ChromaDex (CDXC) 10-Q 11 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jul. 02, 2016	Aug. 10, 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	Jul. 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		37,856,584
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,016

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Jul. 02, 2016	Jan. 02, 2016
Current Assets
Cash	$ 3,370,219	$ 5,549,672
Trade receivables, net of allowances of $397,000 and $367,000, respectively	6,793,779	2,450,591
Inventories	4,524,803	8,173,799
Prepaid expenses and other assets	465,711	373,567
Total current assets	15,154,512	16,547,629
Leasehold Improvements and Equipment, net	1,860,476	1,788,645
Deposits	233,570	58,883
Intangible assets, net	510,637	354,052
Longterm investment	20,318
Total assets	17,779,513	18,749,209
Current Liabilities
Accounts payable	2,331,376	6,223,958
Accrued expenses	1,937,427	1,302,865
Current maturities of loan payable		1,528,578
Current maturities of capital lease obligations	218,126	219,689
Customer deposits and other	262,852	272,002
Deferred rent, current	38,350	39,529
Total current liabilities	4,788,131	9,586,621
Loan payable, less current maturities, net		3,345,335
Capital lease obligations, less current maturities	337,903	444,589
Deferred rent, less current	205,826	97,990
Total Liabilities	5,331,860	13,474,535
Stockholders' Equity
Common stock, $.001 par value; authorized 50,000,000 shares; issued and outstanding July 2, 2016 37,489,914 and January 2, 2016 36,003,589 shares	37,490	36,004
Additional paid-in capital	54,532,594	47,534,059
Accumulated deficit	(42,122,431)	(42,295,389)
Total stockholders' equity	12,447,653	5,274,674
Total liabilities and stockholders' equity	$ 17,779,513	$ 18,749,209

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($)	Jul. 02, 2016	Jan. 02, 2016
Statement of Financial Position [Abstract]
Allowance for doubtful accounts and returns	$ 397,000	$ 367,000
Common Stock, Par Value Per Share	$ 0.001	$ .001
Common Stock, Shares Authorized	50,000,000	50,000,000
Common Stock, Shares, Issued	37,489,914	36,003,589
Common Stock, Shares, Outstanding	37,489,914	36,003,589

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
Income Statement [Abstract]
Sales, net	$ 8,829,579	$ 6,101,380	$ 16,161,524	$ 11,362,351
Cost of sales	4,702,132	3,630,688	8,582,658	6,964,035
Gross profit	4,127,447	2,470,692	7,578,866	4,398,316
Operating expenses:
Sales and marketing	698,031	639,748	1,242,753	1,225,525
Research and development	751,726	175,410	1,215,798	296,505
General and administrative	2,306,559	1,839,594	4,295,118	3,966,430
Operating expenses	3,756,316	2,654,752	6,753,669	5,488,460
Operating income (loss)	371,131	(184,060)	825,197	(1,090,144)
Nonoperating income (expense):
Interest income	638	645	1,432	1,363
Interest expense	(145,424)	(131,777)	(333,919)	(251,926)
Loss on debt extinguishment	(313,099)		(313,099)
Nonoperating expenses	(457,885)	(131,132)	(645,586)	(250,563)
Income (loss) before taxes	(86,754)	(315,192)	179,611	(1,340,707)
Provision for taxes	4,087		(6,653)
Net income (loss)	$ (82,667)	$ (315,192)	$ 172,958	$ (1,340,707)
Basic earnings (loss) per common share	$ 0	$ (0.01)	$ 0	$ (0.04)
Diluted earnings (loss) per common share	$ 0	$ (0.01)	$ 0	$ (0.04)
Basic weighted average common shares outstanding	36,990,032	35,803,298	36,702,037	35,768,082
Diluted weighted average common shares outstanding	36,990,032	35,803,298	37,470,666	35,768,082

