Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 01, 2016 | Nov. 09, 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 | Oct. 1, 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 | 37,904,534 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Oct. 01, 2016 | Jan. 02, 2016 |
Current Assets | ||
Cash | $ 2,264,756 | $ 5,549,672 |
Trade receivables, net of allowances of $603,000 and $367,000, respectively | 6,511,439 | 2,450,591 |
Inventories | 6,312,909 | 8,173,799 |
Prepaid expenses and other assets | 401,902 | 373,567 |
Total current assets | 15,491,006 | 16,547,629 |
Leasehold Improvements and Equipment, net | 2,495,215 | 1,788,645 |
Deposits and other | 261,215 | 58,883 |
Intangible assets, net | 495,936 | 354,052 |
Longterm investment | 20,318 | 0 |
Total assets | 18,763,690 | 18,749,209 |
Current Liabilities | ||
Accounts payable | 4,098,778 | 6,223,958 |
Accrued expenses | 1,709,662 | 1,302,865 |
Current maturities of loan payable | 0 | 1,528,578 |
Current maturities of capital lease obligations | 217,308 | 219,689 |
Customer deposits and other | 277,615 | 272,002 |
Deferred rent, current | 52,734 | 39,529 |
Total current liabilities | 6,356,097 | 9,586,621 |
Loan payable, less current maturities, net | 0 | 3,345,335 |
Capital lease obligations, less current maturities | 282,820 | 444,589 |
Deferred rent, less current | 267,419 | 97,990 |
Total Liabilities | 6,906,336 | 13,474,535 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Common stock, $.001 par value; authorized 50,000,000 shares; issued and outstanding October 1, 2016 37,543,198 and January 2, 2016 36,003,589 shares | 37,543 | 36,004 |
Additional paid-in capital | 54,896,632 | 47,534,059 |
Accumulated deficit | (43,076,821) | (42,295,389) |
Total stockholders' equity | 11,857,354 | 5,274,674 |
Total liabilities and stockholders' equity | $ 18,763,690 | $ 18,749,209 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Oct. 01, 2016 | Jan. 02, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts and returns | $ 603,000 | $ 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 | 37,543,198 | 36,003,589 |
Common Stock, Shares, Outstanding | 37,543,198 | 36,003,589 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Oct. 01, 2016 | Oct. 03, 2015 | Oct. 01, 2016 | Oct. 03, 2015 | ||
Income Statement [Abstract] | |||||
Sales, net | $ 5,007,450 | $ 6,287,309 | $ 21,168,974 | $ 17,649,660 | |
Cost of sales | 2,964,980 | 3,805,679 | 11,547,638 | 10,769,714 | |
Gross profit | 2,042,470 | 2,481,630 | 9,621,336 | 6,879,946 | |
Operating expenses: | |||||
Sales and marketing | 447,985 | 550,878 | 1,690,738 | 1,776,403 | |
Research and development | 772,799 | 188,690 | 1,988,597 | 485,195 | |
General and administrative | 1,768,402 | 1,564,932 | 6,063,520 | 5,531,362 | |
Operating expenses | 2,989,186 | 2,304,500 | 9,742,855 | 7,792,960 | |
Operating income (loss) | (946,716) | 177,130 | (121,519) | (913,014) | |
Nonoperating income (expense): | |||||
Interest income | 565 | 976 | 1,997 | 2,339 | |
Interest expense | (11,392) | (181,822) | (345,311) | (433,748) | |
Loss on debt extinguishment | 0 | 0 | (313,099) | 0 | |
Nonoperating expenses | (10,827) | (180,846) | (656,413) | (431,409) | |
Loss before taxes | (957,543) | (3,716) | (777,932) | (1,344,423) | |
Provision for taxes | 3,153 | 0 | (3,500) | 0 | |
Net loss | $ (954,390) | $ (3,716) | $ (781,432) | $ (1,344,423) | |
Basic and diluted loss per common share | $ (0.03) | $ 0 | $ (0.02) | $ (0.04) | |
Basic and diluted weighted average common shares outstanding | [1] | 37,868,672 | 35,814,305 | 37,090,916 | 35,783,490 |
[1] | Includes approximately 0.4 million nonvested restricted stock for all periods presented, which are participating securities that feature voting and dividend rights. |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | 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 | |||
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 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 | (238,423) | |||
Net income (loss) | $ (781,432) | |||
Ending Balance, Amount at Oct. 01, 2016 | $ 37,543 | 54,896,632 | (43,076,821) | 11,857,354 |
Ending Balance, Share at Oct. 01, 2016 | 37,543,198 | |||
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 | |||
Reconciliation of offering costs | (2,526) | (2,526) | ||
Exercise of stock options, Amount | $ 48 | 94,180 | 94,228 | |
Exercise of stock options, Share | 47,950 | |||
Share-based compensation | 272,389 | 272,389 | ||
Vested restricted stock, Amount | $ 5 | (5) | 0 | |
Vested restricted stock, Share | 5,334 | |||
Net income (loss) | (954,390) | (954,390) | ||
Ending Balance, Amount at Oct. 01, 2016 | $ 37,543 | $ 54,896,632 | $ (43,076,821) | $ 11,857,354 |
Ending Balance, Share at Oct. 01, 2016 | 37,543,198 |
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 ($) | 9 Months Ended | |
Oct. 01, 2016 | Oct. 03, 2015 | |
Cash Flows From Operating Activities | ||
Net loss | $ (781,432) | $ (1,344,423) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation of leasehold improvements and equipment | 234,408 | 209,754 |
Amortization of intangibles | 63,116 | 32,236 |
Share-based compensation expense | 930,026 | 1,656,504 |
Allowance for doubtful trade receivables | 235,591 | 5,429 |
Loss from disposal of equipment | 0 | 19,643 |
Loss on debt extinguishment | 313,099 | 0 |
Non-cash financing costs | 94,080 | 139,780 |
Changes in operating assets and liabilities: | ||
Trade receivables | (4,296,439) | (1,883,261) |
Inventories | 1,840,572 | (429,287) |
Prepaid expenses and other assets | (230,667) | (86,183) |
Accounts payable | (2,125,180) | 108,961 |
Accrued expenses | 406,797 | 361,481 |
Customer deposits and other | 5,613 | 2,393 |
