0001386570false12-31Q32024falsehttp://fasb.org/us-gaap/2024#AccountingStandardsUpdate201613Member000.33330.33330.66670.33330.3333Subsequent Events Effective October [XX], 2024, the Company entered into a [insert agreement or amendment name] (the "Settlement Agreement") with the Trustees of Dartmouth College ("Dartmouth"). Under the terms of the Settlement Agreement, Dartmouth has agreed to waive all royalty and license maintenance fees owed by the Company, which currently total an aggregate of approximately $3.5 million, and no additional royalties, license fees, maintenance or other expenses or other payments will be assessed by Dartmouth or payable by the Company to Dartmouth for the Dartmouth Patents after the effective date of the Settlement Agreement. This waiver is contingent upon the Company securing a court surety bond within 30 days following the final judgment in the Delaware patent infringement case against Elysium. For more information about the litigation see Note 10, Commitments and Contingencies, “(C) Delaware - Patent Infringement Action”.3.530xbrli:sharesiso4217:USDiso4217:USDxbrli:sharescdcx:reportable_segmentxbrli:purecdcx:agreementcdcx:lawsuitcdcx:director00013865702024-01-012024-09-3000013865702024-10-2900013865702023-12-3100013865702024-09-300001386570us-gaap:RelatedPartyMember2024-09-300001386570us-gaap:RelatedPartyMember2023-12-3100013865702024-07-012024-09-3000013865702023-07-012023-09-3000013865702023-01-012023-09-300001386570us-gaap:CommonStockMember2024-06-300001386570us-gaap:AdditionalPaidInCapitalMember2024-06-300001386570us-gaap:RetainedEarningsMember2024-06-300001386570cdcx:CumulativeTranslationAdjustmentsMember2024-06-3000013865702024-06-300001386570us-gaap:CommonStockMember2024-07-012024-09-300001386570us-gaap:AdditionalPaidInCapitalMember2024-07-012024-09-300001386570cdcx:CumulativeTranslationAdjustmentsMember2024-07-012024-09-300001386570us-gaap:RetainedEarningsMember2024-07-012024-09-300001386570us-gaap:CommonStockMember2024-09-300001386570us-gaap:AdditionalPaidInCapitalMember2024-09-300001386570us-gaap:RetainedEarningsMember2024-09-300001386570cdcx:CumulativeTranslationAdjustmentsMember2024-09-300001386570us-gaap:CommonStockMember2023-06-300001386570us-gaap:AdditionalPaidInCapitalMember2023-06-300001386570us-gaap:RetainedEarningsMember2023-06-300001386570cdcx:CumulativeTranslationAdjustmentsMember2023-06-3000013865702023-06-300001386570us-gaap:CommonStockMember2023-07-012023-09-300001386570us-gaap:AdditionalPaidInCapitalMember2023-07-012023-09-300001386570us-gaap:RetainedEarningsMember2023-07-012023-09-300001386570us-gaap:CommonStockMember2023-09-300001386570us-gaap:AdditionalPaidInCapitalMember2023-09-300001386570us-gaap:RetainedEarningsMember2023-09-300001386570cdcx:CumulativeTranslationAdjustmentsMember2023-09-3000013865702023-09-300001386570us-gaap:CommonStockMember2023-12-310001386570us-gaap:AdditionalPaidInCapitalMember2023-12-310001386570us-gaap:RetainedEarningsMember2023-12-310001386570cdcx:CumulativeTranslationAdjustmentsMember2023-12-310001386570us-gaap:CommonStockMember2024-01-012024-09-300001386570us-gaap:AdditionalPaidInCapitalMember2024-01-012024-09-300001386570cdcx:CumulativeTranslationAdjustmentsMember2024-01-012024-09-300001386570us-gaap:RetainedEarningsMember2024-01-012024-09-300001386570us-gaap:CommonStockMember2022-12-310001386570us-gaap:AdditionalPaidInCapitalMember2022-12-310001386570us-gaap:RetainedEarningsMember2022-12-310001386570cdcx:CumulativeTranslationAdjustmentsMember2022-12-3100013865702022-12-310001386570us-gaap:CommonStockMember2023-01-012023-09-300001386570us-gaap:AdditionalPaidInCapitalMember2023-01-012023-09-300001386570cdcx:CumulativeTranslationAdjustmentsMember2023-01-012023-09-3000013865702022-01-012022-12-310001386570srt:CumulativeEffectPeriodOfAdoptionAdjustmentMemberus-gaap:RetainedEarningsMember2022-12-310001386570srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2022-12-310001386570us-gaap:RetainedEarningsMember2023-01-012023