Condensed Consolidated Stateme5

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($)	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning Balance, Amount at Jan. 02, 2016	$ 36,004	$ 47,534,059	$ (42,295,389)	$ 5,274,674
Beginning Balance, Share at Jan. 02, 2016	36,003,589
Issuance of common stock, Amount	$ 128	479,872		480,000
Issuance of common stock, Share	128,205
Exercise of stock options, Amount	$ 47	93,825		93,872
Exercise of stock options, Share	47,055
Share-based compensation		324,035		324,035
Vested restricted stock, Amount	$ 2	(2)
Vested restricted stock, Share	2,000
Net income (loss)			255,625	255,625
Ending Balance, Amount at Apr. 02, 2016	$ 36,181	48,431,789	(42,039,764)	6,428,206
Ending Balance, Share at Apr. 02, 2016	36,180,849
Beginning Balance, Amount at Jan. 02, 2016	$ 36,004	47,534,059	(42,295,389)	$ 5,274,674
Beginning Balance, Share at Jan. 02, 2016	36,003,589
Exercise of stock options, Share				(190,473)
Net income (loss)				$ 172,958
Ending Balance, Amount at Jul. 02, 2016	$ 37,490	54,532,594	(42,122,431)	12,447,653
Ending Balance, Share at Jul. 02, 2016	37,489,914
Beginning Balance, Amount at Apr. 02, 2016	$ 36,181	48,431,789	(42,039,764)	6,428,206
Beginning Balance, Share at Apr. 02, 2016	36,180,849
1 for 3 reverse stock split, isssuance due to fractional shares round up, Amount	$ 2	(2)
1 for 3 reverse stock split, isssuance due to fractional shares round up, Share	1,632
Issuance of common stock, Amount	$ 1,117	5,238,883		5,240,000
Issuance of common stock, Share	1,117,022
Exercise of stock options, Amount	$ 185	528,327		528,512
Exercise of stock options, Share	185,081
Share-based compensation		333,602		333,602
Vested restricted stock, Amount	$ 5	(5)
Vested restricted stock, Share	5,330
Net income (loss)			(82,667)	(82,667)
Ending Balance, Amount at Jul. 02, 2016	$ 37,490	$ 54,532,594	$ (42,122,431)	$ 12,447,653
Ending Balance, Share at Jul. 02, 2016	37,489,914

Condensed Consolidated Stateme6

Condensed Consolidated Statement of Stockholders' Equity (Parenthetical) - USD ($)	3 Months Ended
	Jul. 02, 2016	Apr. 02, 2016
Statement of Stockholders' Equity [Abstract]
Net offering costs	$ 10,000	$ 20,000

Condensed Consolidated Stateme7

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015
Cash Flows From Operating Activities
Net income (loss)	$ 172,958	$ (1,340,707)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation of leasehold improvements and equipment	159,370	137,279
Amortization of intangibles	38,415	20,541
Share-based compensation expense	657,637	1,223,177
Allowance for doubtful trade receivables	29,649	3,365
Loss from disposal of equipment		18,226
Non-cash loss on debt extinguishment	32,007
Non-cash financing costs	94,080	92,143
Changes in operating assets and liabilities:
Trade receivables	(4,372,837)	(1,195,891)
Inventories	3,628,678	645,308
Prepaid expenses and other assets	(266,831)	(134,482)
Accounts payable	(3,892,582)	(357,065)
Accrued expenses	634,562	427,913
Customer deposits and other	(9,150)	(5,251)
Deferred rent	106,657	(31,732)
Net cash used in operating activities	(2,987,387)	(497,176)
Cash Flows From Investing Activities
Purchases of leasehold improvements and equipment	(231,201)	(139,162)
Purchases of intangible assets	(195,000)	(22,500)
Net cash used in investing activities	(426,201)	(161,662)
Cash Flows From Financing Activities
Proceeds from issuance of common stock, net of issuance costs	5,720,000
Proceeds from exercise of stock options	622,384	15,601
Proceeds from loan payable		2,500,000
Payment of debt issuance cost		(15,000)
Principal payments on loan payable	(5,000,000)
Principal payments on capital leases	(108,249)	(107,265)
Net cash provided by financing activities	1,234,135	2,393,336
Net (decrease) increase in cash	(2,179,453)	1,734,498
Cash Beginning of Period	5,549,672	3,964,750
Cash Ending of Period	3,370,219	5,699,248
Supplemental Disclosures of Cash Flow Information
Cash payments for interest	239,839	73,202
Supplemental Schedule of Noncash Investing Activity
Capital lease obligation incurred for purchases of equipment		303,933
Inventory supplied to Healthspan Research, LLC for equity interest, at cost	20,318
Retirement of fully depreciated equipment - cost	28,083
Retirement of fully depreciated equipment - accumulated depreciation	$ (28,083)

Interim Financial Statements

Interim Financial Statements	6 Months Ended
	Jul. 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’sfinancial position as of July 2, 2016 and results of operations and cash flows for the threeand six months ended July 2, 2016 and July 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 sixmonths ended July 2, 2016are 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	6 Months Ended
	Jul. 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 August 12, 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	6 Months Ended
	Jul. 02, 2016
Accounting Policies [Abstract]
Significant Accounting Policies	Basis of presentation Inventories July 2, 2016 January 2, 2016 Natural product fine chemicals $ 1,031,287 $ 1,239,338 Bulk ingredients 3,601,516 7,195,461 4,632,803 8,434,799 Less valuation allowance (108,000 ) (261,000 ) $ 4,524,803 $ 8,173,799