Deferred rent | 182,634 | (50,589) |
Net cash used in operating activities | (3,127,782) | (1,257,562) |
Cash Flows From Investing Activities | ||
Purchases of leasehold improvements and equipment | (940,978) | (242,765) |
Purchases of intangible assets | (205,000) | (107,500) |
Net cash used in investing activities | (1,145,978) | (350,265) |
Cash Flows From Financing Activities | ||
Proceeds from issuance of common stock, net of issuance costs | 5,717,474 | 0 |
Proceeds from exercise of stock options | 716,612 | 25,266 |
Proceeds from loan payable | 0 | 2,500,000 |
Payment of debt issuance cost | 0 | (15,000) |
Principal payments on loan payable | (5,000,000) | 0 |
Cash paid for debt extinguishment costs | (281,092) | 0 |
Principal payments on capital leases | (164,150) | (158,547) |
Net cash provided by financing activities | 988,844 | 2,351,719 |
Net (decrease) increase in cash | (3,284,916) | 743,892 |
Cash Beginning of Period | 5,549,672 | 3,964,750 |
Cash Ending of Period | 2,264,756 | 4,708,642 |
Supplemental Disclosures of Cash Flow Information | ||
Cash payments for interest | 251,231 | 293,968 |
Supplemental Schedule of Noncash Investing Activity | ||
Capital lease obligation incurred for purchases of equipment | 0 | 303,933 |
Inventory supplied to Healthspan Research, LLC for equity interest, at cost | 20,318 | 0 |
Retirement of fully depreciated equipment - cost | 28,083 | 8,181 |
Retirement of fully depreciated equipment - accumulated depreciation | $ (28,083) | $ (8,181) |
Interim Financial Statements
Interim Financial Statements | 9 Months Ended |
Oct. 01, 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 October 1, 2016 and results of operations and cash flows for the three and nine months ended October 1, 2016 and October 3, 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 nine months ended October 1, 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 | 9 Months Ended |
Oct. 01, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Liquidity | Nature of business Liquidity Subsequent to the period ended October 1, 2016, the Company entered into a business financing agreement with Western Alliance Bank, in order to establish a formula based revolving credit line up to $5.0 million. While we anticipate that our current cash, cash equivalents, cash to be generated from operations and the established $5.0 million revolving credit line will be sufficient to meet our projected operating plans through at least November 11, 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 | 9 Months Ended |
Oct. 01, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Basis of presentation Changes in accounting principle The Company early adopted the amendments in this ASU effective as of October 1, 2016. For the nine-month period ended October 1, 2016, the Company incurred loss of approximately $313,000 on debt extinguishment and approximately $281,000 were paid in cash. The Company had previously presented these cash paid costs as operating cash outflows in its consolidated statement of cash flows for the six-month period ended July 2, 2016 in the Company’s Quarterly Report on Form 10-Q filed with the Commission on August 11, 2016. The early adoption has resulted in adjustments to the Company’s consolidated statement of cash flows for the six-month period ended July 2, 2016, by reclassifying the cash paid for debt extinguishment costs as financing cash outflows. Below are the effects of the change on the consolidated statement of cash flows for the six-month period ended July 2, 2016. ChromaDex Corporation and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) For the Six Month Period Ended July 2, 2016 Previously Adjustments As Adjusted Cash Flows From Operating Activities Net income $ 172,958 $ — $ 172,958 Adjustments to reconcile net income to net cash used in operating activities: 1,011,158 281,092 1,292,250 Changes in operating assets and liabilities: (4,171,503 ) — (4,171,503 ) Net cash used in operating activities (2,987,387 ) 281,092 (2,706,295 ) Cash Flows From Investing Activities Purchases of leasehold improvements and equipment (231,201 ) — (231,201 ) Purchases of intangible assets (195,000 ) — (195,000 ) Net cash used in investing activities (426,201 ) — (426,201 ) Cash Flows From Financing Activities Proceeds from issuance of common stock, net of issuance costs 5,720,000 — 5,720,000 Proceeds from exercise of stock options 622,384 — 622,384 Principal payments on loan payable (5,000,000 ) — (5,000,000 ) Cash paid for debt extinguishment costs — (281,092 ) (281,092 ) Principal payments on capital leases (108,249 ) — (108,249 ) Net cash provided by financing activities 1,234,135 (281,092 ) 953,043 Net decrease in cash (2,179,453 ) — (2,179,453 ) Cash Beginning of Period 5,549,672 — 5,549,672 Cash Ending of Period $ 3,370,219 $ — $ 3,370,219 Inventories October 1, 2016 January 2, 2016 Natural product fine chemicals $ 1,024,213 $ 1,239,338 Bulk ingredients 5,388,696 7,195,461 6,412,909 8,434,799 Less valuation allowance (100,000 ) (261,000 ) $ 6,312,909 $ 8,173,799 |
Reverse Stock Split
Reverse Stock Split | 9 Months Ended |
Oct. 01, 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 | 9 Months Ended |
Oct. 01, 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 nine months ended October 1, 2016 and October 3, 2015: Three Months Ended Nine Months Ended Oct. 1, 2016 Oct. 3, 2015 Oct. 1, 2016 Oct. 3, 2015 Net loss $ (954,390 ) $ (3,716 ) $ (781,432 ) $ (1,344,423 ) Basic and diluted loss per common share $ (0.03 ) $ (0.00 ) $ (0.02 ) $ (0.04 ) Weighted average common shares outstanding (1): 37,868,672 35,814,305 37,090,916 35,783,490 Potentially dilutive securities, total (2): Stock options 5,217,508 5,279,868 5,217,508 5,279,868 Warrants 487,111 156,340 487,111 156,340 Convertible debt — 257,798 — 257,798 (1) Includes approximately 0.4 million nonvested restricted stock for all periods presented, which are participating securities that feature voting and dividend rights. (2) Excluded from the computation of loss per share as their impact is antidilutive. |
