Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 17, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | ChromaDex Corp. | |
Entity Central Index Key | 0001386570 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
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 Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 001-37752 | |
Entity Common Stock, Shares Outstanding | 61,477,895 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash, including restricted cash of $0.2 million and $0.2 million, respectively | $ 13,608 | $ 18,812 |
Trade receivables, net of allowances of $0.1 million and $2.8 million, respectively; receivables from related party: $0.5 million and $0.8 million, respectively | 3,558 | 2,175 |
Inventories | 11,280 | 11,535 |
Prepaid expenses and other assets | 701 | 996 |
Total current assets | 29,147 | 33,518 |
Leasehold improvements and equipment, net | 3,613 | 3,765 |
Intangible assets, net | 1,249 | 1,311 |
Right of use assets | 799 | 891 |
Other long-term assets | 802 | 762 |
Total assets | 35,610 | 40,247 |
Current Liabilities | ||
Accounts payable | 8,159 | 9,626 |
Accrued expenses | 5,249 | 4,415 |
Current maturities of operating lease obligations | 614 | 595 |
Current maturities of finance lease obligations | 206 | 258 |
Customer deposits | 238 | 169 |
Total current liabilities | 14,466 | 15,063 |
Deferred revenue | 3,873 | 3,873 |
Operating lease obligations, less current maturities | 687 | 848 |
Finance lease obligations, less current maturities | 36 | 18 |
Total liabilities | 19,062 | 19,802 |
Stockholders' Equity | ||
Common stock, $.001 par value; authorized 150,000 shares; issued and outstanding March 31, 2020 59,605 shares and December 31, 2019 59,562 shares | 60 | 60 |
Additional paid-in capital | 144,290 | 142,285 |
Accumulated deficit | (127,802) | (121,900) |
Total stockholders' equity | 16,548 | 20,445 |
Total liabilities and stockholders' equity | $ 35,610 | $ 40,247 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Restricted cash | $ 200 | $ 200 |
Trade receivables, allowances | 100 | 2,800 |
Receivables from related party | $ 500 | $ 800 |
Common stock, par value per share | $ .001 | $ 0.001 |
Common stock, shares authorized (in thousands) | 150,000 | 150,000 |
Common stock, shares, issued (in thousands) | 59,605 | 59,562 |
Common stock, shares, outstanding (in thousands) | 59,605 | 59,562 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Income Statement [Abstract] | |||
Sales, net | $ 14,345 | $ 10,048 | |
Cost of sales | 6,034 | 4,747 | |
Gross profit | 8,311 | 5,301 | |
Operating expenses: | |||
Sales and marketing | 4,447 | 4,174 | |
Research and development | 919 | 1,168 | |
General and administrative | 8,835 | 8,331 | |
Operating expenses | 14,201 | 13,673 | |
Operating loss | (5,890) | (8,372) | |
Nonoperating expense: | |||
Interest income (expense), net | (12) | 35 | |
Nonoperating income (expense) | (12) | 35 | |
Net loss | $ (5,902) | $ (8,337) | |
Basic and diluted loss per common share | $ (0.10) | $ (0.15) | |
Basic and diluted weighted average common shares outstanding (in thousands) | [1] | 59,782 | 55,325 |
[1] | Includes approximately 0.2 million and 0.2 million nonvested restricted stock for the periods ending March 31, 2020 and March 31, 2019, respectively, which are participating securities that feature voting and dividend rights. |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Beginning balance, shares (in thousands) at Dec. 31, 2018 | 55,089 | |||
Beginning balance, amount at Dec. 31, 2018 | $ 55 | $ 116,876 | $ (89,753) | $ 27,178 |
Exercise of stock options, shares (in thousands) | 65 | |||
Exercise of stock options, amount | 107 | 107 | ||
Share-based compensation, shares (in thousands) | 167 | |||
Share-based compensation, amount | 2,029 | 2,029 | ||
Net loss | (8,337) | (8,337) | ||
Ending balance, shares (in thousands) at Mar. 31, 2019 | 55,321 | |||
Ending balance, amount at Mar. 31, 2019 | $ 55 | 119,012 | (98,090) | 20,977 |
Beginning balance, shares (in thousands) at Dec. 31, 2019 | 59,562 | |||
Beginning balance, amount at Dec. 31, 2019 | $ 60 | 142,285 | (121,900) | 20,445 |
Exercise of stock options, shares (in thousands) | 43 | |||
Exercise of stock options, amount | 132 | 132 | ||
Share-based compensation, amount | 1,873 | 1,873 | ||
Net loss | (5,902) | (5,902) | ||
Ending balance, shares (in thousands) at Mar. 31, 2020 | 59,605 | |||
Ending balance, amount at Mar. 31, 2020 | $ 60 | $ 144,290 | $ (127,802) | $ 16,548 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows From Operating Activities | ||
Net loss | $ (5,902) | $ (8,337) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation of leasehold improvements and equipment | 214 | 173 |
Amortization of intangibles | 62 | 61 |
Amortization of right of use assets | 92 | 138 |
Share-based compensation | 1,873 | 2,029 |
Allowance for doubtful trade receivables | (2,708) | 5 |
Non-cash financing costs | 23 | 0 |
Changes in operating assets and liabilities: | ||
Trade receivables | 1,326 | (956) |
Contract assets | 0 | (16) |
Inventories | 255 | (421) |
Prepaid expenses and other assets | 252 | (140) |
Accounts payable | (1,467) | 206 |
Accrued expenses | 833 | 279 |
Deferred revenue | 0 | 3,962 |
Customer deposits and other | 69 | 88 |
Principal payments on operating leases | (143) | (119) |
