ChromaDex (CDXC) 10-Q 12 May 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Apr. 02, 2016	May. 11, 2016
Document And Entity Information
Entity Registrant Name	ChromaDex Corp.
Entity Central Index Key	1,386,570
Document Type	10-Q
Document Period End Date	Apr. 2, 2016
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 Common Stock, Shares Outstanding		36,554,481
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,016

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Apr. 02, 2016	Jan. 02, 2016
Current Assets
Cash	$ 2,995,506	$ 5,549,672
Trade receivables, net of allowances of $339,000 and $367,000, respectively	4,330,115	2,450,591
Inventories	6,688,920	8,173,799
Prepaid expenses and other assets	359,642	373,567
Total current assets	14,374,183	16,547,629
Leasehold improvements and equipment, net	1,722,768	1,788,645
Deposits	58,726	58,883
Intangible assets, net	357,741	354,052
Longterm investment	20,318	0
Total assets	16,533,736	18,749,209
Current Liabilities
Accounts payable	2,905,105	6,223,958
Accrued expenses	1,350,860	1,302,865
Current maturities of loan payable	1,866,713	1,528,578
Current maturities of capital lease obligations	218,919	219,689
Customer deposits and other	339,600	272,002
Deferred rent, current	26,143	39,529
Total current liabilities	6,707,340	9,586,621
Loan payable, less current maturities, net	2,913,854	3,345,335
Capital lease obligations, less current maturities	391,817	444,589
Deferred rent, less current	92,519	97,990
Total Liabilities	10,105,530	13,474,535
Commitments and contingencies	0	0
Stockholders' Equity
Common stock, $.001 par value; authorized 50,000,000 shares; issued and outstanding April 2, 2016 36,180,849 and January 2, 2016 36,003,589 shares	36,181	36,004
Additional paid-in capital	48,431,789	47,534,059
Accumulated deficit	(42,039,764)	(42,295,389)
Total stockholders' equity	6,428,206	5,274,674
Total liabilities and stockholders' equity	$ 16,533,736	$ 18,749,209

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Apr. 02, 2016	Jan. 02, 2016
Statement of Financial Position [Abstract]
Allowance for doubtful accounts and returns	$ 339,000	$ 367,000
Common Stock, Par Value Per Share	$ 0.001	$ 0.001
Common Stock, Shares Authorized	50,000,000	50,000,000
Common Stock, Shares, Issued	36,180,849	36,003,589
Common Stock, Shares, Outstanding	36,180,849	36,003,589

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)		3 Months Ended
		Apr. 02, 2016	Apr. 04, 2015
Income Statement [Abstract]
Sales, net		$ 7,331,945	$ 5,260,971
Cost of sales		3,880,526	3,333,347
Gross profit		3,451,419	1,927,624
Operating expenses:
Sales and marketing		544,722	585,777
Research and development		464,072	121,095
General and administrative		1,988,559	2,126,836
Operating expenses		2,997,353	2,833,708
Operating income (loss)		454,066	(906,084)
Nonoperating income (expense):
Interest income		794	718
Interest expense		(188,495)	(120,149)
Nonoperating expenses		(187,701)	(119,431)
Income (loss) before taxes		266,365	(1,025,515)
Provision for taxes		(10,740)	0
Net income (loss)		$ 255,625	$ (1,025,515)
Basic earnings (loss) per common share		$ 0.01	$ (0.03)
Diluted earnings (loss) per common share		$ 0.01	$ (0.03)
Basic weighted average common shares outstanding	[1]	36,414,041	35,732,866
Diluted weighted average common shares outstanding		37,472,579	35,732,866
[1]	Includes 373,289 and 518,029 weighted average nonvested shares of restricted stock for the three months ended April 2, 2016 and April 4, 2015, respectively, which are participating securities that feature voting and dividend rights.

Condensed Consolidated Stateme5

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - 3 months ended Apr. 02, 2016 - USD ($)	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Total
Beginning Balance, Shares at Jan. 02, 2016	36,003,589
Beginning Balance, Amount at Jan. 02, 2016	$ 36,004	$ 47,534,059	$ (42,295,389)	$ 5,274,674
Issuance of common stock, net of offering costs of $20,000, Shares	128,205
Issuance of common stock, net of offering costs of $20,000, Amount	$ 128	479,872		$ 480,000
Exercise of stock options, Shares	47,055			(41,667)
Exercise of stock options, Amount	$ 47	93,825		$ 93,872
Share-based compensation, Shares
Share-based compensation, Amount		324,035		$ 324,035
Vested restricted stock, shares	2,000
Vested restricted stock, Amount	$ 2	$ (2)
Net income			$ 255,625	$ 255,625
Ending Balance, Shares at Apr. 02, 2016	36,180,849
Ending Balance, Amount at Apr. 02, 2016	$ 36,181	$ 48,431,789	$ (42,039,764)	$ 6,428,206

Condensed Consolidated Stateme6

Condensed Consolidated Statement of Stockholders' Equity (Parenthetical)	3 Months Ended
	Apr. 02, 2016USD ($)
Statement of Stockholders' Equity [Abstract]
Net offering costs	$ 20,000