-09-300001386570srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2023-12-310001386570us-gaap:StockOptionMember2024-07-012024-09-300001386570us-gaap:StockOptionMember2023-07-012023-09-300001386570us-gaap:StockOptionMember2024-01-012024-09-300001386570us-gaap:StockOptionMember2023-01-012023-09-300001386570us-gaap:RestrictedStockUnitsRSUMember2024-07-012024-09-300001386570us-gaap:RestrictedStockUnitsRSUMember2023-07-012023-09-300001386570us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-09-300001386570us-gaap:RestrictedStockUnitsRSUMember2023-01-012023-09-300001386570us-gaap:OperatingSegmentsMembercdcx:ConsumerProductsSegmentMember2024-07-012024-09-300001386570us-gaap:OperatingSegmentsMembercdcx:IngredientsSegmentMember2024-07-012024-09-300001386570us-gaap:OperatingSegmentsMembercdcx:AnalyticalReferenceStandardsAndServicesSegmentMember2024-07-012024-09-300001386570cdcx:CorporateAndReconcilingItemsMember2024-07-012024-09-300001386570us-gaap:OperatingSegmentsMembercdcx:ConsumerProductsSegmentMember2023-07-012023-09-300001386570us-gaap:OperatingSegmentsMembercdcx:IngredientsSegmentMember2023-07-012023-09-300001386570us-gaap:OperatingSegmentsMembercdcx:AnalyticalReferenceStandardsAndServicesSegmentMember2023-07-012023-09-300001386570cdcx:CorporateAndReconcilingItemsMember2023-07-012023-09-300001386570us-gaap:OperatingSegmentsMembercdcx:ConsumerProductsSegmentMember2024-01-012024-09-300001386570us-gaap:OperatingSegmentsMembercdcx:IngredientsSegmentMember2024-01-012024-09-300001386570us-gaap:OperatingSegmentsMembercdcx:AnalyticalReferenceStandardsAndServicesSegmentMember2024-01-012024-09-300001386570cdcx:CorporateAndReconcilingItemsMember2024-01-012024-09-300001386570us-gaap:OperatingSegmentsMembercdcx:ConsumerProductsSegmentMember2023-01-012023-09-300001386570us-gaap:OperatingSegmentsMembercdcx:IngredientsSegmentMember2023-01-012023-09-300001386570us-gaap:OperatingSegmentsMembercdcx:AnalyticalReferenceStandardsAndServicesSegmentMember2023-01-012023-09-300001386570cdcx:CorporateAndReconcilingItemsMember2023-01-012023-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:TRUNIAGENConsumerProductMember2024-07-012024-09-300001386570cdcx:IngredientsSegmentMembercdcx:TRUNIAGENConsumerProductMember2024-07-012024-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:TRUNIAGENConsumerProductMember2024-07-012024-09-300001386570cdcx:TRUNIAGENConsumerProductMember2024-07-012024-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:FoodGradeNIAGENMember2024-07-012024-09-300001386570cdcx:IngredientsSegmentMembercdcx:FoodGradeNIAGENMember2024-07-012024-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:FoodGradeNIAGENMember2024-07-012024-09-300001386570cdcx:FoodGradeNIAGENMember2024-07-012024-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:PharmaceuticalGradeNIAGENMember2024-07-012024-09-300001386570cdcx:IngredientsSegmentMembercdcx:PharmaceuticalGradeNIAGENMember2024-07-012024-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:PharmaceuticalGradeNIAGENMember2024-07-012024-09-300001386570cdcx:PharmaceuticalGradeNIAGENMember2024-07-012024-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:NIAGENRelatedMember2024-07-012024-09-300001386570cdcx:IngredientsSegmentMembercdcx:NIAGENRelatedMember2024-07-012024-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:NIAGENRelatedMember2024-07-012024-09-300001386570cdcx:NIAGENRelatedMember2024-07-012024-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:OtherIngredientsMember2024-07-012024-09-300001386570cdcx:IngredientsSegmentMembercdcx:OtherIngredientsMember2024-07-012024-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:OtherIngredientsMember2024-07-012024-09-300001386570cdcx:OtherIngredientsMember2024-07-012024-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:ReferenceStandardsMember2024-07-012024-09-300001386570cdcx:IngredientsSegmentMembercdcx:ReferenceStandardsMember2024-07-012024-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:ReferenceStandardsMember2024-07-012024-09-300001386570cdcx:ReferenceStandardsMember2024-07-012024-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:ConsultingAndOtherMember2024-07-012024-09-300001386570cdcx:IngredientsSegmentMembercdcx:ConsultingAndOtherMember2024-07-012024-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:ConsultingAndOtherMember2024-07-012024-09-300001386570cdcx:ConsultingAndOtherMember2024-07-012024-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:OtherGoodsAndServicesMember2024-07-012024-09-300001386570cdcx:IngredientsSegmentMembercdcx:OtherGoodsAndServicesMember2024-07-012024-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:OtherGoodsAndServicesMember2024-07-012024-09-300001386570cdcx:OtherGoodsAndServicesMember2024-07-012024-09-300001386570cdcx:ConsumerProductsSegmentMember2024-07-012024-09-300001386570cdcx:IngredientsSegmentMember2024-07-012024-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMember2024-07-012024-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:TRUNIAGENConsumerProductMember2023-07-012023-09-300001386570cdcx:IngredientsSegmentMembercdcx:TRUNIAGENConsumerProductMember2023-07-012023-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:TRUNIAGENConsumerProductMember2023-07-012023-09-300001386570cdcx:TRUNIAGENConsumerProductMember2023-07-012023-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:FoodGradeNIAGENMember2023-07-012023-09-300001386570cdcx:IngredientsSegmentMembercdcx:FoodGradeNIAGENMember2023-07-012023-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:FoodGradeNIAGENMember2023-07-012023-09-300001386570cdcx:FoodGradeNIAGENMember2023-07-012023-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:PharmaceuticalGradeNIAGENMember2023-07-012023-09-300001386570cdcx:IngredientsSegmentMembercdcx:PharmaceuticalGradeNIAGENMember2023-07-012023-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:PharmaceuticalGradeNIAGENMember2023-07-012023-09-300001386570cdcx:PharmaceuticalGradeNIAGENMember2023-07-012023-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:NIAGENRelatedMember2023-07-012023-09-300001386570cdcx:IngredientsSegmentMembercdcx:NIAGENRelatedMember2023-07-012023-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:NIAGENRelatedMember2023-07-012023-09-300001386570cdcx:NIAGENRelatedMember2023-07-012023-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:OtherIngredientsMember2023-07-012023-09-300001386570cdcx:IngredientsSegmentMembercdcx:OtherIngredientsMember2023-07-012023-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:OtherIngredientsMember2023-07-012023-09-300001386570cdcx:OtherIngredientsMember2023-07-012023-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:ReferenceStandardsMember2023-07-012023-09-300001386570cdcx:IngredientsSegmentMembercdcx:ReferenceStandardsMember2023-07-012023-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:ReferenceStandardsMember2023-07-012023-09-300001386570cdcx:ReferenceStandardsMember2023-07-012023-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:ConsultingAndOtherMember2023-07-012023-09-300001386570cdcx:IngredientsSegmentMembercdcx:ConsultingAndOtherMember2023-07-012023-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:ConsultingAndOtherMember2023-07-012023-09-300001386570cdcx:ConsultingAndOtherMember2023-07-012023-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:OtherGoodsAndServicesMember2023-07-012023-09-300001386570cdcx:IngredientsSegmentMembercdcx:OtherGoodsAndServicesMember2023-07-012023-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:OtherGoodsAndServicesMember2023-07-012023-09-300001386570cdcx:OtherGoodsAndServicesMember2023-07-012023-09-300001386570cdcx:ConsumerProductsSegmentMember2023-07-012023-09-300001386570cdcx:IngredientsSegmentMember2023-07-012023-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMember2023-07-012023-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:TRUNIAGENConsumerProductMember2024-01-012024-09-300001386570cdcx:IngredientsSegmentMembercdcx:TRUNIAGENConsumerProductMember2024-01-012024-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:TRUNIAGENConsumerProductMember2024-01-012024-09-300001386570cdcx:TRUNIAGENConsumerProductMember2024-01-012024-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:FoodGradeNIAGENMember2024-01-012024-09-300001386570cdcx:IngredientsSegmentMembercdcx:FoodGradeNIAGENMember2024-01-012024-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:FoodGradeNIAGENMember2024-01-012024-09-300001386570cdcx:FoodGradeNIAGENMember2024-01-012024-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:PharmaceuticalGradeNIAGENMember2024-01-012024-09-300001386570cdcx:IngredientsSegmentMembercdcx:PharmaceuticalGradeNIAGENMember2024-01-012024-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:PharmaceuticalGradeNIAGENMember2024-01-012024-09-300001386570cdcx:PharmaceuticalGradeNIAGENMember2024-01-012024-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:NIAGENRelatedMember2024-01-012024-09-300001386570cdcx:IngredientsSegmentMembercdcx:NIAGENRelatedMember2024-01-012024-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:NIAGENRelatedMember2024-01-012024-09-300001386570cdcx:NIAGENRelatedMember2024-01-012024-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:OtherIngredientsMember2024-01-012024-09-300001386570cdcx:IngredientsSegmentMembercdcx:OtherIngredientsMember2024-01-012024-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:OtherIngredientsMember2024-01-012024-09-300001386570cdcx:OtherIngredientsMember2024-01-012024-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:ReferenceStandardsMember2024-01-012024-09-300001386570cdcx:IngredientsSegmentMembercdcx:ReferenceStandardsMember2024-01-012024-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:ReferenceStandardsMember2024-01-012024-09-300001386570cdcx:ReferenceStandardsMember2024-01-012024-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:ConsultingAndOtherMember2024-01-012024-09-300001386570cdcx:IngredientsSegmentMembercdcx:ConsultingAndOtherMember2024-01-012024-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:ConsultingAndOtherMember2024-01-012024-09-300001386570cdcx:ConsultingAndOtherMember2024-01-012024-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:OtherGoodsAndServicesMember2024-01-012024-09-300001386570cdcx:IngredientsSegmentMembercdcx:OtherGoodsAndServicesMember2024-01-012024-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:OtherGoodsAndServicesMember2024-01-012024-09-300001386570cdcx:OtherGoodsAndServicesMember2024-01-012024-09-300001386570cdcx:ConsumerProductsSegmentMember2024-01-012024-09-300001386570cdcx:IngredientsSegmentMember2024-01-012024-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMember2024-01-012024-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:TRUNIAGENConsumerProductMember2023-01-012023-09-300001386570cdcx:IngredientsSegmentMembercdcx:TRUNIAGENConsumerProductMember2023-01-012023-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:TRUNIAGENConsumerProductMember2023-01-012023-09-300001386570cdcx:TRUNIAGENConsumerProductMember2023-01-012023-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:FoodGradeNIAGENMember2023-01-012023-09-300001386570cdcx:IngredientsSegmentMembercdcx:FoodGradeNIAGENMember2023-01-012023-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:FoodGradeNIAGENMember2023-01-012023-09-300001386570cdcx:FoodGradeNIAGENMember2023-01-012023-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:PharmaceuticalGradeNIAGENMember2023-01-012023-09-300001386570cdcx:IngredientsSegmentMembercdcx:PharmaceuticalGradeNIAGENMember2023-01-012023-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:PharmaceuticalGradeNIAGENMember2023-01-012023-09-300001386570cdcx:PharmaceuticalGradeNIAGENMember2023-01-012023-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:NIAGENRelatedMember2023-01-012023-09-300001386570cdcx:IngredientsSegmentMembercdcx:NIAGENRelatedMember2023-01-012023-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