Net cash used in operating activities | (5,221) | (3,048) |
Cash Flows From Investing Activities | ||
Purchases of leasehold improvements and equipment | (15) | (239) |
Purchases of intangible assets | 0 | (10) |
Investment in other long-term assets | (5) | (47) |
Net cash used in investing activities | (20) | (296) |
Cash Flows From Financing Activities | ||
Proceeds from exercise of stock options | 132 | 107 |
Payment of debt issuance cost | (15) | 0 |
Principal payments on finance leases | (80) | (52) |
Net cash provided by financing activities | 37 | 55 |
Net decrease in cash | (5,204) | (3,289) |
Cash, beginning of period, including restricted cash of $0.2 million for both 2020 and 2019 | 18,812 | 22,616 |
Cash, ending of period, including restricted cash $0.2 million for both 2020 and 2019 | 13,608 | 19,327 |
Supplemental Disclosures of Cash Flow Information | ||
Cash payments for interest on finance leases | 6 | 7 |
Supplemental Schedule of Noncash Investing Activity | ||
Financing lease obligation incurred for purchase of computer equipment | 47 | 0 |
Operating lease obligation incurred for tenant improvement credit received | $ 0 | $ 64 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Statement of Cash Flows [Abstract] | |||
Restricted cash | $ 200 | $ 200 | $ 200 |
Interim Financial Statements
Interim Financial Statements | 3 Months Ended |
Mar. 31, 2020 | |
Interim Financial Statements | |
Interim Financial Statements | The accompanying financial statements of ChromaDex Corporation and its wholly owned subsidiaries, ChromaDex, Inc., Healthspan Research, LLC, ChromaDex Analytics, Inc. and ChromaDex Asia Limited (collectively referred to herein as “ChromaDex” or the “Company” or, in the first person as “we”, “us” and “our”) include all adjustments, consisting of normal recurring adjustments and accruals, that, in the opinion of the management of the Company, are necessary for a fair presentation of the Company’s financial position as of March 31, 2020 and results of operations and cash flows for the three months ended March 31, 2020 and March 31, 2019. These unaudited interim financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended December 31, 2019 appearing in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “Commission”) on March 10, 2020. Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results to be achieved for the full year ending on December 31, 2020. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. The balance sheet at December 31, 2019 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements. |
Nature of Business
Nature of Business | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business | ChromaDex is a science-based integrated nutraceutical company devoted to improving the way people age. ChromaDex 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 extensive 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 | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity | The Company's net cash outflow from operating activities was approximately $5.2 million for the three-month period ended March 31, 2020. As of March 31, 2020, cash and cash equivalents totaled approximately $13.6 million, which includes restricted cash of approximately $0.2 million. Subsequent to the period ended March 31, 2020, the Company entered into a Securities Purchase Agreement with its existing stockholders, Winsave Resources Limited and Pioneer Step Holdings Limited, pursuant to which the Company sold and issued an aggregate of $5.0 million of the Company’s common stock (the “Financing”). The Company anticipates that its current cash, cash equivalents, cash to be generated from operations, $5.0 million received from the Financing described above and available line of credit up to $7.0 million from Western Alliance Bank 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 | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Basis of presentation Recent accounting standards |
Earnings Per Share Applicable t
Earnings Per Share Applicable to Common Stockholders | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share Applicable to Common Stockholders | The following table sets forth the computations of earnings per share amounts applicable to common stockholders for the three months ended March 31, 2020 and March 31, 2019: Three Months Ended (In thousands, except per share data) Mar. 31, 2020 Mar. 31, 2019 Net loss $ (5,902 ) $ (8,337 ) Basic and diluted loss per common share $ (0.10 ) $ (0.15 ) Basic and diluted weighted average common shares outstanding (1): 59,782 55,325 Potentially dilutive securities (2): Stock options 12,194 10,078 Warrants - 140 (1) Includes approximately 0.2 million and 0.2 million nonvested restricted stock for the periods ending March 31, 2020 and March 31, 2019, respectively, which are participating securities that feature voting and dividend rights. (2) Excluded from the computation of loss per share as their impact is antidilutive. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Sale of consumer Net sales Three months ended Mar. 31, 2020 Net sales Three months ended Mar. 31, 2019 Trade receivable at Mar. 31, 2020 Trade receivable at Dec. 31, 2019 A.S. Watson Group $1.8 million $1.3 million $0.5 million $0.8 million Horizon Ventures - - - - Total $1.8 million $1.3 million $0.5 million $0.8 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. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | The amounts of major classes of inventory as of March 31, 2020 and December 31, 2019 are as follows: (In thousands) Mar. 31, 2020 Dec. 31, 2019 Bulk ingredients $ 112 $ 1,364 Reference standards 632 635 Consumer Products - Finished Goods 5,260 4,877 Consumer Products - Work in Process 5,276 4,659 $ 11,280 $ 11,535 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | Operating Leases As of March 31, 2020, the Company had operating lease assets in right of use assets of approximately $0.8 million and corresponding operating lease liabilities of approximately $1.3 million. For the three months ended March 31, 2020 and March 31, 2019, the following were expenses incurred in connection with our operating leases: For the Three Months Ended Mar. 31, 2020 For the Three Months Ended Mar. 31, 2019 Operating leases Operating lease expense $ 120 $ 180 Variable lease expense 69 55 Operating lease expense 189 235 Short-term lease rent expense 64 2 Total expense $ 253 $ 237 At Mar. 31, 2020 Weighted-average remaining lease term (years) – operating leases 1.7 Weighted-average discount rate – operating leases 8.0 % Minimum future lease payments under operating leases as of March 31, 2020 are as follows: (In thousands) Nine months ending December 31, 2020 $ 517 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 1,438 Less present value discount 137 Operating lease liabilities 1,301 Less current portion 614 Long-term obligations under operating leases $ 687 Finance Leases As of March 31, 2020, the Company had finance lease assets in equipment assets of approximately $0.7 million and corresponding finance lease liabilities of approximately $0.2 million. For the three months ended March 31, 2020 and March 31, 2019, the following were expenses incurred in connection with our finance leases: For the Three Months Ended Mar. 31, 2020 For the Three Months Ended Mar. 31, 2019 (In thousands) Finance leases Amortization of equipment assets $ 28 $ 21 Interest on lease liabilities 6 7 Total expenses $ 34 $ 28 At Mar. 31, 2020 Weighted-average remaining lease term (years) – finance leases 1.1 Weighted-average discount rate – finance leases 8.3 % Minimum future lease payments under finance leases as of March 31, 2020 are as follows: (In thousands) Nine Months Ending December 31, 2020 $ 204 Year Ending December 31, 2021 29 Year Ending December 31, 2022 21 Total 254 Less present value discount 12 Finance lease liabilities 242 Less current portion 206 Long-term obligations under finance leases $ 36 |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Share-Based Compensation | Equity Plans 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 March 31, 2020, under the 2017 Plan, the Company is authorized to issue shares subject to awards 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 1.2 million shares at March 31, 2020. On April 16, 2020, the Company’s Board of Directors amended the 2017 Plan, subject to stockholder approval, to among other things, increase the number of shares of common stock authorized for issuance under the 2017 Plan by 5.5 million shares. General Vesting Conditions The stock option awards generally vest ratably over a three-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 of the Board of Directors. The fair value of the Company’s stock options that are not market based was estimated at the date of grant using the Black-Scholes option pricing model. The table below outlines the weighted average assumptions for options granted during the three months ended March 31, 2020. Three months Ended March 31, 2020 Expected term 6 years Expected volatility 66 % Risk-free rate 1 % Expected dividends 0 % Service Period Based Stock Options The following table summarizes activity of service period-based stock options at March 31, 2020 and changes during the three months then ended (in thousands except per-share data and remaining contractual term): Weighted Average Remaining Aggregate Number of Exercise Contractual Fair Intrinsic Shares Price Term (Years) Value Value Outstanding at Dec. 31, 2019 9,509 $ 3.86 6.9 Options Granted 1,916 3.50 10.0 $ 2.06 Options Exercised (28 ) 3.81 $ 19 Options Forfeited (394 ) 3.29 Outstanding at Mar. 31, 2020 11,003 $ 3.82 7.0 $ 1,288 * Exercisable at Mar. 31, 2020 6,486 $ 3.77 5.4 $ 1,259 * *The aggregate intrinsic values in the table above are based on the Company’s stock price of $3.26, which is the closing price of the Company’s stock on the last day of business for the period ended March 31, 2020. 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 of the Board of Directors. 