Condensed Consolidated Stateme7

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Cash Flows From Operating Activities
Net income (loss)	$ 255,625	$ (1,025,515)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of leasehold improvements and equipment	82,506	66,902
Amortization of intangibles	11,311	10,124
Share-based compensation expense	324,035	715,909
Allowance for doubtful trade receivables	$ (28,785)	13,526
Loss from disposal of equipment		17,475
Non-cash financing costs	$ 53,449	46,948
Changes in operating assets and liabilities:
Trade receivables	(1,850,739)	(341,270)
Inventories	1,464,561	502,645
Prepaid expenses and other assets	14,082	(81,584)
Accounts payable	(3,318,853)	(810,658)
Accrued expenses	47,995	149,894
Customer deposits and other	67,598	158,917
Deferred rent	(18,857)	(14,371)
Net cash used in operating activities	(2,896,072)	(591,058)
Cash Flows From Investing Activities
Purchases of leasehold improvements and equipment	(16,629)	(95,778)
Purchases of intangible assets	(15,000)	(5,000)
Net cash used in investing activities	(31,629)	(100,778)
Cash Flows From Financing Activities
Proceeds from issuance of common stock, net of issuance costs	480,000	0
Proceeds from exercise of stock options	93,872	0
Principal payments on loan payable	(146,795)	0
Principal payments on capital leases	(53,542)	(57,075)
Net cash provided by (used in) financing activities	373,535	(57,075)
Net decrease in cash	(2,554,166)	(748,911)
Cash Beginning of Period	5,549,672	3,964,750
Cash Ending of Period	2,995,506	3,215,839
Supplemental Disclosures of Cash Flow Information
Cash payments for interest	135,046	73,202
Supplemental Schedule of Noncash Investing Activity
Capital lease obligation incurred for purchases of equipment	0	303,933
Inventory supplied free of charge to Healthspan Research, LLC	20,318	0
Retirement of fully depreciated equipment - cost	26,666	0
Retirement of fully depreciated equipment - accumulated depreciation	$ (26,666)	$ 0

Interim Financial Statements

Interim Financial Statements	3 Months Ended
	Apr. 02, 2016
Interim Financial Statements
Interim Financial Statements	The accompanying financial statements of ChromaDex Corporation (the “Company”) and its wholly owned subsidiaries, ChromaDex, Inc., ChromaDex Analytics, Inc. and Spherix Consulting, Inc. 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 April 2, 2016 and results of operations and cash flows for the three months ended April 2, 2016 and April 4, 2015. 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 January 2, 2016 appearing in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “Commission”) on March 17, 2016. Operating results for the three months ended April 2, 2016 are not necessarily indicative of the results to be achieved for the full year ending on December 31, 2016. 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 January 2, 2016 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 and Liquidit

Nature of Business and Liquidity	3 Months Ended
	Apr. 02, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Business and Liquidity	Nature of business Liquidity While we anticipate that our current cash, cash equivalents and cash to be generated from operations will be sufficient to meet our projected operating plans through at least May 13, 2017, we may require additional funds, either through additional equity or debt financings or collaborative agreements or from other sources. We have no commitments to obtain such additional financing, and we may not be able to obtain any such additional financing on terms favorable to us, or at all. If adequate financing is not available, the Company will further delay, postpone or terminate product and service expansion and curtail certain selling, general and administrative operations. The inability to raise additional financing may have a material adverse effect on the future performance of the Company.

Significant Accounting Policies

Significant Accounting Policies	3 Months Ended
	Apr. 02, 2016
Accounting Policies [Abstract]
Significant Accounting Policies	Basis of presentation Inventories April 2, 2016 January 2, 2016 Natural product fine chemicals $ 1,094,083 $ 1,239,338 Bulk ingredients 5,714,837 7,195,461 6,808,920 8,434,799 Less valuation allowance (120,000) (261,000) $ 6,688,920 $ 8,173,799

Reverse Stock Split

Reverse Stock Split	3 Months Ended
	Apr. 02, 2016
Stockholders' Equity Note [Abstract]
Reverse Stock Split	On April 13, 2016, the Company effected a 1 for 3 reverse stock split. All information presented herein has been retrospectively adjusted to reflect the reverse stock split as if they took place as of the earliest period presented. An additional 1,632 shares were issued to round up fractional shares as a result of the reverse stock split.

