Segment | ||
Net sales | 2,879 | 5,169 |
NIAGEN Related | Analytical Reference Standards and Services Segment | ||
Net sales | 0 | 0 |
Other Ingredients | ||
Net sales | 1,317 | 3,396 |
Other Ingredients | Consumer Products Segment | ||
Net sales | 0 | 0 |
Other Ingredients | Ingredients Segment | ||
Net sales | 1,317 | 3,396 |
Other Ingredients | Analytical Reference Standards and Services Segment | ||
Net sales | 0 | 0 |
Reference Standards | ||
Net sales | 3,064 | 3,455 |
Reference Standards | Consumer Products Segment | ||
Net sales | 0 | 0 |
Reference Standards | Ingredients Segment | ||
Net sales | 0 | 0 |
Reference Standards | Analytical Reference Standards and Services Segment | ||
Net sales | 3,064 | 3,455 |
Consulting and Other | ||
Net sales | 956 | 1,086 |
Consulting and Other | Consumer Products Segment | ||
Net sales | 0 | 0 |
Consulting and Other | Ingredients Segment | ||
Net sales | 0 | 0 |
Consulting and Other | Analytical Reference Standards and Services Segment | ||
Net sales | 956 | 1,086 |
Other Goods and Services | ||
Net sales | 5,337 | 7,937 |
Other Goods and Services | Consumer Products Segment | ||
Net sales | 0 | 0 |
Other Goods and Services | Ingredients Segment | ||
Net sales | 1,317 | 3,396 |
Other Goods and Services | Analytical Reference Standards and Services Segment | ||
Net sales | $ 4,020 | $ 4,541 |
Business Segmentation and Geo_5
Business Segmentation and Geographical Distribution (Details 2) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Revenue from international sources | [1] | $ 13,200 | $ 6,500 |
Consumer Products Segment | |||
Revenue from international sources | [1] | 10,800 | 4,200 |
Ingredients Segment | |||
Revenue from international sources | [1] | 600 | 600 |
Analytical Reference Standards and Services Segment | |||
Revenue from international sources | [1] | $ 1,800 | $ 1,700 |
[1] | International sources include Europe, North America, South America, Asia and Oceania. |
Business Segmentation and Geo_6
Business Segmentation and Geographical Distribution (Details 3) | 12 Months Ended | ||||
Dec. 31, 2019 | Dec. 31, 2018 | ||||
Sales Revenue, Net | A.S. Watson Group | |||||
Customer concentration risk | 15.80% | [1] | |||
Sales Revenue, Net | Life Extension | |||||
Customer concentration risk | [1] | 10.00% | |||
Trade Receivables | A.S. Watson Group | |||||
Customer concentration risk | 39.00% | 15.90% | |||
Trade Receivables | Life Extension | |||||
Customer concentration risk | 27.40% | [1] | |||
Trade Receivables | Elysium Health | |||||
Customer concentration risk | [2] | [1] | 51.20% | ||
Accounts Payable | Vendor A | |||||
Customer concentration risk | 43.10% | 36.80% | |||
Accounts Payable | Vendor E | |||||
Customer concentration risk | [1] | 13.20% | |||
[1] | Represents less than 10%. | ||||
[2] | There is ongoing litigation with Elysium Health. |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)shares | |
Subsequent Events [Abstract] | |
Severance to Lisa Bratkovich | $ | $ 350 |
Accelerated vesting of options for Lisa Bratkovich | shares | 94,000 |