Loan Payable
Loan Payable | 9 Months Ended |
Oct. 01, 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 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 nine months ended October 1, 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 | 9 Months Ended |
Oct. 01, 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 October 1, 2016 and changes during the nine months then ended: Remaining Aggregate Number of Exercise Contractual Fair Intrinsic Shares Price Term Value Value Outstanding at January 2, 2016 4,314,264 $ 3.5 6.44 Options Granted 579,148 4.27 10 $ 2.71 Options Exercised (238,423 ) 2.67 $502,000 Options Forfeited (326,663 ) 4.15 Outstanding at October 1, 2016 4,328,326 $ 3.6 6.2 $684,000 Exercisable at October 1, 2016 3,314,918 $ 3.46 5.31 $668,000 The aggregate intrinsic values in the table above are based on the Company’s stock price of $2.98, which is the closing price of the Company’s stock on the last day of business for the period ended October 1, 2016. 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 nine months ended October 1, 2016. Nine Months Ended October 1, 2016 Expected term 6.0 years Expected volatility 73% Expected dividends 0.00% Risk-free rate 1.33% As of October 1, Employee Share-Based Compensation The Company recognized compensation expense of approximately $260,000 and $881,000 in general and administrative expenses in the statement of operations for the three and nine months ended October 1, 2016, respectively, and approximately $418,000 and $1,238,000 for the three and nine months ended October 3, 2015, respectively. |
Stock Issuance
Stock Issuance | 9 Months Ended |
Oct. 01, 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 % 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 | 9 Months Ended |
Oct. 01, 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 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 Ingredients Contract Regulatory segment segment segment Other Total Net sales $ 2,663,095 $ 2,052,135 $ 292,220 $ — $ 5,007,450 Cost of sales 1,287,421 1,548,268 129,291 — 2,964,980 Gross profit 1,375,674 503,867 162,929 — 2,042,470 Operating expenses: Sales and marketing 199,130 245,255 3,600 — 447,985 Research and development 760,299 12,500 — — 772,799 General and administrative — — — 1,768,402 1,768,402 Operating expenses 959,429 257,755 3,600 1,768,402 2,989,186 Operating income (loss) $ 416,245 $ 246,112 $ 159,329 $ (1,768,402 ) $ (946,716 ) Three months ended Core Standards and Scientific and Ingredients Contract Services Regulatory segment segment segment Other Total Net sales $ 4,146,597 $ 1,875,296 $ 265,416 $ — $ 6,287,309 Cost of sales 2,157,183 1,533,402 115,094 — 3,805,679 Gross profit 1,989,414 341,894 150,322 — 2,481,630 Operating expenses: Sales and marketing 259,874 287,901 3,103 — 550,878 Research and development 188,690 — — — 188,690 General and administrative — — — 1,564,932 1,564,932 Operating expenses 448,564 287,901 3,103 1,564,932 2,304,500 Operating income (loss) $ 1,540,850 $ 53,993 $ 147,219 $ (1,564,932 ) $ 177,130 Nine months ended Core Standards and Scientific and Ingredients Contract Regulatory Consulting segment segment segment Other Total Net sales $ 13,505,470 $ 7,110,783 $ 552,721 $ — $ 21,168,974 Cost of sales 6,420,972 4,781,539 345,127 — 11,547,638 Gross profit 7,084,498 2,329,244 207,594 — 9,621,336 Operating expenses: Sales and marketing 930,573 749,165 11,000 — 1,690,738 Research and development 1,961,097 27,500 — — 1,988,597 General and administrative — — — 6,063,520 6,063,520 Operating expenses 2,891,670 776,665 11,000 6,063,520 9,742,855 Operating income (loss) $ 4,192,828 $ 1,552,579 $ 196,594 $ (6,063,520 ) $ (121,519 ) Nine months ended Core Standards and Scientific and Ingredients Contract Regulatory segment segment segment Other Total Net sales $ 10,238,574 $ 6,546,816 $ 864,270 $ — $ 17,649,660 Cost of sales 5,629,564 4,742,480 397,670 — 10,769,714 Gross profit 4,609,010 1,804,336 466,600 — 6,879,946 Operating expenses: Sales and marketing 832,779 935,237 8,387 — 1,776,403 Research and development 485,195 — — — 485,195 General and administrative — — — 5,531,362 5,531,362 Operating expenses 1,317,974 935,237 8,387 5,531,362 7,792,960 Operating income (loss) $ 3,291,036 $ 869,099 $ 458,213 $ (5,531,362 ) $ (913,014 ) Core Standards and Scientific and At October 1, 2016 Ingredients Contract Regulatory segment segment segment Other Total Total assets $ 12,051,865 $ 3,645,554 $ 166,027 $ 2,900,244 $ 18,763,690 Core Standards and Scientific and At January 2, 2016 Ingredients Contract Regulatory segment segment 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 Nine Months Ended Major Customers Oct. 1, 2016 Oct. 3, 2015 Oct. 1, 2016 Oct. 3, 2015 Customer D (Ingredients and Core segment) 12.3 % * * * Customer C (Ingredients segment) * * 24.5 % * Customer B (Ingredients segment) * 19.1 % * 13.8 % * Represents less than 10%. Major customers who accounted for more than 10% of the Company’s total trade receivables were as follows: Percentage of the Company's Total Trade Receivables Major Customers At October 1, 2016 At January 2, 2016 Customer D (Ingredients and Core segment) * 22.8 % Customer C (Ingredients segment) 48.8 % * Customer A (Ingredients segment) * 14.7 % * Represents less than 10%. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Oct. 01, 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 up to a certain amount, 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 nine months ended October 1, 2016, the Company shipped NIAGEN® to Healthspan to satisfy part of our obligation to supply a certain amount of NIAGEN® in exchange for the 4% equity interest in Healthspan, which our cost was approximately $20,000. 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 | 9 Months Ended |