Earnings Per Share Applicable t

Earnings Per Share Applicable to Common Stockholders	3 Months Ended
	Apr. 02, 2016
Earnings Per Share Applicable To Common Stockholders
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 April 2, 2016 and April 4, 2015: Three Months Ended April 2, 2016 April 4, 2015 Net income (loss) $ 255,625 $ (1,025,515 ) Basic weighted average common shares outstanding (1): 36,414,041 35,732,866 Basic earnings (loss) per common share $ 0.01 $ (0.03 ) Dilutive effect of stock options, net 1,024,428 — Dilutive effect of warrants, net 34,110 — Diluted weighted average common shares outstanding : 37,472,579 35,732,866 Diluted earnings (loss) per common share $ 0.01 $ (0.03 ) Potentially dilutive securities, total (2): Stock options 5,203,419 4,715,657 Warrants 487,110 156,340 Convertible debt (3) 257,798 257,798 (1) Includes 373,289 and 518,029 weighted average nonvested shares of restricted stock for the three months ended April 2, 2016 and April 4, 2015, respectively, which are participating securities that feature voting and dividend rights. (2) Excluded from the computation of diluted loss per share for the three month period ended April 4, 2015 as their impact is antidilutive. (3) Excluded from the computation of diluted earnings per share for the three month period ended April 2, 2016 as its impact is antidilutive.

Leasehold Improvements and Equi

Leasehold Improvements and Equipment	3 Months Ended
	Apr. 02, 2016
Leasehold Improvements And Equipment
Leasehold Improvements and Equipment	Leasehold improvements and equipment consisted of the following: April 2, 2016 January 2, 2016 Laboratory equipment $ 3,743,330 $ 3,737,908 Leasehold improvements 513,453 513,453 Computer equipment 384,120 404,228 Furniture and fixtures 17,056 17,056 Office equipment 24,805 21,547 Construction in progress 5,811 4,420 4,688,575 4,698,612 Less accumulated depreciation 2,965,807 2,909,967 $ 1,722,768 $ 1,788,645 Depreciation expense on leasehold improvements and equipment included in the consolidated statement of operations for the three months ended April 2, 2016 and April 4, 2015 was approximately $83,000 and $67,000, respectively.

Loan Payable

Loan Payable	3 Months Ended
	Apr. 02, 2016
Debt Disclosure [Abstract]
Loan Payable	Loan payable as of April 2, 2016 consists of the following: Principal amount payable for following years ending December 2016 $ 1,223,659 2017 1,991,688 2018 1,637,858 Total principal payments 4,853,205 Accrued end of term charge 88,436 Total loan payable 4,941,641 Less unamortized debt issuance costs and debt discount 161,074 Less current portion 1,866,713 Loan payable – long term $ 2,913,854 The total interest expenses related to the term loan, including cash interest payments, the amortizations of debt issuance costs and debt discount, and the accrual of the end of term charge were approximately $175,000 and $106,000 for the three months ended April 2, 2016 and April 4, 2015, respectively.

Share-Based Compensation

Share-Based Compensation	3 Months Ended
	Apr. 02, 2016
Share-based Compensation
Share-Based Compensation	Non-Employee Stock Option Plans The following table summarizes activity of stock options granted to non-employees at April 2, 2016 and changes during the three months then ended: Weighted Average Remaining Aggregate Number of Exercise Contractual Fair Intrinsic Shares Price Term Value Value Outstanding at January 2, 2016 864,174 $ 3.31 6.04 Options Granted - - - - Options Exercised (41,667) 1.92 Options Forfeited - - Outstanding at April 2, 2016 822,507 $ 3.38 5.76 $824,000 Exercisable at April 2, 2016 815,007 $ 3.37 5.73 $820,000 The aggregate intrinsic values in the table above are based on the Company’s stock price of $4.29, which is the closing price of the Company’s stock adjusted for the effect of 1 for 3 reverse split, on the last day of business for the period ended April 2, 2016. The aggregate intrinsic values for options exercised during the three months ended April 2, 2016 was approximately $98,000.

Stock Issuance

Stock Issuance	3 Months Ended
	Apr. 02, 2016
Stock Issuance
Stock Issuance	On March 11, 2016, the Company entered into Securities Purchase Agreement (“SPA”) with a certain existing stockholder to raise $500,000 in a registered direct offering. Pursuant to the SPA, the Company sold a total of 128,205 Units at a purchase price of $3.90 per Unit, with each Unit consisting of one share of the Company’s common stock and a warrant to purchase one half of a share of common stock (64,103 total) with an exercise price of $4.80 and a term of 3 years. The estimated fair value of the warrant was approximately $108,000 and the warrant was determined to be classified as equity. The fair value was estimated at the date of issuance using the Black-Scholes based valuation model. The table below outlines the assumptions for the warrant issued. March 11, 2016 Fair value of common stock $4.41 Contractual term 3.0 years Volatility 60.00% Risk-free rate 1.16% Expected dividends 0.00%

Warrants

Warrants	3 Months Ended
	Apr. 02, 2016
Warrants
Warrants	The following table summarizes activity of warrants at April 2, 2016 and changes during the three months then ended: Weighted Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value Outstanding at January 2, 2016 423,007 $ 4.02 3.07 Warrants Issued 64,103 $ 4.80 Warrants Exercised - - Warrants Expired - - Outstanding and exercisable at April 2, 2016 487,110 $ 4.12 2.83 $171,000 The aggregate intrinsic value in the table above is based on the Company’s stock price of $4.29, which is the closing price of the Company’s stock adjusted for the effect of 1 for 3 reverse split, on the last day of business for the period ended April 2, 2016.