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 at March 31, 2020 and changes during the three months then ended (in thousands except per share data and remaining contractual term): Weighted Average Remaining Aggregate Number of Exercise Contractual Fair Intrinsic Shares Price Term (Years) Value Value Outstanding at Dec. 31, 2019 42 $ 1.89 3.1 Options Granted 164 4.34 4.0 $ 2.26 Options Exercised (15 ) 1.89 $ 42 Options Forfeited - - Outstanding at Mar. 31, 2020 191 $ 4.00 3.7 $ 36 * Exercisable at Mar. 31, 2020 26 $ 1.89 2.8 $ 36 * *The aggregate intrinsic values in the table above are based on the Company’s stock price of $3.26, which is the closing price of the Company’s stock on the last day of business for the period ended March 31, 2020. Total Remaining Unamortized Compensation for Stock Options As of March 31, 2020, there was approximately $9.8 million of total unrecognized compensation expense related to non-vested share-based compensation arrangements granted under the plans for employee stock options. That cost is expected to be recognized over a weighted average period of 2 years. Share-Based Compensation Share-based compensation expense was as follows: Three months ending (In thousands) Mar. 31, 2020 Mar. 31, 2019 Share-based compensation expense Cost of sales $ 33 $ 26 Sales and marketing 232 120 Research and development 138 123 General and administrative 1,470 1,760 Total $ 1,873 $ 2,029 |
Business Segments
Business Segments | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Business Segments | The Company has the following three reportable segments for the three-month period ended March 31, 2020: ● 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. ● Analytical reference standards and services segment: includes supply of phytochemical reference standards and other research and development services. 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. Three months ended Consumer Analytical Reference March 31, 2020 Products Ingredients Standards and Corporate (In thousands) segment segment Services segment and other Total Net sales $ 11,144 $ 2,475 $ 726 $ - $ 14,345 Cost of sales 4,302 1,056 676 - 6,034 Gross profit 6,842 1,419 50 - 8,311 Operating expenses: Sales and marketing 4,409 (84 ) 122 - 4,447 Research and development 782 137 - - 919 General and administrative - - - 8,835 8,835 Operating expenses 5,191 53 122 8,835 14,201 Operating income (loss) $ 1,651 $ 1,366 $ (72 ) $ (8,835 ) $ (5,890 ) Three months ended Consumer Analytical Reference March 31, 2019 Products Ingredients Standards and Corporate (In thousands) segment segment Services segment and other Total Net sales $ 7,454 $ 1,494 $ 1,100 $ - $ 10,048 Cost of sales 3,071 813 863 - 4,747 Gross profit 4,383 681 237 - 5,301 Operating expenses: Sales and marketing 3,917 112 145 - 4,174 Research and development 969 199 - - 1,168 General and administrative - - - 8,331 8,331 Operating expenses 4,886 311 145 8,331 13,673 Operating income (loss) $ (503 ) $ 370 $ 92 $ (8,331 ) $ (8,372 ) Consumer Analytical Reference At March 31, 2020 Products Ingredients Standards and Corporate (In thousands) segment segment Services segment and other Total Total assets $ 13,306 $ 1,771 $ 897 $ 19,636 $ 35,610 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 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. Three Months Ended March 31, 2020 (In thousands) Consumer Products Segment Ingredients Segment Analytical Reference Standards and Services Segment Total TRU NIAGEN®, Consumer Product $ 11,144 $ - $ - $ 11,144 NIAGEN® Ingredient - 1,961 - 1,961 Subtotal NIAGEN Related $ 11,144 $ 1,961 $ - $ 13,105 Other Ingredients - 514 - 514 Reference Standards - - 673 673 Consulting and Other - - 53 53 Subtotal Other Goods and Services $ - $ 514 $ 726 $ 1,240 Total Net Sales $ 11,144 $ 2,475 $ 726 $ 14,345 Three Months Ended March 31, 2019 (In thousands) Consumer Products Segment Ingredients Segment Analytical Reference Standards and Services Segment Total TRU NIAGEN®, Consumer Product $ 7,454 $ - $ - $ 7,454 NIAGEN® Ingredient - 1,110 - 1,110 Subtotal NIAGEN Related $ 7,454 $ 1,110 $ - $ 8,564 Other Ingredients - 384 - 384 Reference Standards - - 830 830 Consulting and Other - - 270 270 Subtotal Other Goods and Services $ - $ 384 $ 1,100 $ 1,484 Total Net Sales $ 7,454 $ 1,494 $ 1,100 $ 10,048 Disclosure of major customers Major customers who accounted for more than 10% of the Company’s total sales were as follows: Three months ended Major Customers Mar. 31, 2020 Mar. 31, 2019 A.S. Watson Group - Related Party 12.7 % 12.8 % Life Extension 10.4 % * * Represents less than 10%. Major accounts which had more than 10% of the Company’s total trade receivables were as follows: Percentage of the Company's Total Trade Receivables Major Accounts At March 31, 2020 At December 31, 2019 Life Extension 29.9 % 27.4 % Amazon Marketplaces 15.3 % 10.3 % A.S. Watson Group - Related Party 13.2 % 39.0 % Thorne Research 11.8 % * * Represents less than 10%. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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. On March 19, 2020, in light of the global COVID-19 pandemic and ongoing private mediation efforts, the parties jointly stipulated to adjourn the trial date. The Court vacated the trial date on March 20, 2020. On May 6, 2020, the Court scheduled a status conference for June 9, 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 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 were both granted after respective stipulations. On March 12, 2020, Elysium Health answered the second amended complaint. On March 13, 2020, ChromaDex, Inc. filed an answer and objection to Elysium Health’s third amended counterclaims. 