Oct. 01, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Operating Leases 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. 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. The Company also agreed to pay additional lease payments of approximately $800 per month as the landlord will provide additional improvements to the leased premises. Payments and future commitments for these leases entered in 2016 are as follows: Payments due by period 2016 2017 2018 2019 2020 Thereafter $ 241,000 $ 439,000 $ 451,000 $ 466,000 $ 481,000 $ 1,146,000 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Oct. 01, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent to the period ended October 1, 2016, the Company entered into a business financing agreement (“Financing Agreement”) with Western Alliance Bank (“Western Alliance”), in order to establish a formula based revolving credit line pursuant to which the Company may borrow an aggregate principal amount of up to $5,000,000, subject to the terms and conditions of the Financing Agreement. Upon execution of the Financing Agreement, the Company paid a $25,000 facility fee and a $900 due diligence fee to Western Alliance. The interest rate will be calculated at a floating rate per month equal to (a) the greater of (i) 3.50% per year or (ii) the Prime Rate published in the Money Rates section of the Western Edition of The Wall Street Journal, or such other rate of interest publicly announced by Lender as its Prime Rate, plus (b) 2.50 percentage points, plus an additional 5.00 percentage points during any period that an event of default has occurred and is continuing. The Company’s obligations under the Financing Agreement are secured by a security interest in substantially all of the Company’s current and future personal property assets, including intellectual property. Any borrowings, interest or other fees or obligations that the Company owes Western Alliance pursuant to the Financing Agreement (the “Obligations”) will be become due and payable on November 4, 2018. If the Financing Agreement is terminated prior to November 4, 2017, the Company will pay a termination fee of $50,000 to Western Alliance, provided that such termination fee will be waived in the event that the Company refinances with Western Alliance. The Financing Agreement includes quick ratio, EBDAS and minimum revenue financial covenants. Pursuant to an exclusive placement and advisory agreement by and among the Company, Trump Securities LLC (“Trump”) and Credo 180, LLC, the Company paid Trump a consulting fee of $100,000 in connection with the execution of the Financing Agreement. |
Significant Accounting Polici20
Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 01, 2016 | |
Accounting Policies [Abstract] | |
Basis of presentation | The financial statements and accompanying notes have been prepared on a consolidated basis and reflect the consolidated financial position of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated from these financial statements. The Company’s fiscal year ends on the Saturday closest to December 31. Every fifth or sixth fiscal year, the inclusion of an extra week occurs due to the Company’s floating year-end date. The fiscal year 2015 ended on January 2, 2016 consisted of normal 52 weeks. The fiscal year 2016 ending on December 31, 2016 will also include the normal 52 weeks. |
Changes in accounting principle | The Company early adopted the amendments in this ASU effective as of October 1, 2016. For the nine-month period ended October 1, 2016, the Company incurred loss of approximately $313,000 on debt extinguishment and approximately $281,000 were paid in cash. The Company had previously presented these cash paid costs as operating cash outflows in its consolidated statement of cash flows for the six-month period ended July 2, 2016 in the Company’s Quarterly Report on Form 10-Q filed with the Commission on August 11, 2016. The early adoption has resulted in adjustments to the Company’s consolidated statement of cash flows for the six-month period ended July 2, 2016, by reclassifying the cash paid for debt extinguishment costs as financing cash outflows. Below are the effects of the change on the consolidated statement of cash flows for the six-month period ended July 2, 2016. ChromaDex Corporation and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) For the Six Month Period Ended July 2, 2016 Previously Adjustments As Adjusted Cash Flows From Operating Activities Net income $ 172,958 $ — $ 172,958 Adjustments to reconcile net income to net cash used in operating activities: 1,011,158 281,092 1,292,250 Changes in operating assets and liabilities: (4,171,503 ) — (4,171,503 ) Net cash used in operating activities (2,987,387 ) 281,092 (2,706,295 ) Cash Flows From Investing Activities Purchases of leasehold improvements and equipment (231,201 ) — (231,201 ) Purchases of intangible assets (195,000 ) — (195,000 ) Net cash used in investing activities (426,201 ) — (426,201 ) Cash Flows From Financing Activities Proceeds from issuance of common stock, net of issuance costs 5,720,000 — 5,720,000 Proceeds from exercise of stock options 622,384 — 622,384 Principal payments on loan payable (5,000,000 ) — (5,000,000 ) Cash paid for debt extinguishment costs — (281,092 ) (281,092 ) Principal payments on capital leases (108,249 ) — (108,249 ) Net cash provided by financing activities 1,234,135 (281,092 ) 953,043 Net decrease in cash (2,179,453 ) — (2,179,453 ) Cash Beginning of Period 5,549,672 — 5,549,672 Cash Ending of Period $ 3,370,219 $ — $ 3,370,219 |