Reverse Stock Split

Reverse Stock Split	6 Months Ended
	Jul. 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	6 Months Ended
	Jul. 02, 2016
Loss 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 and six months ended July 2, 2016 and July 4, 2015: Three Months Ended Six Months Ended July 2, 2016 July 4, 2015 July 2, 2016 July 4, 2015 Net income (loss) $ (82,667 ) $ (315,192 ) $ 172,958 $ (1,340,707 ) Basic weighted average common shares outstanding (1): 36,990,032 35,803,298 36,702,037 35,768,082 Basic earnings (loss) per common share $ (0.00 ) $ (0.01 ) $ 0.00 $ (0.04 ) Dilutive effect of stock options, net — — 726,879 — Dilutive effect of warrants, net — — 41,750 — Diluted weighted average common shares outstanding : 36,990,032 35,803,298 37,470,666 35,768,082 Diluted earnings (loss) per common share $ (0.00 ) $ (0.01 ) $ 0.00 $ (0.04 ) Potentially dilutive securities, total (2): Stock options 5,126,943 4,706,705 4,400,064 4,706,705 Warrants 487,111 156,340 445,361 156,340 Convertible debt — 257,798 — 257,798 (1) Includes 369,220 and 410,161 weighted average nonvested shares of restricted stock for the three months ended July 2, 2016 and July 4, 2015, respectively, and 370,923 and 464,095 weighted average nonvested shares or restricted stock for the six months ended July 2, 2016 and July 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 months ended July 2, 2016, and the three and six months ended July 4, 2015 as their impact is antidilutive.

Loan Payable

Loan Payable	6 Months Ended
	Jul. 02, 2016
Debt Disclosure [Abstract]
Loan Payable	On June 14, 2016, the Company repaid $4,851,542 owed to Hercules Funding II LLC (“Hercules”), under the Company’s loan and security agreement with Hercules dated as of September 29, 2014 (the “Loan Agreement”). The payoff amount was comprised of the following: Payoff Amount Principal $ 4,554,659 Accrued interest 15,790 End of term charge 187,500 Prepayment fee 91,093 Other fees 2,500 Total $ 4,851,542 Upon Hercules’ receipt of the Payoff Amount, the Loan Agreement terminated. The Loan Agreement initially provided the Company with access to a term loan of up to $5 million. The first $2.5 million of the term loan was funded at the closing of the Loan Agreement, and was repayable in installments over 30 months, following an initial interest-only period of twelve months after closing. The Company drew down the remaining $2.5 million of the term loan on June 17, 2015 and the interest-only period was extended to March 31, 2016. In connection with the loan, the Company paid an aggregate of $65,000 in facility charges to Hercules and granted Hercules first priority liens and a security interest in substantially all of its assets. The Loan Agreement also provided (i) a borrower option to repay principal in common stock up to an aggregate amount of $500,000 at a conversion price of $3.879 per share and (ii) a lender option to receive principal repayments in common stock up to an aggregate amount of $500,000 at a conversion price of $3.879 per share, subject to certain conditions. However, no principal was repaid in common stock. On the commitment date, no separate accounting was required for the conversion feature. In connection with the termination of the Loan Agreement, Hercules’s commitments to extend further credit to the Company terminated, all obligations, covenants, debts and liabilities of the Company under the Loan Agreement were satisfied and discharged in full, all documents entered into in connection with the Loan Agreement, other than a warrant issued pursuant to the Loan Agreement, were terminated, all liens or security interests granted to secure the obligations under the Loan Agreement terminated and all guaranties of the Company’s obligations under the Loan Agreement terminated. The payoff amount, excluding the accrued interest to date, was $4,835,752 and the net carrying amount of the debt on the extinguishment date was $4,522,653. The difference of $313,099 was recognized as a non-operating loss in the statement of operations during the three months ended July 2, 2016. Net Carrying Amount Payoff Amount (Excluding Interest) Principal $ 4,554,659 Principal $ 4,554,659 Accrued end of term charge 103,909 End of term charge 187,500 Deferred financing cost (45,606) Prepayment fee 91,093 Warrant discount (90,309) Other fees 2,500 Total $ 4,522,653 Total $ 4,835,752 (A) (B) Loss on debt extinguishment $ (313,099) (A) - (B)

Employee Share-Based Compensati

Employee Share-Based Compensation	6 Months Ended
	Jul. 02, 2016
Share-based Compensation
Employee Share-Based Compensation	Service Period The following table summarizes activity of service period based stock options granted to employees at July 2, 2016 and changes during the six months then ended: Weighted Average Number of Exercise Remaining Contractual Fair Aggregate Shares Price Term Value Value Outstanding at January 2, 2016 4,314,264 $ 3.50 6.44 Options Granted 151,669 4.99 10.00 $ 3.16 Options Exercised (190,473 ) 2.85 Options Forfeited (37,699 ) 3.49 Outstanding at July 2, 2016 4,237,761 $ 3.58 6.04 $ 3,150,000 Exercisable at July 2, 2016 3,436,494 $ 3.50 5.41 $ 2,817,082 The aggregate intrinsic values in the table above are based on the Company’s stock price of $4.11, which is the closing price of the Company’s stock on the last day of business for the period ended July 2, 2016. The aggregate intrinsic values for options exercised during the six months ended July 2, 2016 was approximately $433,000. The fair value of the Company’s stock options 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 to employees during the six months ended July 2, 2016. Six Months Ended July 2, 2016 Expected term 6.1 years Expected volatility 73 % Expected dividends 0.00 % Risk-free rate 1.50 % As of July 2,2016, there was approximately $1,594,000 of total unrecognized compensation expense under the plans for all employee stock options. That cost is expected to be recognized over a weighted average period of 2.70 years. Employee Share-Based Compensation The Company recognized compensation expense of approximately $314,000and $621,000 in general and administrative expenses in the statement of operations for the three and six months ended July 2, 2016, respectively, and approximately $442,000and $820,000 for the three and six months ended July 4, 2015, respectively.