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 March 31, 2020, 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. On March 19, 2020, the Delaware court entered a scheduling order, which, among other things, set the claim-construction hearing for December 17, 2020 and trial for the week of September 27, 2021. On April 17, 2020, ChromaDex, Inc. served infringement contentions. On April 24, 2020, ChromaDex, Inc. moved for leave to amend the complaint to add Healthspan Research, LLC as a plaintiff. On May 5, 2020, Elysium filed its opposition to ChromaDex, Inc.’s motion for leave to amend and moved to dismiss ChromaDex, Inc. for alleged lack of standing. ChromaDex, Inc. will file its opposition to Elysium’s motion to dismiss on May 19, 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. On March 13, 2020 the case was dismissed with prejudice. 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. Contingencies In September 2019, the Company received a letter from a licensor stating that the Company owed the licensor $1.6 million plus interest of sublicense fees as a result of the Company entering into the supply agreement with a customer. After reviewing the relevant facts and circumstances, the Company believes that the Company does not owe any sublicense fees to the licensor and has corresponded with the licensor to resolve the matter. The Company does not believe that the ultimate resolution of this matter will be material to the Company’s results of operations, financial condition or cash flows. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent to the period ended March 31, 2020, the Company entered into a private placement with related parties and sold approximately 1.2 million shares for $5.0 million at $4.08 per share. The selling price was determined by the average closing price over the ten trading days immediately preceding the date of private placement. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation |
Recent accounting standards | Recent accounting standards |
Earnings Per Share Applicable_2
Earnings Per Share Applicable to Common Stockholders (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Loss per share amounts applicable to common stockholders | Three Months Ended (In thousands, except per share data) Mar. 31, 2020 Mar. 31, 2019 Net loss $ (5,902 ) $ (8,337 ) Basic and diluted loss per common share $ (0.10 ) $ (0.15 ) Basic and diluted weighted average common shares outstanding (1): 59,782 55,325 Potentially dilutive securities (2): Stock options 12,194 10,078 Warrants - 140 (1) Includes approximately 0.2 million and 0.2 million nonvested restricted stock for the periods ending March 31, 2020 and March 31, 2019, respectively, which are participating securities that feature voting and dividend rights. (2) Excluded from the computation of loss per share as their impact is antidilutive. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Net amount of assets and liabilities acquired | Net sales Three months ended Mar. 31, 2020 Net sales Three months ended Mar. 31, 2019 Trade receivable at Mar. 31, 2020 Trade receivable at Dec. 31, 2019 A.S. Watson Group $1.8 million $1.3 million $0.5 million $0.8 million Horizon Ventures - - - - Total $1.8 million $1.3 million $0.5 million $0.8 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. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | (In thousands) Mar. 31, 2020 Dec. 31, 2019 Bulk ingredients $ 112 $ 1,364 Reference standards 632 635 Consumer Products - Finished Goods 5,260 4,877 Consumer Products - Work in Process 5,276 4,659 $ 11,280 $ 11,535 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Lease costs | For the Three Months Ended Mar. 31, 2020 For the Three Months Ended Mar. 31, 2019 Operating leases Operating lease expense $ 120 $ 180 Variable lease expense 69 55 Operating lease expense 189 235 Short-term lease rent expense 64 2 Total expense $ 253 $ 237 For the Three Months Ended Mar. 31, 2020 For the Three Months Ended Mar. 31, 2019 (In thousands) Finance leases Amortization of equipment assets $ 28 $ 21 Interest on lease liabilities 6 7 Total expenses $ 34 $ 28 |
Additional lease information | At Mar. 31, 2020 Weighted-average remaining lease term (years) – operating leases 1.7 Weighted-average discount rate – operating leases 8.0 % At Mar. 31, 2020 Weighted-average remaining lease term (years) – finance leases 1.1 Weighted-average discount rate – finance leases 8.3 % |
Minimum future lease payments under operating leases | (In thousands) Nine months ending December 31, 2020 $ 517 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 1,438 Less present value discount 137 Operating lease liabilities 1,301 Less current portion 614 Long-term obligations under operating leases $ 687 |
Minimum future lease payments under finance leases | (In thousands) Nine Months Ending December 31, 2020 $ 204 Year Ending December 31, 2021 29 Year Ending December 31, 2022 21 Total 254 Less present value discount 12 Finance lease liabilities 242 Less current portion 206 Long-term obligations under finance leases $ 36 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Weighted average assumptions of stock options granted | Three months Ended March 31, 2020 Expected term 6 years Expected volatility 66 % Risk-free rate 1 % Expected dividends 0 % |