Inventories | Inventories are comprised of raw materials, work-in-process and finished goods. They are stated at the lower of cost, determined by the first-in, first-out method (“FIFO”) method, or market. Labor and overhead has been added to inventory that was manufactured or characterized by the Company. The amounts of major classes of inventory as of October 1, 2016 and January 2, 2016 are as follows: October 1, 2016 January 2, 2016 Natural product fine chemicals $ 1,024,213 $ 1,239,338 Bulk ingredients 5,388,696 7,195,461 6,412,909 8,434,799 Less valuation allowance (100,000 ) (261,000 ) $ 6,312,909 $ 8,173,799 |
Significant Accounting Polici21
Significant Accounting Policies (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Accounting Policies [Abstract] | |
Adjustments to prior interim period financials | ChromaDex Corporation and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) For the Six Month Period Ended July 2, 2016 Previously Adjustments As Adjusted Cash Flows From Operating Activities Net income $ 172,958 $ — $ 172,958 Adjustments to reconcile net income to net cash used in operating activities: 1,011,158 281,092 1,292,250 Changes in operating assets and liabilities: (4,171,503 ) — (4,171,503 ) Net cash used in operating activities (2,987,387 ) 281,092 (2,706,295 ) Cash Flows From Investing Activities Purchases of leasehold improvements and equipment (231,201 ) — (231,201 ) Purchases of intangible assets (195,000 ) — (195,000 ) Net cash used in investing activities (426,201 ) — (426,201 ) Cash Flows From Financing Activities Proceeds from issuance of common stock, net of issuance costs 5,720,000 — 5,720,000 Proceeds from exercise of stock options 622,384 — 622,384 Principal payments on loan payable (5,000,000 ) — (5,000,000 ) Cash paid for debt extinguishment costs — (281,092 ) (281,092 ) Principal payments on capital leases (108,249 ) — (108,249 ) Net cash provided by financing activities 1,234,135 (281,092 ) 953,043 Net decrease in cash (2,179,453 ) — (2,179,453 ) Cash Beginning of Period 5,549,672 — 5,549,672 Cash Ending of Period $ 3,370,219 $ — $ 3,370,219 |
Inventories | October 1, 2016 January 2, 2016 Natural product fine chemicals $ 1,024,213 $ 1,239,338 Bulk ingredients 5,388,696 7,195,461 6,412,909 8,434,799 Less valuation allowance (100,000 ) (261,000 ) $ 6,312,909 $ 8,173,799 |
Earnings Per Share Applicable22
Earnings Per Share Applicable to Common Stockholders (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Loss Per Share Applicable To Common Stockholders Tables | |
Loss per share amounts applicable to common stockholders | Three Months Ended Nine Months Ended Oct. 1, 2016 Oct. 3, 2015 Oct. 1, 2016 Oct. 3, 2015 Net loss $ (954,390 ) $ (3,716 ) $ (781,432 ) $ (1,344,423 ) Basic and diluted loss per common share $ (0.03 ) $ (0.00 ) $ (0.02 ) $ (0.04 ) Weighted average common shares outstanding (1): 37,868,672 35,814,305 37,090,916 35,783,490 Potentially dilutive securities, total (2): Stock options 5,217,508 5,279,868 5,217,508 5,279,868 Warrants 487,111 156,340 487,111 156,340 Convertible debt — 257,798 — 257,798 (1) Includes approximately 0.4 million nonvested restricted stock for all periods presented, which are participating securities that feature voting and dividend rights. (2) Excluded from the computation of loss per share as their impact is antidilutive. |
Loan Payable (Tables)
Loan Payable (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Debt Disclosure [Abstract] | |
Loan payable | 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 Compensa24
Employee Share-Based Compensation (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Share-based Compensation Tables | |
Service Period Based Stock Options | Remaining Aggregate Number of Exercise Contractual Fair Intrinsic Shares Price Term Value Value Outstanding at January 2, 2016 4,314,264 $ 3.5 6.44 Options Granted 579,148 4.27 10 $ 2.71 Options Exercised (238,423 ) 2.67 $502,000 Options Forfeited (326,663 ) 4.15 Outstanding at October 1, 2016 4,328,326 $ 3.6 6.2 $684,000 Exercisable at October 1, 2016 3,314,918 $ 3.46 5.31 $668,000 |
Weighted average assumptions of stock options granted | Nine Months Ended October 1, 2016 Expected term 6.0 years Expected volatility 73% Expected dividends 0.00% Risk-free rate 1.33% |
Stock Issuance (Tables)
Stock Issuance (Tables) | 9 Months Ended |
Oct. 01, 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 % Risk-free rate 1.16 % Expected dividends 0.00 % |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Business Segmentation | Three months ended Core Standards and Scientific and Ingredients Contract Regulatory segment segment segment Other Total Net sales $ 2,663,095 $ 2,052,135 $ 292,220 $ — $ 5,007,450 Cost of sales 1,287,421 1,548,268 129,291 — 2,964,980 Gross profit 1,375,674 503,867 162,929 — 2,042,470 Operating expenses: Sales and marketing 199,130 245,255 3,600 — 447,985 Research and development 760,299 12,500 — — 772,799 General and administrative — — — 1,768,402 1,768,402 Operating expenses 959,429 257,755 3,600 1,768,402 2,989,186 Operating income (loss) $ 416,245 $ 246,112 $ 159,329 $ (1,768,402 ) $ (946,716 ) Three months ended Core Standards and Scientific and Ingredients Contract Services Regulatory segment segment segment Other Total Net sales $ 4,146,597 $ 1,875,296 $ 265,416 $ — $ 6,287,309 Cost of sales 2,157,183 1,533,402 115,094 — 3,805,679 Gross profit 1,989,414 341,894 150,322 — 