Stock Issuance

Stock Issuance	6 Months Ended
	Jul. 02, 2016
Stock Issuance
Stock Issuance	On March 11, 2016, the Company entered into a Securities Purchase Agreement (“SPA”) 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 % On June 3, 2016, the Company entered into additional SPAs to raise $5,250,000 in a registered direct offering. Pursuant to the SPAs, the Company sold a total of 1,117,022 shares of the Company’s common stock at a purchase price of $4.70 per share.

Business Segments

Business Segments	6 Months Ended
	Jul. 02, 2016
Business Segments
Business Segments	The Company has the 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 provides 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 intersegmentsales 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 July 2, 2016 Ingredients Contract Services Regulatory segment segment Consulting segment Other Total Net sales $ 6,241,749 $ 2,474,982 $ 112,848 $ — $ 8,829,579 Cost of sales 3,034,389 1,561,287 106,456 — 4,702,132 Gross profit 3,207,360 913,695 6,392 — 4,127,447 Operating expenses: Sales and marketing 399,700 294,531 3,800 — 698,031 Research and development 736,726 15,000 — — 751,726 General and administrative — — — 2,306,559 2,306,559 Operating expenses 1,136,426 309,531 3,800 2,306,559 3,756,316 Operating income (loss) $ 2,070,934 $ 604,164 $ 2,592 $ (2,306,559 ) $ 371,131 Three months ended Core Standards and Scientific and July 4, 2015 Ingredients Contract Services Regulatory segment segment Consulting segment Other Total Net sales $ 3,411,636 $ 2,371,477 $ 318,267 $ — $ 6,101,380 Cost of sales 1,869,205 1,635,294 126,189 — 3,630,688 Gross profit 1,542,431 736,183 192,078 — 2,470,692 Operating expenses: Sales and marketing 298,281 336,392 5,075 — 639,748 Research and development 175,410 — — — 175,410 General and administrative — — — 1,839,594 1,839,594 Operating expenses 473,691 336,392 5,075 1,839,594 2,654,752 Operating income (loss) $ 1,068,740 $ 399,791 $ 187,003 $ (1,839,594 ) $ (184,060 ) Six months ended Core Standards and Scientific and July 2, 2016 Ingredients Contract Services Regulatory segment segment Consulting segment Other Total Net sales $ 10,842,375 $ 5,058,648 $ 260,501 $ — $ 16,161,524 Cost of sales 5,133,551 3,233,271 215,836 — 8,582,658 Gross profit 5,708,824 1,825,377 44,665 — 7,578,866 Operating expenses: Sales and marketing 731,443 503,910 7,400 — 1,242,753 Research and development 1,200,798 15,000 — — 1,215,798 General and administrative — — — 4,295,118 4,295,118 Operating expenses 1,932,241 518,910 7,400 4,295,118 6,753,669 Operating income (loss) $ 3,776,583 $ 1,306,467 $ 37,265 $ (4,295,118 ) $ 825,197 Six months ended Core Standards and Scientific and July 4, 2015 Ingredients Contract Services Regulatory segment segment Consulting segment Other Total Net sales $ 6,091,977 $ 4,671,520 $ 598,854 $ — $ 11,362,351 Cost of sales 3,472,381 3,209,078 282,576 — 6,964,035 Gross profit 2,619,596 1,462,442 316,278 — 4,398,316 Operating expenses: Sales and marketing 572,905 647,336 5,284 — 1,225,525 Research and development 296,505 — — — 296,505 General and administrative — — — 3,966,430 3,966,430 Operating expenses 869,410 647,336 5,284 3,966,430 5,488,460 Operating income (loss) $ 1,750,186 $ 815,106 $ 310,994 $ (3,966,430 ) $ (1,090,144 ) Core Standards and Scientific and At July 2, 2016 Ingredients Contract Services Regulatory segment segment Consulting segment Other Total Total assets $ 10,072,279 $ 3,443,044 $ 71,512 $ 4,192,678 $ 17,779,513 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 Major customers who accounted for more than 10% of the Company’s total sales were as follows: Percentage of the Company's Total Sales Three Months Ended Six Months Ended Major Customers July 2, 2016 July 4, 2015 July 2, 2016 July 4, 2015 Customer C (ingredients segment) 34.5 % * 31.3 % * Customer B (ingredients segment) * 11.8 % * 10.8 % * Represents less than 10%.