Business Segments

Business Segments	3 Months Ended
	Apr. 02, 2016
Business Segments
Business Segments	The Company has following three reportable segments. • Ingredients segment develops and commercializes proprietary-based ingredient technologies and supplies these ingredients to the manufacturers of consumer products in various industries including the nutritional supplement, food and beverage and animal health industries. • Core standards, and contract services segment includes supply of phytochemical reference standards, which are small quantities of plant-based compounds typically used to research an array of potential attributes, reference materials, and related contract services. • Scientific and regulatory consulting segment which consist of providing scientific and regulatory consulting to the clients in the food, supplement and pharmaceutical industries to manage potential health and regulatory risks. The “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 Core Standards and Scientific and April 2, 2016 Ingredients Contract Services Regulatory segment segment Consulting segment Other Total Net sales $ 4,600,626 $ 2,583,666 $ 147,653 $ - $ 7,331,945 Cost of sales 2,099,162 1,671,984 109,380 - 3,880,526 Gross profit 2,501,464 911,682 38,273 - 3,451,419 Operating expenses: Sales and marketing 331,743 209,379 3,600 - 544,722 Research and development 464,072 - - - 464,072 General and administrative - - - 1,988,559 1,988,559 Operating expenses 795,815 209,379 3,600 1,988,559 2,997,353 Operating income (loss) $ 1,705,649 $ 702,303 $ 34,673 $ (1,988,559) $ 454,066 Three months ended Core Standards and Scientific and April 4, 2015 Ingredients Contract Services Regulatory segment segment Consulting segment Other Total Net sales $ 2,680,341 $ 2,300,043 $ 280,587 $ - $ 5,260,971 Cost of sales 1,603,176 1,573,784 156,387 - 3,333,347 Gross profit 1,077,165 726,259 124,200 - 1,927,624 Operating expenses: Sales and marketing 274,624 310,944 209 - 585,777 Research and development 121,095 - - - 121,095 General and administrative - - - 2,126,836 2,126,836 Operating expenses 395,719 310,944 209 2,126,836 2,833,708 Operating income (loss) $ 681,446 $ 415,315 $ 123,991 $ (2,126,836) $ (906,084) Core Standards and Scientific and At April 2, 2016 Ingredients Contract Services Regulatory segment segment Consulting segment Other Total Total assets $ 9,566,763 $ 3,268,647 $ 89,354 $ 3,608,972 $ 16,533,736 Core Standards and Scientific and At January 2, 2016 Ingredients Contract Services Regulatory segment segment Consulting segment Other Total Total assets $ 9,105,502 $ 3,306,624 $ 111,765 $ 6,225,318 $ 18,749,209 Disclosure of major customers During the three months ended April 2, 2016, Customer C in our ingredients segment accounted for 27.4% of the Company’s total sales. For the three months ended April 4, 2015, we did not have any customers who accounted for more than 10% of the Company’s total sales.

Related-Party Transactions

Related-Party Transactions	3 Months Ended
	Apr. 02, 2016
Related Party Transactions [Abstract]
Related-Party Transactions	On August 28, 2015, the Company entered into an Exclusive Supply Agreement (the “Supply Agreement”) with Healthspan Research, LLC (“Healthspan”). Under the terms of the Supply Agreement, Healthspan agreed to purchase NIAGEN® from the Company and the Company granted to Healthspan worldwide rights for resale of specific dietary supplements containing NIAGEN® in certain markets. Pursuant to the terms of the Supply Agreement, in exchange for a 4% equity interest in Healthspan, the Company agreed to initially supply NIAGEN® to Healthspan free of charge and thereafter at a fixed price and, in exchange for an additional 5% equity interest in Healthspan, the Company will grant to Healthspan certain exclusive rights to resell NIAGEN® in certain direct response channels. Healthspan will pay the Company royalties on the cumulative worldwide net sales of its finished products containing NIAGEN®. The exclusivity rights will remain for so long as Healthspan meets certain minimum purchase requirements. In the event that, during the initial term, the Company terminates the exclusivity rights due to failure to meet the minimum purchase requirements or for any reason other than a material breach of the Supply Agreement by Healthspan, then the 5% equity interest shall be automatically redeemed for a purchase price of $1.00 effective upon the date of termination of the exclusivity rights. In connection with the foregoing, also on August 28, 2015, the Company and Healthspan entered into an interest purchase agreement and limited liability company agreement pursuant to which the Company was issued 9% of the outstanding equity interests of Healthspan. Rob Fried, a director of the Company, is the manager of Healthspan and owns 91% of the outstanding equity interests of Healthspan. The Supply Agreement, interest purchase agreement and limited liability company agreement were unanimously approved by the independent directors of the Company. During the three months ended April 2, 2016, the Company shipped NIAGEN® to Healthspanon a buy-one-get-one-free basis. Our cost of NIAGEN® supplied free of charge was approximately $20,000 and this was recorded as a long term investment at our cost. The Company has applied the cost method of accounting for this equity investment as the Company does not have an ability to exercise significant influence on Healthspan.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Apr. 02, 2016
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	On February 29, 2016, the Company entered into a lease amendment to extend the term of the lease for its laboratory facility located in Boulder, Colorado through April 2023. Pursuant to the lease amendment, the Company will make monthly lease payments ranging from $23,472 to $27,210, as the payments escalate during the term of the lease. On March 4, 2016, the Company entered into a lease amendment to lease an office space located in Rockville, Maryland through April 2021. Pursuant to the lease amendment, the Company will make monthly lease payments ranging from $3,450 to $3,883, as the payments escalate during the term of the lease. Subsequent to the three-month period ended April 2, 2016, the Company entered into a lease to lease an office and laboratory space located in Longmont, Colorado through September 2023. Pursuant to the lease, the Company will make monthly lease payments ranging from $8,586 to $11,518, as payments escalate during the term of the lease.