2,481,630 Operating expenses: Sales and marketing 259,874 287,901 3,103 — 550,878 Research and development 188,690 — — — 188,690 General and administrative — — — 1,564,932 1,564,932 Operating expenses 448,564 287,901 3,103 1,564,932 2,304,500 Operating income (loss) $ 1,540,850 $ 53,993 $ 147,219 $ (1,564,932 ) $ 177,130 Nine months ended Core Standards and Scientific and Ingredients Contract Regulatory Consulting segment segment segment Other Total Net sales $ 13,505,470 $ 7,110,783 $ 552,721 $ — $ 21,168,974 Cost of sales 6,420,972 4,781,539 345,127 — 11,547,638 Gross profit 7,084,498 2,329,244 207,594 — 9,621,336 Operating expenses: Sales and marketing 930,573 749,165 11,000 — 1,690,738 Research and development 1,961,097 27,500 — — 1,988,597 General and administrative — — — 6,063,520 6,063,520 Operating expenses 2,891,670 776,665 11,000 6,063,520 9,742,855 Operating income (loss) $ 4,192,828 $ 1,552,579 $ 196,594 $ (6,063,520 ) $ (121,519 ) Nine months ended Core Standards and Scientific and Ingredients Contract Regulatory segment segment segment Other Total Net sales $ 10,238,574 $ 6,546,816 $ 864,270 $ — $ 17,649,660 Cost of sales 5,629,564 4,742,480 397,670 — 10,769,714 Gross profit 4,609,010 1,804,336 466,600 — 6,879,946 Operating expenses: Sales and marketing 832,779 935,237 8,387 — 1,776,403 Research and development 485,195 — — — 485,195 General and administrative — — — 5,531,362 5,531,362 Operating expenses 1,317,974 935,237 8,387 5,531,362 7,792,960 Operating income (loss) $ 3,291,036 $ 869,099 $ 458,213 $ (5,531,362 ) $ (913,014 ) Core Standards and Scientific and At October 1, 2016 Ingredients Contract Regulatory segment segment segment Other Total Total assets $ 12,051,865 $ 3,645,554 $ 166,027 $ 2,900,244 $ 18,763,690 Core Standards and Scientific and At January 2, 2016 Ingredients Contract Regulatory segment segment segment Other Total Total assets $ 9,105,502 $ 3,306,624 $ 111,765 $ 6,225,318 $ 18,749,209 |
Sales Revenue, Net [Member] | |
Percentage of Sales Table | Percentage of the Company's Total Sales Three Months Ended Nine Months Ended Major Customers Oct. 1, 2016 Oct. 3, 2015 Oct. 1, 2016 Oct. 3, 2015 Customer D (Ingredients and Core segment) 12.3 % * * * Customer C (Ingredients segment) * * 24.5 % * Customer B (Ingredients segment) * 19.1 % * 13.8 % * Represents less than 10%. |
Accounts Receivable [Member] | |
Percentage of Sales Table | Percentage of the Company's Total Trade Receivables Major Customers At October 1, 2016 At January 2, 2016 Customer D (Ingredients and Core segment) * 22.8 % Customer C (Ingredients segment) 48.8 % * Customer A (Ingredients segment) * 14.7 % * Represents less than 10%. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Oct. 01, 2016 | |
Commitments And Contingencies Tables | |
Schedule of lease payments | Payments due by period 2016 2017 2018 2019 2020 Thereafter $ 241,000 $ 439,000 $ 451,000 $ 466,000 $ 481,000 $ 1,146,000 |
Nature of Business and Liquid28
Nature of Business and Liquidity (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||
Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Oct. 03, 2015 | Jul. 02, 2016 | Oct. 01, 2016 | Oct. 03, 2015 | Jan. 02, 2016 | |
Liquidity | ||||||||
Operating income (loss) | $ (946,716) | $ 177,130 | $ (121,519) | $ (913,014) | ||||
Net (loss) | (954,390) | $ (82,667) | $ 255,625 | (3,716) | $ 172,958 | (781,432) | (1,344,423) | |
Cash and cash equivalents | $ 2,264,756 | $ 3,370,219 | $ 4,708,642 | $ 3,370,219 | $ 2,264,756 | $ 4,708,642 | $ 5,549,672 |
Significant Accounting Polici29
Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||
Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Oct. 03, 2015 | Jul. 02, 2016 | Oct. 01, 2016 | Oct. 03, 2015 | |
Cash Flows From Operating Activities | |||||||
Net income (loss) | $ (954,390) | $ (82,667) | $ 255,625 | $ (3,716) | $ 172,958 | $ (781,432) | $ (1,344,423) |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | 1,292,250 | ||||||
Changes in operating assets and liabilities: | (4,171,503) | ||||||
Net cash used in operating activities | (2,706,295) | (3,127,782) | (1,257,562) | ||||
Cash Flows From Investing Activities | |||||||
Purchases of leasehold improvements and equipment | (231,201) | (940,978) | (242,765) | ||||
Purchases of intangible assets | (195,000) | (205,000) | (107,500) | ||||
Net cash used in investing activities | (426,201) | (1,145,978) | (350,265) | ||||
Cash Flows From Financing Activities | |||||||
Proceeds from issuance of common stock, net of issuance costs | 5,720,000 | 5,717,474 | 0 | ||||
Proceeds from exercise of stock options | 622,384 | 716,612 | 25,266 | ||||
Principal payments on loan payable | (5,000,000) | (5,000,000) | 0 | ||||
Cash paid for debt extinguishment costs | (281,092) | (281,092) | 0 | ||||
Principal payments on capital leases | (108,249) | (164,150) | (158,547) | ||||
Net cash provided by financing activities | 953,043 | 988,844 | 2,351,719 | ||||
Net decrease in cash | (2,179,453) | (3,284,916) | 743,892 | ||||
Cash Beginning of Period | 5,549,672 | 5,549,672 | 3,964,750 | ||||
Cash Ending of Period | $ 2,264,756 | 3,370,219 | $ 4,708,642 | 3,370,219 | $ 2,264,756 | $ 4,708,642 | |
Previously Reported [Member] | |||||||
Cash Flows From Operating Activities | |||||||
Net income (loss) | 172,958 | ||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | 1,011,158 | ||||||
Changes in operating assets and liabilities: | (4,171,503) | ||||||
Net cash used in operating activities | (2,987,387) | ||||||
Cash Flows From Investing Activities | |||||||
Purchases of leasehold improvements and equipment | (231,201) | ||||||
Purchases of intangible assets | (195,000) | ||||||
Net cash used in investing activities | (426,201) | ||||||