Related Party Transactions

Related Party Transactions	6 Months Ended
	Jul. 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 direct response channels. 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 up to a certain amount on a buy-one-get-one-free basis 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®. 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 six months endedJuly 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 accounts for its ownership interest under the cost method of accounting as the Company does not have an ability to exercise significant influence on Healthspan.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jul. 02, 2016
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	On February29, 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. On April 14, 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. Subsequent to the period ended July 2, 2016, the Company agreed to pay additional lease payments of approximately $800 per month as the landlord will provide additional improvements to the leased premises.

Significant Accounting Polici19

Significant Accounting Policies (Policy)	6 Months Ended
	Jul. 02, 2016
Accounting Policies [Abstract]
Basis of presentation	Basis of presentation
Inventories	Inventories July 2, 2016 January 2, 2016 Natural product fine chemicals $ 1,031,287 $ 1,239,338 Bulk ingredients 3,601,516 7,195,461 4,632,803 8,434,799 Less valuation allowance (108,000 ) (261,000 ) $ 4,524,803 $ 8,173,799

Significant Accounting Polici20

Significant Accounting Policies (Tables)	6 Months Ended
	Jul. 02, 2016
Accounting Policies [Abstract]
Inventories	July 2, 2016 January 2, 2016 Natural product fine chemicals $ 1,031,287 $ 1,239,338 Bulk ingredients 3,601,516 7,195,461 4,632,803 8,434,799 Less valuation allowance (108,000 ) (261,000 ) $ 4,524,803 $ 8,173,799

Earnings Per Share Applicable21

Earnings Per Share Applicable to Common Stockholders (Tables)	6 Months Ended
	Jul. 02, 2016
Loss Per Share Applicable To Common Stockholders Tables
Loss per share amounts applicable to common stockholders	Three Months Ended Six Months Ended July 2, 2016 July 4, 2015 July 2, 2016 July 4, 2015 Net income (loss) $ (82,667 ) $ (315,192 ) $ 172,958 $ (1,340,707 ) Basic weighted average common shares outstanding (1): 36,990,032 35,803,298 36,702,037 35,768,082 Basic earnings (loss) per common share $ (0.00 ) $ (0.01 ) $ 0.00 $ (0.04 ) Dilutive effect of stock options, net — — 726,879 — Dilutive effect of warrants, net — — 41,750 — Diluted weighted average common shares outstanding : 36,990,032 35,803,298 37,470,666 35,768,082 Diluted earnings (loss) per common share $ (0.00 ) $ (0.01 ) $ 0.00 $ (0.04 ) Potentially dilutive securities, total (2): Stock options 5,126,943 4,706,705 4,400,064 4,706,705 Warrants 487,111 156,340 445,361 156,340 Convertible debt — 257,798 — 257,798

Loan Payable (Tables)

Loan Payable (Tables)	6 Months Ended
	Jul. 02, 2016
Debt Disclosure [Abstract]
Loan payable	The payoff amount was comprised of following: Payoff Amount Principal $ 4,554,659 Accrued interest 15,790 End of term charge 187,500 Prepayment fee 91,093 Other fees 2,500 Total $ 4,851,542 Net Carrying Amount Payoff Amount (Excluding Interest) Principal $ 4,554,659 Principal $ 4,554,659 Accrued end of term charge 103,909 End of term charge 187,500 Deferred financing cost (45,606 ) Prepayment fee 91,093 Warrant discount (90,309 ) Other fees 2,500 Total $ 4,522,653 Total $ 4,835,752 (A) (B) Loss on debt extinguishment $ (313,099 ) (A) - (B)

Employee Share-Based Compensa23

Employee Share-Based Compensation (Tables)	6 Months Ended
	Jul. 02, 2016
Share-based Compensation Tables
Service Period Based Stock Options	Weighted Average Number of Exercise Remaining Contractual Fair Aggregate Shares Price Term Value Value Outstanding at January 2, 2016 4,314,264 $ 3.50 6.44 Options Granted 151,669 4.99 10.00 $ 3.16 Options Exercised (190,473 ) 2.85 Options Forfeited (37,699 ) 3.49 Outstanding at July 2, 2016 4,237,761 $ 3.58 6.04 $ 3,150,000 Exercisable at July 2, 2016 3,436,494 $ 3.50 5.41 $ 2,817,082
Weighted average assumptions of stock options granted	Six Months Ended July 2, 2016 Expected term 6.1 years Expected volatility 73 % Expected dividends 0.00 % Risk-free rate 1.50 %

Stock Issuance (Tables)

Stock Issuance (Tables)	6 Months Ended
	Jul. 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 %

Business Segments (Tables)