Significant Accounting Polici21

Significant Accounting Policies (Policy)	3 Months Ended
	Apr. 02, 2016
Accounting Policies [Abstract]
Basis of presentation	Basis of presentation
Inventories	Inventories April 2, 2016 January 2, 2016 Natural product fine chemicals $ 1,094,083 $ 1,239,338 Bulk ingredients 5,714,837 7,195,461 6,808,920 8,434,799 Less valuation allowance (120,000) (261,000) $ 6,688,920 $ 8,173,799

Significant Accounting Polici22

Significant Accounting Policies (Tables)	3 Months Ended
	Apr. 02, 2016
Accounting Policies [Abstract]
Inventories	April 2, 2016 January 2, 2016 Natural product fine chemicals $ 1,094,083 $ 1,239,338 Bulk ingredients 5,714,837 7,195,461 6,808,920 8,434,799 Less valuation allowance (120,000) (261,000) $ 6,688,920 $ 8,173,799

Earnings Per Share Applicable23

Earnings Per Share Applicable to Common Stockholders (Tables)	3 Months Ended
	Apr. 02, 2016
Earnings Per Share Applicable To Common Stockholders
Earnings per share amounts 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 April 2, 2016 and April 4, 2015: Three Months Ended April 2, 2016 April 4, 2015 Net income (loss) $ 255,625 $ (1,025,515 ) Basic weighted average common shares outstanding (1): 36,414,041 35,732,866 Basic earnings (loss) per common share $ 0.01 $ (0.03 ) Dilutive effect of stock options, net 1,024,428 — Dilutive effect of warrants, net 34,110 — Diluted weighted average common shares outstanding : 37,472,579 35,732,866 Diluted earnings (loss) per common share $ 0.01 $ (0.03 ) Potentially dilutive securities, total (2): Stock options 5,203,419 4,715,657 Warrants 487,110 156,340 Convertible debt (3) 257,798 257,798 (1) Includes 373,289 and 518,029 weighted average nonvested shares of restricted stock for the three months ended April 2, 2016 and April 4, 2015, respectively, which are participating securities that feature voting and dividend rights. (2) Excluded from the computation of diluted loss per share for the three month period ended April 4, 2015 as their impact is antidilutive. (3) Excluded from the computation of diluted earnings per share for the three month period ended April 2, 2016 as its impact is antidilutive.

Leasehold Improvements and Eq24

Leasehold Improvements and Equipment (Tables)	3 Months Ended
	Apr. 02, 2016
Leasehold Improvements And Equipment
Leasehold improvements and equipment	April 2, 2016 January 2, 2016 Laboratory equipment $ 3,743,330 $ 3,737,908 Leasehold improvements 513,453 513,453 Computer equipment 384,120 404,228 Furniture and fixtures 17,056 17,056 Office equipment 24,805 21,547 Construction in progress 5,811 4,420 4,688,575 4,698,612 Less accumulated depreciation 2,965,807 2,909,967 $ 1,722,768 $ 1,788,645

Loan Payable (Tables)

Loan Payable (Tables)	3 Months Ended
	Apr. 02, 2016
Debt Disclosure [Abstract]
Loan payable	Principal amount payable for following years ending December 2016 $ 1,223,659 2017 1,991,688 2018 1,637,858 Total principal payments 4,853,205 Accrued end of term charge 88,436 Total loan payable 4,941,641 Less unamortized debt issuance costs and debt discount 161,074 Less current portion 1,866,713 Loan payable – long term $ 2,913,854

Share-Based Compensation (Table

Share-Based Compensation (Tables)	3 Months Ended
	Apr. 02, 2016
Share-based Compensation Tables
Service Period Based Stock Options	Weighted Average Remaining Aggregate Number of Exercise Contractual Fair Intrinsic Shares Price Term Value Value Outstanding at January 2, 2016 864,174 $ 3.31 6.04 Options Granted - - - - Options Exercised (41,667) 1.92 Options Forfeited - - Outstanding at April 2, 2016 822,507 $ 3.38 5.76 $824,000 Exercisable at April 2, 2016 815,007 $ 3.37 5.73 $820,000

Stock Issuance (Tables)

Stock Issuance (Tables)	3 Months Ended
	Apr. 02, 2016
Stock Issuance
Outlines the assumptions for warrant issued	March 11, 2016 Fair value of common stock $4.41 Contractual term 3.0 years Volatility 60.00% Risk-free rate 1.16% Expected dividends 0.00%

Warrants (Tables)

Warrants (Tables)	3 Months Ended
	Apr. 02, 2016
Warrants
Activity of warrants	The following table summarizes activity of warrants at April 2, 2016 and changes during the three months then ended: Weighted Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value Outstanding at January 2, 2016 423,007 $ 4.02 3.07 Warrants Issued 64,103 $ 4.80 Warrants Exercised - - Warrants Expired - - Outstanding and exercisable at April 2, 2016 487,110 $ 4.12 2.83 $171,000

Business Segments (Tables)

Business Segments (Tables)	3 Months Ended
	Apr. 02, 2016
Business Segments Tables
Business Segmentation	Three months ended Core Standards and Scientific and April 2, 2016 Ingredients Contract Services Regulatory segment segment Consulting segment Other Total Net sales $ 4,600,626 $ 2,583,666 $ 147,653 $ - $ 7,331,945 Cost of sales 2,099,162 1,671,984 109,380 - 3,880,526 Gross profit 2,501,464 911,682 38,273 - 3,451,419 Operating expenses: Sales and marketing 331,743 209,379 3,600 - 544,722 Research and development 464,072 - - - 464,072 General and administrative - - - 1,988,559 1,988,559 Operating expenses 795,815 209,379 3,600 1,988,559 2,997,353 Operating income (loss) $ 1,705,649 $ 702,303 $ 34,673 $ (1,988,559) $ 454,066 Three months ended Core Standards and Scientific and April 4, 2015 Ingredients Contract Services Regulatory segment segment Consulting segment Other Total Net sales $ 2,680,341 $ 2,300,043 $ 280,587 $ - $ 5,260,971 Cost of sales 1,603,176 1,573,784 156,387 - 3,333,347 Gross profit 1,077,165 726,259 124,200 - 1,927,624 Operating expenses: Sales and marketing 274,624 310,944 209 - 585,777 Research and development 121,095 - - - 121,095 General and administrative - - - 2,126,836 2,126,836 Operating expenses 395,719 310,944 209 2,126,836 2,833,708 Operating income (loss) $ 681,446 $ 415,315 $ 123,991 $ (2,126,836) $ (906,084) Core Standards and Scientific and At April 2, 2016 Ingredients Contract Services Regulatory segment segment Consulting segment Other Total Total assets $ 9,566,763 $ 3,268,647 $ 89,354 $ 3,608,972 $ 16,533,736 Core Standards and Scientific and At January 2, 2016 Ingredients Contract Services Regulatory segment segment Consulting segment Other Total Total assets $ 9,105,502 $ 3,306,624 $ 111,765 $ 6,225,318 $ 18,749,209

Nature of Business and Liquid30

Nature of Business and Liquidity (Details Narrative) - USD ($)	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015	Jan. 02, 2016
Liquidity
Operating income (loss)	$ 454,066	$ (906,084)
Net income (loss)	255,625	(1,025,515)
Cash and cash equivalents	$ 2,995,506	$ 3,215,839	$ 5,549,672

Significant Accounting Polici31

Significant Accounting Policies (Details) - USD ($)	Apr. 02, 2016	Jan. 02, 2016
Inventories
Natural product fine chemicals	$ 1,094,083	$ 1,239,338
Bulk ingredients	5,714,837	7,195,461
Inventory-gross	6,808,920	8,434,799
Less valuation allowance	(120,000)	(261,000)
Inventory-net	$ 6,688,920	$ 8,173,799

Reverse Stock Split (Details Na

Reverse Stock Split (Details Narrative) - shares	Apr. 13, 2016	Apr. 02, 2016
Reverse Stock Split Details Narrative
Reverse stock split	1 for 3 reverse split	1 for 3 reverse split
Reverse stock split, Share Issued	1,632

Earnings Per Share Applicable33

Earnings Per Share Applicable to Common Stockholders (Details) - USD ($)		3 Months Ended
		Apr. 02, 2016		Apr. 04, 2015
Net income (loss)		$ 255,625		$ (1,025,515)
Earnings per share
Basic weighted average common shares outstanding	[1]	36,414,041		35,732,866
Basic earnings (loss) per common share		$ 0.01		$ (0.03)
Diluted weighted average common shares outstanding		37,472,579		35,732,866
Diluted earnings (loss) per common share		$ 0.01		$ (0.03)
Stock Option [Member]
Earnings per share
Diluted weighted average common shares outstanding		1,024,428
Potentially dilutive securities
Potentially dilutive securities		5,203,419		4,715,657	[2]
Warrant [Member]
Earnings per share
Diluted weighted average common shares outstanding		34,110
Potentially dilutive securities
Potentially dilutive securities		487,110		156,340	[2]
Convertible Debt [Member]
Earnings per share
Diluted weighted average common shares outstanding
Potentially dilutive securities
Potentially dilutive securities		257,798	[3]	257,798	[2]
[1]	Includes 373,289 and 518,029 weighted average nonvested shares of restricted stock for the three months ended April 2, 2016 and April 4, 2015, respectively, which are participating securities that feature voting and dividend rights.
[2]	Excluded from the computation of diluted loss per share for the three month period ended April 4, 2015 as their impact is antidilutive.
[3]	Excluded from the computation of diluted earnings per share for the three month period ended April 2, 2016 as its impact is antidilutive.