Stock option activity | Service Period Based Stock Options Weighted Average Remaining Aggregate Number of Exercise Contractual Fair Intrinsic Shares Price Term (Years) Value Value Outstanding at Dec. 31, 2019 9,509 $ 3.86 6.9 Options Granted 1,916 3.50 10.0 $ 2.06 Options Exercised (28 ) 3.81 $ 19 Options Forfeited (394 ) 3.29 Outstanding at Mar. 31, 2020 11,003 $ 3.82 7.0 $ 1,288 * Exercisable at Mar. 31, 2020 6,486 $ 3.77 5.4 $ 1,259 * *The aggregate intrinsic values in the table above are based on the Company’s stock price of $3.26, which is the closing price of the Company’s stock on the last day of business for the period ended March 31, 2020. Performance Based Stock Options Weighted Average Remaining Aggregate Number of Exercise Contractual Fair Intrinsic Shares Price Term (Years) Value Value Outstanding at Dec. 31, 2019 42 $ 1.89 3.1 Options Granted 164 4.34 4.0 $ 2.26 Options Exercised (15 ) 1.89 $ 42 Options Forfeited - - Outstanding at Mar. 31, 2020 191 $ 4.00 3.7 $ 36 * Exercisable at Mar. 31, 2020 26 $ 1.89 2.8 $ 36 * *The aggregate intrinsic values in the table above are based on the Company’s stock price of $3.26, which is the closing price of the Company’s stock on the last day of business for the period ended March 31, 2020. |
Share-based compensation | Three months ending (In thousands) Mar. 31, 2020 Mar. 31, 2019 Share-based compensation expense Cost of sales $ 33 $ 26 Sales and marketing 232 120 Research and development 138 123 General and administrative 1,470 1,760 Total $ 1,873 $ 2,029 |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Business segmentation | Three months ended Consumer Analytical Reference March 31, 2020 Products Ingredients Standards and Corporate (In thousands) segment segment Services segment and other Total Net sales $ 11,144 $ 2,475 $ 726 $ - $ 14,345 Cost of sales 4,302 1,056 676 - 6,034 Gross profit 6,842 1,419 50 - 8,311 Operating expenses: Sales and marketing 4,409 (84 ) 122 - 4,447 Research and development 782 137 - - 919 General and administrative - - - 8,835 8,835 Operating expenses 5,191 53 122 8,835 14,201 Operating income (loss) $ 1,651 $ 1,366 $ (72 ) $ (8,835 ) $ (5,890 ) Three months ended Consumer Analytical Reference March 31, 2019 Products Ingredients Standards and Corporate (In thousands) segment segment Services segment and other Total Net sales $ 7,454 $ 1,494 $ 1,100 $ - $ 10,048 Cost of sales 3,071 813 863 - 4,747 Gross profit 4,383 681 237 - 5,301 Operating expenses: Sales and marketing 3,917 112 145 - 4,174 Research and development 969 199 - - 1,168 General and administrative - - - 8,331 8,331 Operating expenses 4,886 311 145 8,331 13,673 Operating income (loss) $ (503 ) $ 370 $ 92 $ (8,331 ) $ (8,372 ) Consumer Analytical Reference At March 31, 2020 Products Ingredients Standards and Corporate (In thousands) segment segment Services segment and other Total Total assets $ 13,306 $ 1,771 $ 897 $ 19,636 $ 35,610 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 |
Disaggregation of revenue | Three Months Ended March 31, 2020 (In thousands) Consumer Products Segment Ingredients Segment Analytical Reference Standards and Services Segment Total TRU NIAGEN®, Consumer Product $ 11,144 $ - $ - $ 11,144 NIAGEN® Ingredient - 1,961 - 1,961 Subtotal NIAGEN Related $ 11,144 $ 1,961 $ - $ 13,105 Other Ingredients - 514 - 514 Reference Standards - - 673 673 Consulting and Other - - 53 53 Subtotal Other Goods and Services $ - $ 514 $ 726 $ 1,240 Total Net Sales $ 11,144 $ 2,475 $ 726 $ 14,345 Three Months Ended March 31, 2019 (In thousands) Consumer Products Segment Ingredients Segment Analytical Reference Standards and Services Segment Total TRU NIAGEN®, Consumer Product $ 7,454 $ - $ - $ 7,454 NIAGEN® Ingredient - 1,110 - 1,110 Subtotal NIAGEN Related $ 7,454 $ 1,110 $ - $ 8,564 Other Ingredients - 384 - 384 Reference Standards - - 830 830 Consulting and Other - - 270 270 Subtotal Other Goods and Services $ - $ 384 $ 1,100 $ 1,484 Total Net Sales $ 7,454 $ 1,494 $ 1,100 $ 10,048 |
Disclosure of major customers | Major customers who accounted for more than 10% of the Company’s total sales were as follows: Three months ended Major Customers Mar. 31, 2020 Mar. 31, 2019 A.S. Watson Group - Related Party 12.7 % 12.8 % Life Extension 10.4 % * * Represents less than 10%. Major accounts which had more than 10% of the Company’s total trade receivables were as follows: Percentage of the Company's Total Trade Receivables Major Accounts At March 31, 2020 At December 31, 2019 Life Extension 29.9 % 27.4 % Amazon Marketplaces 15.3 % 10.3 % A.S. Watson Group - Related Party 13.2 % 39.0 % Thorne Research 11.8 % * * Represents less than 10%. |
Liquidity (Details Narrative)
Liquidity (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash flows from operating activities | $ (5,221) | $ (3,048) | ||
Cash and cash equivalents | $ 13,608 | $ 19,327 | $ 18,812 | $ 22,616 |
Earnings Per Share Applicable_3
Earnings Per Share Applicable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | ||
Net loss | $ (5,902) | $ (8,337) | |
Basic and diluted loss per common share | $ (0.10) | $ (0.15) | |
Basic and diluted weighted average common shares outstanding | [1] | 59,782 | 55,325 |
Stock Option | |||
Potentially dilutive securities (in thousands) | [2] | 12,194 | 10,078 |
Warrant | |||
Potentially dilutive securities (in thousands) | [2] | 0 | 140 |
[1] | Includes approximately 0.2 million and 0.2 million nonvested restricted stock for the periods ending March 31, 2020 and March 31, 2019, respectively, which are participating securities that feature voting and dividend rights. | ||