Business Segments (Tables)	6 Months Ended
	Jul. 02, 2016
Business Segments Tables
Business Segmentation	Three months ended Core Standards and Scientific and July 2, 2016 Ingredients Contract Services Regulatory segment segment Consulting segment Other Total Net sales $ 6,241,749 $ 2,474,982 $ 112,848 $ — $ 8,829,579 Cost of sales 3,034,389 1,561,287 106,456 — 4,702,132 Gross profit 3,207,360 913,695 6,392 — 4,127,447 Operating expenses: Sales and marketing 399,700 294,531 3,800 — 698,031 Research and development 736,726 15,000 — — 751,726 General and administrative — — — 2,306,559 2,306,559 Operating expenses 1,136,426 309,531 3,800 2,306,559 3,756,316 Operating income (loss) $ 2,070,934 $ 604,164 $ 2,592 $ (2,306,559 ) $ 371,131 Three months ended Core Standards and Scientific and July 4, 2015 Ingredients Contract Services Regulatory segment segment Consulting segment Other Total Net sales $ 3,411,636 $ 2,371,477 $ 318,267 $ — $ 6,101,380 Cost of sales 1,869,205 1,635,294 126,189 — 3,630,688 Gross profit 1,542,431 736,183 192,078 — 2,470,692 Operating expenses: Sales and marketing 298,281 336,392 5,075 — 639,748 Research and development 175,410 — — — 175,410 General and administrative — — — 1,839,594 1,839,594 Operating expenses 473,691 336,392 5,075 1,839,594 2,654,752 Operating income (loss) $ 1,068,740 $ 399,791 $ 187,003 $ (1,839,594 ) $ (184,060 ) Six months ended Core Standards and Scientific and July 2, 2016 Ingredients Contract Services Regulatory segment segment Consulting segment Other Total Net sales $ 10,842,375 $ 5,058,648 $ 260,501 $ — $ 16,161,524 Cost of sales 5,133,551 3,233,271 215,836 — 8,582,658 Gross profit 5,708,824 1,825,377 44,665 — 7,578,866 Operating expenses: Sales and marketing 731,443 503,910 7,400 — 1,242,753 Research and development 1,200,798 15,000 — — 1,215,798 General and administrative — — — 4,295,118 4,295,118 Operating expenses 1,932,241 518,910 7,400 4,295,118 6,753,669 Operating income (loss) $ 3,776,583 $ 1,306,467 $ 37,265 $ (4,295,118 ) $ 825,197 Six months ended Core Standards and Scientific and July 4, 2015 Ingredients Contract Services Regulatory segment segment Consulting segment Other Total Net sales $ 6,091,977 $ 4,671,520 $ 598,854 $ — $ 11,362,351 Cost of sales 3,472,381 3,209,078 282,576 — 6,964,035 Gross profit 2,619,596 1,462,442 316,278 — 4,398,316 Operating expenses: Sales and marketing 572,905 647,336 5,284 — 1,225,525 Research and development 296,505 — — — 296,505 General and administrative — — — 3,966,430 3,966,430 Operating expenses 869,410 647,336 5,284 3,966,430 5,488,460 Operating income (loss) $ 1,750,186 $ 815,106 $ 310,994 $ (3,966,430 ) $ (1,090,144 ) Core Standards and Scientific and At July 2, 2016 Ingredients Contract Services Regulatory segment segment Consulting segment Other Total Total assets $ 10,072,279 $ 3,443,044 $ 71,512 $ 4,192,678 $ 17,779,513 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
Percentage of Sales Table	Percentage of the Company's Total Sales Three Months Ended Six Months Ended Major Customers July 2, 2016 July 4, 2015 July 2, 2016 July 4, 2015 Customer C (ingredients segment) 34.5% * 31.3% * Customer B (ingredients segment) * 11.8% * 10.8% * Represents less than 10%.

Nature of Business and Liquid26

Nature of Business and Liquidity (Details Narrative) - USD ($)	3 Months Ended			6 Months Ended
	Jul. 02, 2016	Apr. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015	Jan. 02, 2016
Liquidity
Operating income (loss)	$ 371,131		$ (184,060)	$ 825,197	$ (1,090,144)
Net (loss)	(82,667)	$ 255,625	(315,192)	172,958	(1,340,707)
Cash and cash equivalents	$ 3,370,219		$ 5,699,248	$ 3,370,219	$ 5,699,248	$ 5,549,672

Significant Accounting Polici27

Significant Accounting Policies (Details) - USD ($)	Jul. 02, 2016	Jan. 02, 2016
Inventories
Natural product fine chemicals	$ 1,031,287	$ 1,239,338
Bulk ingredients	3,601,516	7,195,461
Inventory-gross	4,632,803	8,434,799
Less valuation allowance	(108,000)	(261,000)
Inventory-net	$ 4,524,803	$ 8,173,799