:NIAGENRelatedMember2023-01-012023-09-300001386570cdcx:NIAGENRelatedMember2023-01-012023-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:OtherIngredientsMember2023-01-012023-09-300001386570cdcx:IngredientsSegmentMembercdcx:OtherIngredientsMember2023-01-012023-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:OtherIngredientsMember2023-01-012023-09-300001386570cdcx:OtherIngredientsMember2023-01-012023-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:ReferenceStandardsMember2023-01-012023-09-300001386570cdcx:IngredientsSegmentMembercdcx:ReferenceStandardsMember2023-01-012023-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:ReferenceStandardsMember2023-01-012023-09-300001386570cdcx:ReferenceStandardsMember2023-01-012023-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:ConsultingAndOtherMember2023-01-012023-09-300001386570cdcx:IngredientsSegmentMembercdcx:ConsultingAndOtherMember2023-01-012023-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:ConsultingAndOtherMember2023-01-012023-09-300001386570cdcx:ConsultingAndOtherMember2023-01-012023-09-300001386570cdcx:ConsumerProductsSegmentMembercdcx:OtherGoodsAndServicesMember2023-01-012023-09-300001386570cdcx:IngredientsSegmentMembercdcx:OtherGoodsAndServicesMember2023-01-012023-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMembercdcx:OtherGoodsAndServicesMember2023-01-012023-09-300001386570cdcx:OtherGoodsAndServicesMember2023-01-012023-09-300001386570cdcx:ConsumerProductsSegmentMember2023-01-012023-09-300001386570cdcx:IngredientsSegmentMember2023-01-012023-09-300001386570cdcx:AnalyticalReferenceStandardsAndServicesSegmentMember2023-01-012023-09-300001386570us-gaap:CustomerConcentrationRiskMemberus-gaap:RelatedPartyMembercdcx:ConsumerProductsSegmentMembercdcx:ASWatsonGroupMemberus-gaap:SalesRevenueNetMember2023-07-012023-09-300001386570us-gaap:CustomerConcentrationRiskMemberus-gaap:RelatedPartyMembercdcx:ConsumerProductsSegmentMembercdcx:ASWatsonGroupMemberus-gaap:SalesRevenueNetMember2024-01-012024-09-300001386570us-gaap:CustomerConcentrationRiskMemberus-gaap:RelatedPartyMembercdcx:ConsumerProductsSegmentMembercdcx:ASWatsonGroupMemberus-gaap:SalesRevenueNetMember2023-01-012023-09-300001386570cdcx:LifeExtensionMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMembercdcx:ConsumerProductsSegmentMember2024-07-012024-09-300001386570cdcx:LifeExtensionMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:SalesRevenueNetMembercdcx:ConsumerProductsSegmentMember2024-01-012024-09-300001386570cdcx:ASWatsonGroupMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RelatedPartyMemberus-gaap:AccountsReceivableMember2024-01-012024-09-300001386570cdcx:ASWatsonGroupMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:RelatedPartyMemberus-gaap:AccountsReceivableMember2023-01-012023-12-310001386570cdcx:AmazonMarketplacesMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2023-01-012023-12-310001386570cdcx:LifeExtensionMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2024-01-012024-09-300001386570cdcx:LifeExtensionMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2023-01-012023-12-310001386570cdcx:WellsPharmaOfHoustonMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2024-01-012024-09-300001386570cdcx:ThreeCustomersMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2024-01-012024-09-300001386570us-gaap:RelatedPartyMembercdcx:ASWatsonGroupMember2024-07-012024-09-300001386570us-gaap:RelatedPartyMembercdcx:ASWatsonGroupMember2023-07-012023-09-300001386570us-gaap:RelatedPartyMembercdcx:ASWatsonGroupMember2024-01-012024-09-300001386570us-gaap:RelatedPartyMembercdcx:ASWatsonGroupMember2023-01-012023-09-300001386570us-gaap:RelatedPartyMembercdcx:ASWatsonGroupMember2024-09-300001386570us-gaap:RelatedPartyMembercdcx:ASWatsonGroupMember2023-12-310001386570cdcx:A2017EquityIncentivePlanMember2024-09-300001386570cdcx:ShareBasedPaymentArrangementOptionOrStockAppreciationRightMembercdcx:A2017EquityIncentivePlanMember2024-09-300