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 | ||||||
Principal payments on loan payable | (5,000,000) | ||||||
Cash paid for debt extinguishment costs | 0 | ||||||
Principal payments on capital leases | (108,249) | ||||||
Net cash provided by financing activities | 1,234,135 | ||||||
Net decrease in cash | (2,179,453) | ||||||
Cash Beginning of Period | 5,549,672 | ||||||
Cash Ending of Period | 3,370,219 | 3,370,219 | |||||
Adjustments [Member] | |||||||
Cash Flows From Operating Activities | |||||||
Net income (loss) | 0 | ||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | 281,092 | ||||||
Changes in operating assets and liabilities: | 0 | ||||||
Net cash used in operating activities | 281,092 | ||||||
Cash Flows From Investing Activities | |||||||
Purchases of leasehold improvements and equipment | 0 | ||||||
Purchases of intangible assets | 0 | ||||||
Net cash used in investing activities | 0 | ||||||
Cash Flows From Financing Activities | |||||||
Proceeds from issuance of common stock, net of issuance costs | 0 | ||||||
Proceeds from exercise of stock options | 0 | ||||||
Principal payments on loan payable | 0 | ||||||
Cash paid for debt extinguishment costs | (281,092) | ||||||
Principal payments on capital leases | 0 | ||||||
Net cash provided by financing activities | (281,092) | ||||||
Net decrease in cash | 0 | ||||||
Cash Beginning of Period | 0 | ||||||
Cash Ending of Period | $ 0 | $ 0 |
Significant Accounting Polici30
Significant Accounting Policies (Details 1) - USD ($) | Oct. 01, 2016 | Jan. 02, 2016 |
Inventories | ||
Natural product fine chemicals | $ 1,024,213 | $ 1,239,338 |
Bulk ingredients | 5,388,696 | 7,195,461 |
Inventory-gross | 6,412,909 | 8,434,799 |
Less valuation allowance | (100,000) | (261,000) |
Inventory-net | $ 6,312,909 | $ 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 Applicable32
Earnings Per Share Applicable to Common Stockholders (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||
Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Oct. 03, 2015 | Jul. 02, 2016 | Oct. 01, 2016 | Oct. 03, 2015 | ||
Net income (loss) | $ (954,390) | $ (82,667) | $ 255,625 | $ (3,716) | $ 172,958 | $ (781,432) | $ (1,344,423) | |
Basic and diluted loss per common share | $ (0.03) | $ 0 | $ (0.02) | $ (0.04) | ||||
Basic and diluted weighted average common shares outstanding | [1] | 37,868,672 | 35,814,305 | 37,090,916 | 35,783,490 | |||
Stock Option [Member] | ||||||||
Potentially dilutive securities | ||||||||
Potentially dilutive securities | [2] | 5,217,508 | 5,279,868 | 5,217,508 | 5,279,868 | |||
Warrant [Member] | ||||||||
Potentially dilutive securities | ||||||||
Potentially dilutive securities | [2] | 487,111 | 156,340 | 487,111 | 156,340 | |||
Convertible Debt [Member] | ||||||||
Potentially dilutive securities | ||||||||
Potentially dilutive securities | [2] | 0 | 257,798 | 0 | 257,798 | |||
[1] | Includes approximately 0.4 million nonvested restricted stock for all periods presented, which are participating securities that feature voting and dividend rights. | |||||||
[2] | Excluded from the computation of loss per share as their impact is antidilutive. |
Loan Payable (Details)
Loan Payable (Details) | Oct. 01, 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) | Oct. 01, 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) | 3 Months Ended |
Oct. 01, 2016USD ($) | |
Debt Disclosure [Abstract] | |
Total payoff amount | $ 4,835,752 |
Total carrying amount | 4,522,653 |
Loss on debt extinguishment | $ (313,099) |
Employee Share-Based Compensa36
Employee Share-Based Compensation (Details) | 9 Months Ended |
Oct. 01, 2016USD ($)$ / sharesshares | |
Service Period Based Stock Options | |
Outstanding at Beginning of Period | shares | 4,314,264 |
Options Granted | shares | 579,148 |
Options Exercised | shares | (238,423) |
Options Forfeited | shares | (326,663) |
Outstanding at End of Period | shares | 4,328,326 |
Exercisable at End of Period | shares | 3,314,918 |
Weighted Average Exercise Price | |
Outstanding at Beginning of Period | $ 3.50 |
Options Granted | 4.27 |
Options Exercised | 2.67 |
Options Forfeited | 4.15 |
Outstanding at End of Period | 3.60 |
Exercisable at End of Period | $ 3.46 |
Weighted Average Remaining Contractual Term | |
Outstanding at Beginning of Period | 6 years 5 months 8 days |
Options Granted | 10 years |
Outstanding at End of Period | 6 years 2 months 12 days |
Exercisable at End of Period | 5 years 3 months 22 days |
Weighted Average Fair Value | |
Weighted Average Fair Value Option Granted | $ 2.71 |
Aggregate Intrinsic Value | |
Exercised | $ | $ 502,000 |
Outstanding at End of Period | $ | 684,000 |
Exercisable at End of Period | $ | $ 668,000 |
Employee Share-Based Compensa37
Employee Share-Based Compensation (Details 1) | Mar. 11, 2016 | Oct. 01, 2016 |
Employee Share-based Compensation Details 1 | ||
Expected term | 3 years | 6 years |
Expected volatility | 60.00% | 73.00% |
Expected dividends | 0.00% | 0.00% |
Risk-free rate | 1.16% | 1.33% |
Employee Share-Based Compensa38
Employee Share-Based Compensation (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2016 | Oct. 03, 2015 | Oct. 01, 2016 | Oct. 03, 2015 | |
Employee Share-based Compensation Details Narrative | ||||
Closing stock price | $ 2.98 | $ 2.98 | ||
Unrecognized compensation expense | $ 2,271,000 | $ 2,271,000 | ||
Cost is expected to be recognized over a weighted average period | 3 years | |||
Recognized compensation expense | $ 260,000 | $ 418,000 | $ 881,000 | $ 1,238,000 |
Stock Issuance (Details)
Stock Issuance (Details) - $ / shares | Mar. 11, 2016 | Oct. 01, 2016 |
Stock Issuance Details | ||
Fair value of common stock | $ 4.41 | |
Contractual term | 3 years | 6 years |