Reverse Stock Split (Details Na

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

Earnings Per Share Applicable29

Earnings Per Share Applicable to Common Stockholders (Details) - USD ($)	3 Months Ended			6 Months Ended
	Jul. 02, 2016	Apr. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
Net income (loss)	$ (82,667)	$ 255,625	$ (315,192)	$ 172,958	$ (1,340,707)
Basic weighted average common shares outstanding	36,990,032		35,803,298	36,702,037	35,768,082
Basic earnings (loss) per common share	$ 0		$ (0.01)	$ 0	$ (0.04)
Dilutive effect of stock options, net				726,879
Dilutive effect of warrants, net				41,750
Diluted weighted average common shares outstanding	36,990,032		35,803,298	37,470,666	35,768,082
Diluted earnings (loss) per common share	$ 0		$ (0.01)	$ 0	$ (0.04)
Stock Option [Member]
Potentially dilutive securities
Potentially dilutive securities	5,126,943		4,706,705	4,400,064	4,706,705
Warrant [Member]
Potentially dilutive securities
Potentially dilutive securities	487,111		156,340	445,361	156,340
Convertible Debt [Member]
Potentially dilutive securities
Potentially dilutive securities			257,798		257,798

Earnings Per Share Applicable30

Earnings Per Share Applicable to Common Stockholders (Details) (Details Narrative) - shares	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
Loss Per Share Applicable To Common Stockholders Details Narrative
Weighted average nonvested shares of restricted stock	369,220	410,161	370,923	464,095

Loan Payable (Details)

Loan Payable (Details)	Jul. 02, 2016USD ($)
Debt Disclosure [Abstract]
Principal, payoff amount	$ 4,554,659
Accrued interest, payoff amount	15,790
End of term charge, payoff amount	187,500
Prepayment fee, payoff amount	91,093
Other fees, payoff amount	2,500
Total payoff amount	$ 4,851,542

Loan Payable (Details 1)

Loan Payable (Details 1)	Jul. 02, 2016USD ($)
Debt Disclosure [Abstract]
Principal, carrying amount	$ 4,554,659
Accrued end of term charge, carrying amount	103,909
Deferred financing cost, carrying amount	(45,606)
Warrant discount, carrying amount	(90,309)
Total carrying amount	4,522,653
Principal, payoff amount	4,554,659
End of term charge, payoff amount	187,500
Prepayment fee, payoff amount	91,093
Other fees, payoff amount	2,500
Total payoff amount	4,835,752
Loss on debt extinguishment	$ (313,099)

Loan Payable (Details Narrative

Loan Payable (Details Narrative) - USD ($)	3 Months Ended	8 Months Ended
	Jul. 02, 2016	Sep. 14, 2014	Jun. 17, 2015	Sep. 01, 2014
Debt Disclosure [Abstract]
Principal, payoff amount	$ 4,554,659
Total payoff amount	4,851,542
Loan agreement				$ 5,000,000
Draw down amount			$ 2,500,000	$ 2,500,000
Facility fees		65,000
Conversion feature		(i) a borrower option to repay principal in common stock up to an aggregate amount of $500,000 at a conversion price of $3.879 per share and (ii) a lender option to receive principal repayments in common stock up to an aggregate amount of $500,000 at a conversion price of $3.879 per share, subject to certain conditions
Total carrying amount	4,522,653
Loss on debt extinguishment	$ (313,099)

Employee Share-Based Compensa34

Employee Share-Based Compensation (Details)	6 Months Ended
	Jul. 02, 2016USD ($)$ / sharesshares
Service Period Based Stock Options
Outstanding at Beginning of Period | shares	4,314,264
Options Granted | shares	151,669
Options Exercised | shares	(190,473)
Options Forfeited | shares	(37,699)
Outstanding at End of Period | shares	4,237,761
Exercisable at End of Period | shares	3,436,494
Weighted Average Exercise Price
Outstanding at Beginning of Period	$ 3.50
Options Granted	4.99
Options Exercised	2.85
Options Forfeited	3.49
Outstanding at End of Period	3.58
Exercisable at End of Period	$ 3.50
Weighted Average Remaining Contractual Term
Outstanding at Beginning of Period	6 years 5 months 9 days
Options Granted	10 years
Outstanding at End of Period	6 years 15 days
Exercisable at End of Period	5 years 4 months 28 days
Weighted Average Fair Value
Weighted Average Fair Value Option Granted	$ 3.16
Aggregate Intrinsic Value
Outstanding at End of Period | $	$ 3,150,000
Exercisable at End of Period | $	$ 2,817,082

Employee Share-Based Compensa35

Employee Share-Based Compensation (Details 1)	Mar. 11, 2016	Jul. 02, 2016
Employee Share-based Compensation Details 1
Expected term	3 years	6 years 1 month 6 days
Expected volatility	60.00%	73.00%
Expected dividends	0.00%	0.00%
Risk-free rate	1.16%	1.50%

Employee Share-Based Compensa36

Employee Share-Based Compensation (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015
Employee Share-based Compensation Details Narrative
Closing stock price	$ 4.11		$ 4.11
Aggregate intrinsic values for options exercised			$ 433,000
Unrecognized compensation expense	$ 1,594,000		$ 1,594,000
Cost is expected to be recognized over a weighted average period			2 years 8 months 12 days
Recognized compensation expense	$ 314,000	$ 442,000	$ 621,000	$ 820,000