001386570cdcx:FullValueAwardMembercdcx:A2017EquityIncentivePlanMember2024-09-300001386570us-gaap:EmployeeStockOptionMembercdcx:A2017EquityIncentivePlanMember2024-01-012024-09-300001386570us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2024-01-012024-09-300001386570us-gaap:EmployeeStockOptionMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2024-01-012024-09-300001386570us-gaap:EmployeeStockOptionMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2024-01-012024-09-300001386570us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2024-01-012024-09-300001386570us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheThreeMember2022-04-012022-06-300001386570cdcx:ServicePeriodBasedStockOptionsMember2023-12-310001386570cdcx:ServicePeriodBasedStockOptionsMember2023-01-012023-12-310001386570cdcx:ServicePeriodBasedStockOptionsMember2024-01-012024-09-300001386570cdcx:ServicePeriodBasedStockOptionsMember2024-09-300001386570cdcx:PerformanceBasedStockOptionsMember2023-12-310001386570cdcx:PerformanceBasedStockOptionsMember2023-01-012023-12-310001386570cdcx:PerformanceBasedStockOptionsMember2024-01-012024-09-300001386570cdcx:PerformanceBasedStockOptionsMember2024-09-300001386570us-gaap:RestrictedStockUnitsRSUMember2023-12-310001386570us-gaap:RestrictedStockUnitsRSUMember2024-01-012024-09-300001386570us-gaap:RestrictedStockUnitsRSUMember2024-09-300001386570us-gaap:CostOfSalesMember2024-07-012024-09-300001386570us-gaap:CostOfSalesMember2023-07-012023-09-300001386570us-gaap:CostOfSalesMember2024-01-012024-09-300001386570us-gaap:CostOfSalesMember2023-01-012023-09-300001386570cdcx:SalesAndMarketingMember2024-07-012024-09-300001386570cdcx:SalesAndMarketingMember2023-07-012023-09-300001386570cdcx:SalesAndMarketingMember2024-01-012024-09-300001386570cdcx:SalesAndMarketingMember2023-01-012023-09-300001386570us-gaap:ResearchAndDevelopmentExpenseMember2024-07-012024-09-300001386570us-gaap:ResearchAndDevelopmentExpenseMember2023-07-012023-09-300001386570us-gaap:ResearchAndDevelopmentExpenseMember2024-01-012024-09-300001386570us-gaap:ResearchAndDevelopmentExpenseMember2023-01-012023-09-300001386570us-gaap:GeneralAndAdministrativeExpenseMember2024-07-012024-09-300001386570us-gaap:GeneralAndAdministrativeExpenseMember2023-07-012023-09-300001386570us-gaap:GeneralAndAdministrativeExpenseMember2024-01-012024-09-300001386570us-gaap:GeneralAndAdministrativeExpenseMember2023-01-012023-09-300001386570us-gaap:CommonStockMember2024-03-012024-03-010001386570us-gaap:CommonStockMember2024-03-010001386570us-gaap:EmployeeStockOptionMember2024-01-012024-09-300001386570us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2022-01-012022-03-310001386570us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2022-04-012022-06-300001386570us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2022-01-012022-03-310001386570us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheTwoMember2022-04-012022-06-300001386570cdcx:CaliforniaActionMember2019-08-162019-08-160001386570cdcx:CaliforniaActionMember2020-01-160001386570cdcx:CaliforniaActionMembercdcx:BreachOfSupplyAgreementMember2021-09-272021-09-270001386570cdcx:CaliforniaActionMembercdcx:BreachOfConfidentialityAgreementMember2021-09-272021-09-270001386570cdcx:BreachOfSupplyAgreementMembercdcx:ElysiumHealthLLCMembercdcx:CaliforniaActionMember2021-09-272021-09-270001386570cdcx:FraudulentInducementOfTheLicensingAgreementMembercdcx:ElysiumHealthLLCMembercdcx:CaliforniaActionMember2021-09-272021-09-270001386570cdcx:PunitiveDamagesMembercdcx:ElysiumHealthLLCMembercdcx:CaliforniaActionMember2021-09-272021-09-270001386570cdcx:CaliforniaActionMembercdcx:ElysiumHealthLLCMember2024-08-132024-08-130001386570cdcx:CaliforniaActionMember2024-09-032024-09-030001386570cdcx:CaliforniaActionMember2024-09-030001386570cdcx:SouthernDistrictOfNewYorkActionMember2017-09-270001386570cdcx:SouthernDistrictOfNewYorkActionMember2017-10-260001386570cdcx:SouthernDistrictOfNewYorkActionMember2017-11-030001386570us-gaap:SubsequentEventMembercdcx:ElysiumHealthLLCMember2024-10-012024-10-0100013865702019-09-3000013865702022-07-012022-09-3000013865702023-01-012023-12-310001386570cdcx:HongKongChinaTaikukGroupLtdMember2022-09-302022-09-300001386570cdcx:HongKongChinaTaikukGroupLtdMember2022-09-300001386570cdcx:ChromaDexAsiaPacificVenturesLimitedMember2022-09-302022-09-300001386570cdcx:ChromaDexAsiaPacificVenturesLimitedMember2022-09-300001386570cdcx:HongKongChinaTaikukGroupLtdMember2022-09-302022-09-300001386570cdcx:NHScSupplyAgreementMember2022-10-102022-10-100001386570us-gaap:SubsequentEventMembercdcx:TrusteesOfDartmouthCollegeMember2024-10-312024-10-31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
Commission File Number: 001-37752
| | | | | | | | |
| CHROMADEX CORPORATION | |
| (Exact Name of Registrant as Specified in its Charter) | |
| | | | | | | | |
| Delaware | | 26-2940963 |
(State or other jurisdiction of
incorporation or organization) | | (I.R.S. Employer
Identification No.) |
| | |
10900 Wilshire Blvd. Suite 600, Los Angeles, California | | 90024 |
| (Address of Principal Executive Offices) | | (Zip Code) |
Registrant's telephone number, including area code: (310) 388-6706
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | |
| Title of each class | Trading Symbol | Name of Each exchange on which registered |
| Common Stock, $0.001 par value per share | CDXC | The Nasdaq Capital Market |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. | ☑ | Yes | ☐ | No |
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). | ☑ | Yes | ☐ | No |
Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, non-accelerated filer, smaller reporting company or emerging growth company. See definition of “large accelerated filer, accelerated filer, smaller reporting company and emerging growth company” in Rule 12b-2 of the Exchange Act. | | | | |
| Large accelerated filer | ☐ | Accelerated filer | ☐ | Non-accelerated filer | ☑ | Smaller reporting company | ☑ | Emerging growth company | ☐ | | | | |
| If an emerging growth company, indicate if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | Yes | ☐ | No |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). | ☐ | Yes | ☑ | No |
As of October 29, 2024 there were 76,383,267 shares of the registrant’s common stock issued and outstanding.
ChromaDex Corporation
Quarterly Report on Form 10-Q
For the Three and Nine Months Ended September 30, 2024
Table of Contents
PART I
Item 1. FINANCIAL STATEMENTS (unaudited)
ChromaDex Corporation and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
(In thousands except par values, unless otherwise indicated)
| | | | | | | | | | | |
| September 30, 2024 | | December 31, 2023 |
| Assets | | | |
| Current assets | | | |
Cash and cash equivalents, including restricted cash of $152 for both periods presented | $ | 32,398 | | | $ | 27,325 | |
Trade receivables, net of allowances of $90 and $68, respectively; Including receivables from Related Party of $2.0 million and $2.8 million, respectively | 7,096 | | | 5,234 | |
| Inventories | 10,544 | | | 14,525 | |
| Prepaid expenses and other assets | 2,096 | | | 2,450 | |
| Total current assets | 52,134 | | | 49,534 | |
| | | |
| Leasehold improvements and equipment, net | 1,718 | | | 2,137 | |
| Intangible assets, net | 397 | | | 510 | |
| Right-of-use assets, net | 1,899 | | | 2,400 | |
| Other long-term assets | 374 | | | 383 | |
| Total assets | $ | 56,522 | | | $ | 54,964 | |
| Liabilities and Stockholders' Equity | | | |
| Current liabilities | | | |
| Accounts payable | $ | 6,903 | | | $ | 10,232 | |
| Accrued expenses | 9,592 | | | 9,493 | |
| Current maturities of operating lease obligations | 1,008 | | | 691 | |
| Current maturities of finance lease obligations | 12 | | | 11 | |
| Customer deposits | 184 | | | 195 | |
| Total current liabilities | 17,699 | | | 20,622 | |
| Deferred revenue | 2,579 | | | 3,311 | |
| Operating lease obligations, less current maturities | 1,873 | | | 2,563 | |