Earnings Per Share Applicable34

Earnings Per Share Applicable to Common Stockholders (Details) (Details Narrative) - shares	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Earnings Per Share Applicable To Common Stockholders Details Details Narrative
Weighted average nonvested shares of restricted stock	373,289	518,029

Leasehold Improvements and Eq35

Leasehold Improvements and Equipment (Details) - USD ($)	Apr. 02, 2016	Jan. 02, 2016
Leasehold improvements and equipment
Laboratory equipment	$ 3,743,330	$ 3,737,908
Leasehold improvements	513,453	513,453
Computer equipment	384,120	404,228
Furniture and fixtures	17,056	17,056
Office equipment	24,805	21,547
Construction in progress	5,811	4,420
Leasehold improvements and equipment, gross	4,688,575	4,698,612
Less accumulated depreciation	2,965,807	2,909,967
Leasehold improvements and equipment, total	$ 1,722,768	$ 1,788,645

Leasehold Improvements and Eq36

Leasehold Improvements and Equipment (Details Narrative) - USD ($)	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Leasehold Improvements And Equipment Details Narrative
Depreciation expense on leasehold improvements and equipment	$ 82,506	$ 66,902

Loan Payable - Loan payable (De

Loan Payable - Loan payable (Details) - USD ($)	Apr. 02, 2016	Jan. 02, 2016
Principal amount payable for following years ending December
2,016	$ 1,223,659
2,017	1,991,688
2,018	1,637,858
Total principal payments	4,853,205
Accrued end of term charge	88,436
Total loan payable	4,941,641
Less unamortized debt issuance costs and debt discount	161,074
Less current portion	1,866,713	$ 1,528,578
Loan payable - long term	$ 2,913,854	$ 3,345,335

Loan Payable (Details Narrative

Loan Payable (Details Narrative) - USD ($)	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015
Debt Disclosure [Abstract]
Total interest expenses	$ 175,000	$ 106,000

Share-Based Compensation - (Det

Share-Based Compensation - (Details)	3 Months Ended
	Apr. 02, 2016USD ($)$ / sharesshares
Non-Employee Share-Based Compensation- Options
Outstanding at Beginning of Period | shares	864,174
Options Granted | shares
Options Exercised | shares	(41,667)
Options Forfeited | shares
Outstanding at End of Period | shares	822,507
Exercisable at End of Period | shares	815,007
Weighted Average Exercise Price
Outstanding at Beginning of Period | $ / shares	$ 3.31
Options Granted | $ / shares
Options Exercised | $ / shares	$ 1.92
Options Forfeited | $ / shares
Outstanding at End of Period | $ / shares	$ 3.38
Exercisable at End of Period | $ / shares	$ 3.37
Weighted Average Remaining Contractual Term
Outstanding at Beginning of Period	6 years 15 days
Outstanding at End of Period	5 years 9 months 4 days
Exercisable at End of Period	5 years 8 months 23 days
Aggregate Intrinsic Value
Outstanding at End of Period | $	$ 824,000
Exercisable at End of Period | $	$ 820,000

Share-Based Compensation (Detai

Share-Based Compensation (Details Narrative) - USD ($)	Apr. 13, 2016	Apr. 02, 2016
Share-based Compensation Details Narrative
Closing stock price		$ 4.29
Reverse stock split	1 for 3 reverse split	1 for 3 reverse split
Aggregate intrinsic values for options exercised		$ 98,000

Stock Issuance (Details)

Stock Issuance (Details)	Mar. 11, 2016$ / shares
Stock Issuance Details
Fair value of common stock	$ 4.41
Contractual term	3 years
Volatility	60.00%
Risk-free rate	1.16%
Expected dividends	0.00%

Stock Issuance (Details Narrati

Stock Issuance (Details Narrative))	Mar. 11, 2016USD ($)$ / sharesshares
Stock Issuance
Proceeds from sale of common stock | $	$ 500,000
Sale of common stock | shares	128,205
Purchase price per unit sold | $ / shares	$ 3.90
Unit description	one share of the Company’s common stock and a warrant to purchase one half of a share of common stock (64,103 total) with an exercise price of $4.80 and a term of 3 years.
Unit warrant exercise price | $ / shares	$ 4.80
Unit warrant term	3 years
Warrant to purchase four shares of common stock | shares	64,103
Fair value of warrants | $	$ 108,000

Warrants (Details)