Stock Issuance (Details)

Stock Issuance (Details) - $ / shares	Mar. 11, 2016	Jul. 02, 2016
Stock Issuance Details
Fair value of common stock	$ 4.41
Contractual term	3 years	6 years 1 month 6 days
Volatility	60.00%	73.00%
Risk-free rate	1.16%	1.50%
Expected dividends	0.00%	0.00%

Stock Issuance (Details Narrati

Stock Issuance (Details Narrative)) - USD ($)	Jun. 03, 2016	Mar. 11, 2016
Stock Issuance
Proceeds from sale of common stock	$ 5,250,000	$ 500,000
Sale of common stock	1,117,022	128,205
Purchase price per unit sold	$ 4.70	$ 3.90
Unit description		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
Unit warrant exercise price		$ 4.80
Unit warrant term		3 years
Fair value of warrants		$ 108,000

Business Segments (Details)

Business Segments (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2016	Jul. 04, 2015	Jan. 02, 2016
Business Segmentation
Net sales	$ 8,829,579	$ 6,101,380	$ 16,161,524	$ 11,362,351
Cost of sales	4,702,132	3,630,688	8,582,658	6,964,035
Gross profit	4,127,447	2,470,692	7,578,866	4,398,316
Operating expenses:
Sales and marketing	698,031	639,748	1,242,753	1,225,525
Research and development	751,726	175,410	1,215,798	296,505
General and administrative	2,306,559	1,839,594	4,295,118	3,966,430
Operating expenses	3,756,316	2,654,752	6,753,669	5,488,460
Operating income (loss)	371,131	(184,060)	825,197	(1,090,144)
Total assets	17,779,513		17,779,513		$ 18,749,209
Ingredients Segment [Member]
Business Segmentation
Net sales	6,241,749	3,411,636	10,842,375	6,091,977
Cost of sales	3,034,389	1,869,205	5,133,551	3,472,381
Gross profit	3,207,360	1,542,431	5,708,824	2,619,596
Operating expenses:
Sales and marketing	399,700	298,281	731,443	572,905
Research and development	736,726	175,410	1,200,798	296,505
General and administrative
Operating expenses	1,136,426	473,691	1,932,241	869,410
Operating income (loss)	2,070,934	1,068,740	3,776,583	1,750,186
Total assets	10,072,279		10,072,279		9,105,502
Core Standards and Contract Services Segment [Member]
Business Segmentation
Net sales	2,474,982	2,371,477	5,058,648	4,671,520
Cost of sales	1,561,287	1,635,294	3,233,271	3,209,078
Gross profit	913,695	736,183	1,825,377	1,462,442
Operating expenses:
Sales and marketing	294,531	336,392	503,910	647,336
Research and development	15,000		15,000
General and administrative
Operating expenses	309,531	336,392	518,910	647,336
Operating income (loss)	604,164	399,791	1,306,467	815,106
Total assets	3,443,044		3,443,044		3,306,624
Scientific and Regulatory Consulting Segment [Member]
Business Segmentation
Net sales	112,848	318,267	260,501	598,854
Cost of sales	106,456	126,189	215,836	282,576
Gross profit	6,392	192,078	44,665	316,278
Operating expenses:
Sales and marketing	3,800	5,075	7,400	5,284
Research and development
General and administrative
Operating expenses	3,800	5,075	7,400	5,284
Operating income (loss)	2,592	187,003	37,265	310,994
Total assets	71,512		71,512		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	2,306,559	1,839,594	4,295,118	3,966,430
Operating expenses	2,306,559	1,839,594	4,295,118	3,966,430
Operating income (loss)	(2,306,559)	$ (1,839,594)	(4,295,118)	$ (3,966,430)
Total assets	$ 4,192,678		$ 4,192,678		$ 6,225,318

Business Segments (Details 1)

Business Segments (Details 1) - Ingredients Segment [Member]	3 Months Ended			6 Months Ended
	Jul. 02, 2016	Jul. 04, 2015	Jul. 02, 2015	Jul. 02, 2016	Jul. 04, 2015
Customer C [Member]
Customer concentration risk	34.50%			31.30%
Customer B [Member]
Customer concentration risk		11.80%			10.80%

Related Party Transactions (Det

Related Party Transactions (Details Narrative) - Related Party [Member]	6 Months Ended
	Jul. 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® 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.
Equity interest received	5.00%
Supply charges recorded as long term investment	$ 20,000

Commitments and Contingencies (

Commitments and Contingencies (Details Narrative) - Lease Purchase Commitment [Member] - USD ($)	Apr. 14, 2016	Mar. 04, 2016	Feb. 29, 2016
Minimum [Member]
Monthly lease payment	$ 8,586	$ 3,450	$ 23,472
Additional monthly payment	800
Maximum [Member]
Monthly lease payment	11,518	$ 3,883	$ 27,210
Additional monthly payment	$ 800