Volatility | 60.00% | 73.00% |
Risk-free rate | 1.16% | 1.33% |
Expected dividends | 0.00% | 0.00% |
Stock Issuance (Details Narrati
Stock Issuance (Details Narrative) - USD ($) | Jun. 03, 2016 | Mar. 11, 2016 |
Stock Issuance Details | ||
Securities Purchase Agreement | $ 5,250,000 | $ 500,000 |
Units sold | 117,022 | 128,205 |
Sale price per unit | $ 4.70 | $ 3.90 |
Warrant issued | 64,103 |
Business Segments (Details)
Business Segments (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Oct. 01, 2016 | Oct. 03, 2015 | Oct. 01, 2016 | Oct. 03, 2015 | Jan. 02, 2016 | |
Business Segmentation | |||||
Net sales | $ 5,007,450 | $ 6,287,309 | $ 21,168,974 | $ 17,649,660 | |
Cost of sales | 2,964,980 | 3,805,679 | 11,547,638 | 10,769,714 | |
Gross profit | 2,042,470 | 2,481,630 | 9,621,336 | 6,879,946 | |
Operating expenses: | |||||
Sales and marketing | 447,985 | 550,878 | 1,690,738 | 1,776,403 | |
Research and development | 772,799 | 188,690 | 1,988,597 | 485,195 | |
General and administrative | 1,768,402 | 1,564,932 | 6,063,520 | 5,531,362 | |
Operating expenses | 2,989,186 | 2,304,500 | 9,742,855 | 7,792,960 | |
Operating income (loss) | (946,716) | 177,130 | (121,519) | (913,014) | |
Total assets | 18,763,690 | 18,763,690 | $ 18,749,209 | ||
Ingredients Segment [Member] | |||||
Business Segmentation | |||||
Net sales | 2,663,095 | 4,146,597 | 13,505,470 | 10,238,574 | |
Cost of sales | 1,287,421 | 2,157,183 | 6,420,972 | 5,629,564 | |
Gross profit | 1,375,674 | 1,989,414 | 7,084,498 | 4,609,010 | |
Operating expenses: | |||||
Sales and marketing | 199,130 | 259,874 | 930,573 | 832,779 | |
Research and development | 760,299 | 188,690 | 1,961,097 | 485,195 | |
General and administrative | 0 | 0 | 0 | 0 | |
Operating expenses | 959,429 | 448,564 | 2,891,670 | 1,317,974 | |
Operating income (loss) | 416,245 | 1,540,850 | 4,192,828 | 3,291,036 | |
Total assets | 12,051,865 | 12,051,865 | 9,105,502 | ||
Core Standards and Contract Services Segment [Member] | |||||
Business Segmentation | |||||
Net sales | 2,052,135 | 1,875,296 | 7,110,783 | 6,546,816 | |
Cost of sales | 1,548,268 | 1,533,402 | 4,781,539 | 4,742,480 | |
Gross profit | 503,867 | 341,894 | 2,329,244 | 1,804,336 | |
Operating expenses: | |||||
Sales and marketing | 245,255 | 287,901 | 749,165 | 935,237 | |
Research and development | 12,500 | 0 | 27,500 | 0 | |
General and administrative | 0 | 0 | 0 | 0 | |
Operating expenses | 257,755 | 287,901 | 776,665 | 935,237 | |
Operating income (loss) | 246,112 | 53,993 | 1,552,579 | 869,099 | |
Total assets | 3,645,554 | 3,645,554 | 3,306,624 | ||
Scientific and Regulatory Consulting Segment [Member] | |||||
Business Segmentation | |||||
Net sales | 292,220 | 265,416 | 552,721 | 864,270 | |
Cost of sales | 129,291 | 115,094 | 345,127 | 397,670 | |
Gross profit | 162,929 | 150,322 | 207,594 | 466,600 | |
Operating expenses: | |||||
Sales and marketing | 3,600 | 3,103 | 11,000 | 8,387 | |
Research and development | 0 | 0 | 0 | 0 | |
General and administrative | 0 | 0 | 0 | 0 | |
Operating expenses | 3,600 | 3,103 | 11,000 | 8,387 | |
Operating income (loss) | 159,329 | 147,219 | 196,594 | 458,213 | |
Total assets | 166,027 | 166,027 | 111,765 | ||
Other Segment [Member] | |||||
Business Segmentation | |||||
Net sales | 0 | 0 | 0 | 0 | |
Cost of sales | 0 | 0 | 0 | 0 | |
Gross profit | 0 | 0 | 0 | 0 | |
Operating expenses: | |||||
Sales and marketing | 0 | 0 | 0 | 0 | |
Research and development | 0 | 0 | 0 | 0 | |
General and administrative | 1,768,402 | 1,564,932 | 6,063,520 | 5,531,362 | |
Operating expenses | 1,768,402 | 1,564,932 | 6,063,520 | 5,531,362 | |
Operating income (loss) | (1,768,402) | $ (1,564,932) | (6,063,520) | $ (5,531,362) | |
Total assets | $ 2,900,244 | $ 2,900,244 | $ 6,225,318 |
Business Segments (Details 1)
Business Segments (Details 1) | 3 Months Ended | 9 Months Ended | |||||||
Oct. 01, 2016 | Jan. 02, 2016 | Oct. 03, 2015 | Oct. 01, 2016 | Oct. 03, 2015 | |||||
Customer D [Member] | Ingredients and Core Segment [Member] | |||||||||
Customer concentration risk | 12.30% | [1] | [1] | [1] | |||||
Customer C [Member] | Ingredients Segment [Member] | |||||||||
Customer concentration risk | [1] | [1] | 24.50% | [1] | |||||
Customer B [Member] | Ingredients Segment [Member] | |||||||||
Customer concentration risk | [1] | 19.10% | [1] | 13.80% | |||||
Customer D Receivables [Member] | Ingredients and Core Segment [Member] | |||||||||
Customer concentration risk | 22.80% | ||||||||
Customer C Receivables [Member] | Ingredients and Core Segment [Member] | |||||||||
Customer concentration risk | 48.80% | ||||||||
Customer A Receivables [Member] | Ingredients and Core Segment [Member] | |||||||||
Customer concentration risk | 14.70% | ||||||||
[1] | Represents less than 10% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - Related Party [Member] | 9 Months Ended |
Oct. 01, 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 up to a certain amount, 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. |
Equity interest received | 4.00% |
Supply charges recorded as long term investment | $ 20,000 |
Commitments and Contingencies44
Commitments and Contingencies (Details) | Oct. 01, 2016USD ($) |
Commitments And Contingencies Details | |
2,016 | $ 241,000 |
2,017 | 439,000 |
2,018 | 451,000 |
2,019 | 466,000 |
2,020 | 481,000 |
Thereafter | $ 1,146,000 |
Commitments and Contingencies45
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 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | 9 Months Ended |
Oct. 01, 2016USD ($) | |
Subsequent Events [Abstract] | |
Line of credit maximum borrowing capacity | $ 5,000,000 |
Facility fee | 25,000 |
Due diligence fee | 900 |
Consulting fee | $ 100,000 |