Warrants (Details)	3 Months Ended
	Apr. 02, 2016USD ($)$ / sharesshares
Number of Shares
Warrants outstanding at beginning of period | shares	423,007
Warrants Issued | shares	64,103
Warrants Exercised | shares
Warrants Expired | shares
Warrants outstanding at end of period | shares	487,110
Warrants exercisable at end of period | shares	487,110
Weighted Average Exercise Price
Outstanding at beginning of period | $ / shares	$ 4.02
Warrants issued | $ / shares	$ 4.80
Warrants exercised | $ / shares
Warrant expired | $ / shares
Outstanding at end of period | $ / shares	$ 4.12
Exercisable at end of period | $ / shares	$ 4.12
Remaining Contractual Term, beginning of period	3 years 26 days
Weighted average contractual term, end of period	2 years 9 months 29 days
Aggregate Intrinsic Value | $	$ 171,000

Warrants (Details Narrative)

Warrants (Details Narrative) - $ / shares	Apr. 13, 2016	Apr. 02, 2016
Warrants Details Narrative
Closing stock price		$ 4.29
Reverse stock split	1 for 3 reverse split	1 for 3 reverse split

Business Segments (Details)

Business Segments (Details) - USD ($)	3 Months Ended
	Apr. 02, 2016	Apr. 04, 2015	Jan. 02, 2016
Business Segmentation
Net sales	$ 7,331,945	$ 5,260,971
Cost of sales	3,880,526	3,333,347
Gross profit	3,451,419	1,927,624
Operating expenses:
Sales and marketing	544,722	585,777
Research and development	464,072	121,095
General and administrative	1,988,559	2,126,836
Operating expenses	2,997,353	2,833,708
Operating income (loss)	454,066	(906,084)
Total assets	16,533,736		$ 18,749,209
Ingredients Segment [Member]
Business Segmentation
Net sales	4,600,626	2,680,341
Cost of sales	2,099,162	1,603,176
Gross profit	2,501,464	1,077,165
Operating expenses:
Sales and marketing	331,743	274,624
Research and development	$ 464,072	$ 121,095
General and administrative
Operating expenses	$ 795,815	$ 395,719
Operating income (loss)	1,705,649	681,446
Total assets	9,566,763		9,105,502
Core Standards and Contract Services Segment [Member]
Business Segmentation
Net sales	2,583,666	2,300,043
Cost of sales	1,671,984	1,573,784
Gross profit	911,682	726,259
Operating expenses:
Sales and marketing	$ 209,379	$ 310,944
Research and development
General and administrative
Operating expenses	$ 209,379	$ 310,944
Operating income (loss)	702,303	415,315
Total assets	3,268,647		3,306,624
Scientific and Regulatory Consulting Segment [Member]
Business Segmentation
Net sales	147,653	280,587
Cost of sales	109,380	156,387
Gross profit	38,273	124,200
Operating expenses:
Sales and marketing	$ 3,600	$ 209
Research and development
General and administrative
Operating expenses	$ 3,600	$ 209
Operating income (loss)	34,673	$ 123,991
Total assets	$ 89,354		111,765
Other Segment [Member]
Business Segmentation
Net sales
Cost of sales
Gross profit
Operating expenses:
Sales and marketing
Research and development
General and administrative	$ 1,988,559	$ 2,126,836
Operating expenses	1,988,559	2,126,836
Operating income (loss)	(1,988,559)	$ (2,126,836)
Total assets	$ 3,608,972		$ 622,318

Business Segments (Details Narr

Business Segments (Details Narrative)	3 Months Ended
	Apr. 02, 2016
Ingredients Segment [Member] | Customer C [Member]
Customer concentration risk	27.40%

Related-Party Transactions (Det

Related-Party Transactions (Details Narrative) - Related Party [Member]	3 Months Ended
	Apr. 02, 2016USD ($)
Related-party transaction description	Pursuant to the terms of the Supply Agreement, in exchange for a 4% equity interest in Healthspan, the Company agreed to initially supply NIAGEN Healthspan free of charge and thereafter at a fixed price and, in exchange for an additional 5% equity interest in Healthspan, the Company will grant to Healthspan certain exclusive rights to resell NIAGEN in certain direct response channels. Healthspan will pay the Company royalties on the cumulative worldwide net sales of its finished products containing NIAGEN. The exclusivity rights will remain for so long as Healthspan meets certain minimum purchase requirements In the event that, during the initial term, the Company terminates the exclusivity rights due to failure to meet the minimum purchase requirements
Equity interest received	9.00%
Free supply of inventory recorded as long term investment	$ 20,000

Commitments and Contingencies (

Commitments and Contingencies (Details Narrative) - USD ($)	Apr. 02, 2016	Mar. 04, 2016	Feb. 29, 2016
Longmont CO Lease [Member] | Minimum [Member]
Monthly lease payment	$ 8,586
Longmont CO Lease [Member] | Maximum [Member]
Monthly lease payment	$ 11,518
Boulder CO Lease [Member] | Minimum [Member]
Monthly lease payment			$ 23,472
Boulder CO Lease [Member] | Maximum [Member]
Monthly lease payment			$ 27,210
Rockville MD Lease [Member] | Minimum [Member]
Monthly lease payment		$ 3,450
Rockville MD Lease [Member] | Maximum [Member]
Monthly lease payment		$ 3,883