[2] | Excluded from the computation of loss per share as their impact is antidilutive. |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | ||
Net sales | $ 1,800 | $ 1,300 | ||
Trade receivable | 500 | $ 800 | ||
A.S. Watson Group | ||||
Net sales | [1] | 1,800 | 1,300 | |
Trade receivable | [1] | 500 | 800 | |
Horizon Ventures | ||||
Net sales | [1] | 0 | $ 0 | |
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. |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Bulk ingredients | $ 112 | $ 1,364 |
Reference standards | 632 | 635 |
Consumer products - finished goods | 5,260 | 4,877 |
Consumer Products - work in process | 5,276 | 4,659 |
Inventories | $ 11,280 | $ 11,535 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating leases | ||
Operating lease expense | $ 120 | $ 180 |
Variable lease expense | 69 | 55 |
Operating lease expense | 189 | 235 |
Short-term lease rent expense | 64 | 2 |
Total expense | 253 | 237 |
Amortization of equipment assets | 28 | 21 |
Interest on lease liabilities | 6 | 7 |
Total expenses | $ 34 | $ 28 |
Leases (Details 1)
Leases (Details 1) | Mar. 31, 2020 |
Leases [Abstract] | |
Weighted-average remaining lease term (years) - operating leases | 1 year 8 months 12 days |
Weighted-average discount rate - operating leases | 8.00% |
Weighted-average remaining lease term (years) - finance leases | 1 year 1 month 6 days |
Weighted-average discount rate - finance leases | 8.30% |
Leases (Details 2)
Leases (Details 2) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Nine months ending December 31, 2020 | $ 517 | |
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 | 1,438 | |
Less present value discount | 137 | |
Operating lease liabilities | 1,301 | |
Less current portion | 614 | $ 595 |
Long-term obligations under operating leases | $ 687 | $ 848 |
Leases (Details 3)
Leases (Details 3) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Nine months ending December 31, 2020 | $ 204 | |
Year ending December 31, 2021 | 29 | |
Year ending December 31, 2022 | 21 | |
Total | 254 | |
Less present value discount | (12) | |
Finance lease liabilities | 242 | |
Less current portion | 206 | $ 258 |
Long-term obligations under finance leases | $ 36 | $ 18 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Operating lease assets | $ 799 | $ 891 |
Operating lease liabilities | 1,301 | |
Finance lease assets | 700 | |
Finance lease liabilities | $ 242 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Expected term | 6 years |
Expected volatility | 66.00% |
Risk-free rate | 1.00% |
Expected dividends | 0.00% |
Share-Based Compensation (Det_2
Share-Based Compensation (Details 1) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)$ / sharesshares | ||
Service Period Based Stock Options | ||
Stock Options | ||
Outstanding, beginning (in thousands) | shares | 9,509 | |
Options granted (in thousands) | shares | 1,916 | |
Options exercised (in thousands) | shares | (28) | |
Options forfeited (in thousands) | shares | (394) | |
Outstanding, ending (in thousands) | shares | 11,003 | |
Exercisable (in thousands) | shares | 6,486 | |
Weighted Average Exercise Price | ||
Outstanding, beginning | $ 3.86 | |
Options granted | 3.50 | |
Options exercised | 3.81 | |
Options forfeited | 3.29 | |
Outstanding, ending | 3.82 | |
Exercisable | $ 3.77 | |
Weighted Average Remaining Contractual Term | ||
Outstanding, beginning | 6 years 10 months 24 days | |
Options granted | 10 years | |
Outstanding, ending | 7 years | |
Exercisable | 5 years 4 months 24 days | |
Weighted Average Fair Value | ||
Weighted average fair value option granted | $ 2.06 | |
Aggregate Intrinsic Value | ||
Exercised | $ | $ 19 | |
Outstanding | $ | 1,288 | [1] |
Exercisable | $ | $ 1,259 | [1] |
Performance Based Stock Options | ||
Stock Options | ||
Outstanding, beginning (in thousands) | shares | 42 | |
Options granted (in thousands) | shares | 164 | |
Options exercised (in thousands) | shares | (15) | |
Options forfeited (in thousands) | shares | 0 | |
Outstanding, ending (in thousands) | shares | 191 | |
Exercisable (in thousands) | shares | 26 | |
Weighted Average Exercise Price | ||
Outstanding, beginning | $ 1.89 | |
Options granted | 4.34 | |
Options exercised | 1.89 | |
Options forfeited | .00 | |
Outstanding, ending | 4 | |
Exercisable | $ 1.89 | |
Weighted Average Remaining Contractual Term | ||
Outstanding, beginning | 3 years 1 month 6 days | |
Options granted | 4 years | |
Outstanding, ending | 3 years 8 months 12 days | |
Exercisable | 2 years 9 months 18 days | |
Weighted Average Fair Value | ||
Weighted average fair value option granted | $ 2.26 | |
Aggregate Intrinsic Value | ||
Exercised | $ | $ 42 | |
Outstanding | $ | 36 | [2] |
Exercisable | $ | $ 36 | [2] |
[1] | The aggregate intrinsic values in the table above are based on the Company's stock price of $3.26, which is the closing price of the Company's stock on the last day of business for the period ended March 31, 2020. | |
[2] | Represents less than 10%. |
Share-Based Compensation (Det_3
Share-Based Compensation (Details 2) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based compensation | $ 1,873 | $ 2,029 |
Cost of Sales | ||
Share-based compensation | 33 | 26 |
Sales and Marketing | ||
Share-based compensation | 232 | 120 |
Research and Development | ||
Share-based compensation | 138 | 123 |
General and Administrative | ||
Share-based compensation | $ 1,470 | $ 1,760 |
Share-Based Compensation (Det_4
Share-Based Compensation (Details Narrative) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($)$ / shares | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Share price | $ / shares | $ 3.26 |
Unrecognized compensation expense | $ | $ 9,800 |
Unrecognized compensation expense recognition period | 2 years |
Business Segments (Details)
Business Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Net sales | $ 14,345 | $ 10,048 | |
Cost of sales | 6,034 | 4,747 | |
Gross profit | 8,311 | 5,301 | |
Operating expenses: | |||
Sales and marketing | 4,447 | 4,174 | |
Research and development | 919 | 1,168 | |
General and administrative | 8,835 | 8,331 | |
Operating expenses | 14,201 | 13,673 | |
Operating income (loss) | (5,890) | (8,372) | |
Total assets | 35,610 | $ 40,247 | |
Consumer Products Segment | |||
Net sales | 11,144 | 7,454 | |
Cost of sales | 4,302 | 3,071 | |
Gross profit | 6,842 | 4,383 | |
Operating expenses: | |||
Sales and marketing | 4,409 | 3,917 | |
Research and development | 782 | 969 | |
General and administrative | 0 | 0 | |
Operating expenses | 5,191 | 4,886 | |
Operating income (loss) | 1,651 | (503) | |
Total assets | 13,306 | 12,137 | |
Ingredients Segment | |||
Net sales | 2,475 | 1,494 | |
Cost of sales | 1,056 | 813 | |
Gross profit | 1,419 | 681 | |
Operating expenses: | |||
Sales and marketing | (84) | 112 | |
Research and development | 137 | 199 | |
General and administrative | 0 | 0 | |
Operating expenses | 53 | 311 | |
Operating income (loss) | 1,366 | 370 | |
Total assets | 1,771 | 2,135 | |
Analytical Reference Standards and Services Segment | |||
Net sales | 726 | 1,100 | |
Cost of sales | 676 | 863 | |
Gross profit | 50 | 237 | |
Operating expenses: | |||
Sales and marketing | 122 | 145 | |
Research and development | 0 | 0 | |
General and administrative | 0 | 0 | |
Operating expenses | 122 | 145 | |
Operating income (loss) | (72) | 92 | |
Total assets | 897 | 918 | |
Corporate and 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 | 8,835 | 8,331 | |
Operating expenses | 8,835 | 8,331 | |
Operating income (loss) | (8,835) | $ (8,331) | |
Total assets | $ 19,636 | $ 25,057 |
Business Segments (Details 1)
Business Segments (Details 1) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net sales | $ 14,345 | $ 10,048 |
Consumer Products Segment | ||
Net sales | 11,144 | 7,454 |
Ingredients Segment | ||
Net sales | 2,475 | 1,494 |
Analytical Reference Standards and Services Segment | ||
Net sales | 726 | 1,100 |
TRU NIAGEN Consumer Product | ||
Net sales | 11,144 | 7,454 |
TRU NIAGEN Consumer Product | Consumer Products Segment | ||
Net sales | 11,144 | 7,454 |
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 | 1,961 | 1,110 |
NIAGEN Ingredient | Consumer Products Segment | ||
Net sales | 0 | 0 |
NIAGEN Ingredient | Ingredients Segment | ||
Net sales | 1,961 | 1,110 |
NIAGEN Ingredient | Analytical Reference Standards and Services Segment | ||
Net sales | 0 | 0 |
NIAGEN Related | ||
Net sales | 13,105 | 8,564 |
NIAGEN Related | Consumer Products Segment | ||
Net sales | 11,144 | 7,454 |
NIAGEN Related | Ingredients Segment | ||
Net sales | 1,961 | 1,110 |
NIAGEN Related | Analytical Reference Standards and Services Segment | ||
Net sales | 0 | 0 |
Other Ingredients | ||
Net sales | 514 | 384 |
Other Ingredients | Consumer Products Segment | ||
Net sales | 0 | 0 |
Other Ingredients | Ingredients Segment | ||
Net sales | 514 | 384 |
Other Ingredients | Analytical Reference Standards and Services Segment | ||
Net sales | 0 | 0 |
Reference Standards | ||
Net sales | 673 | 830 |
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 | 673 | 830 |
Consulting and Other | ||
Net sales | 53 | 270 |
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 | 53 | 270 |
Other Goods and Services | ||
Net sales | 1,240 | 1,484 |
Other Goods and Services | Consumer Products Segment | ||
Net sales | 0 | 0 |
Other Goods and Services | Ingredients Segment | ||
Net sales | 514 | 384 |
Other Goods and Services | Analytical Reference Standards and Services Segment | ||
Net sales | $ 726 | $ 1,100 |
Business Segments (Details 2)
Business Segments (Details 2) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |||
Sales Revenue, Net | A.S. Watson Group | |||||
Customer concentration risk | 12.70% | 12.80% | |||
Sales Revenue, Net | Life Extension | |||||
Customer concentration risk | 10.40% | [1] | |||
Trade Receivables | A.S. Watson Group | |||||
Customer concentration risk | 13.20% | 39.00% | |||
Trade Receivables | Life Extension | |||||
Customer concentration risk | 29.90% | 27.40% | |||
Trade Receivables | Amazon Marketplaces | |||||
Customer concentration risk | 15.30% | 10.30% | |||
Trade Receivables | Thorne Research | |||||
Customer concentration risk | 11.80% | [1] | |||
[1] | Represents less than 10%. |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) - Private Placement [Member] | 1 Months Ended |
May 10, 2020USD ($)$ / sharesshares | |
Shares sold in private placement | shares | 1,200,000 |
Private placement amount | $ | $ 5,000,000 |
Private placement price per share | $ / shares | $ 4.08 |