| Finance lease obligations, less current maturities | 2 | | | 12 | |
| Total liabilities | 22,153 | | | 26,508 | |
| | | |
Commitments and Contingencies (Note 10) | | | |
| | | |
| Stockholders' Equity | | | |
Common stock, $0.001 par value; authorized 150,000 shares; 76,027 shares and 74,981 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively | 76 | | | 75 | |
| Additional paid-in capital | 223,389 | | | 218,845 | |
| Accumulated deficit | (189,089) | | | (190,460) | |
| Cumulative translation adjustments | (7) | | | (4) | |
| | | |
| | | |
| Total stockholders' equity | 34,369 | | | 28,456 | |
| Total liabilities and stockholders' equity | $ | 56,522 | | | $ | 54,964 | |
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
ChromaDex Corporation and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations
(In thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| 2024 | | 2023 | | 2024 | | 2023 |
| Sales, net | $ | 25,580 | | | $ | 19,495 | | | $ | 70,472 | | | $ | 62,374 | |
| Cost of sales | 9,340 | | | 7,526 | | | 27,083 | | | 24,531 | |
| Gross profit | 16,240 | | | 11,969 | | | 43,389 | | | 37,843 | |
| | | | | | | |
| Operating expenses: | | | | | | | |
| Sales and marketing | 7,044 | | | 6,035 | | | 20,753 | | | 19,918 | |
| Research and development | 1,290 | | | 1,241 | | | 4,701 | | | 3,799 | |
| General and administrative | 6,304 | | | 5,840 | | | 17,320 | | | 19,557 | |
| Total operating expenses | 14,638 | | | 13,116 | | | 42,774 | | | 43,274 | |
| Operating income (loss) | 1,602 | | | (1,147) | | | 615 | | | (5,431) | |
| | | | | | | |
| Nonoperating income: | | | | | | | |
| | | | | | | |
| Interest income, net | 276 | | | 188 | | | 756 | | | 379 | |
| Net income (loss) | $ | 1,878 | | | $ | (959) | | | $ | 1,371 | | | $ | (5,052) | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Net income (loss) per share attributable to ChromaDex Corporation: |
| Basic | $ | 0.02 | | | $ | (0.01) | | | $ | 0.02 | | | $ | (0.07) | |
| Diluted | $ | 0.02 | | | $ | (0.01) | | | $ | 0.02 | | | $ | (0.07) | |
| | | | | | | |
| Weighted average common shares outstanding: |
| Basic | 75,972 | | | 75,050 | | | 75,588 | | | 74,938 | |
| Diluted | 77,768 | | | 75,050 | | | 76,804 | | | 74,938 | |
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
ChromaDex Corporation and Subsidiaries
Unaudited Condensed Consolidated Statements of Stockholders' Equity
(In thousands, unless otherwise indicated)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2024 |
| Common Stock | | Additional Paid-in Capital | | Accumulated Deficit | | Cumulative Translation Adjustments | | | | Total Stockholders' Equity |
| Shares | | Amount | | | | | |
| Balance, July 1, 2024 | 75,473 | | | $ | 75 | | | $ | 221,612 | | | $ | (190,967) | | | $ | (2) | | | | | $ | 30,718 | |
| | | | | | | | | | | | | |
| Issuance of common stock resulting from the exercise of stock options | 511 | | | 1 | | | 1,042 | | | — | | | — | | | | | 1,043 | |
| Issuance of restricted stock | 43 | | | — | | | — | | | — | | | — | | | | | — | |
| Share-based compensation | — | | | — | | | 735 | | | — | | | — | | | | | 735 | |
| Translation adjustment | — | | | — | | | — | | | — | | | (5) | | | | | (5) | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| Net income | — | | | — | | | — | | | 1,878 | | | — | | | | | 1,878 | |
| Balance, September 30, 2024 | 76,027 | | | $ | 76 | | | $ | 223,389 | | | $ | (189,089) | | | $ | (7) | | | | | $ | 34,369 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2023 |
| Common Stock | | Additional Paid-in Capital | | Accumulated Deficit | | Cumulative Translation Adjustments | | Total Stockholders' Equity |
| Shares | | Amount | | | | |
| Balance, July 1, 2023 | 74,856 | | | $ | 75 | | | $ | 216,691 | | | $ | (189,615) | | | $ | (1) | | | $ | 27,150 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Issuance of restricted stock | 54 | | | — | | | — | | | — | | | — | | | — | |
| Share-based compensation | — | | | — | | | 1,117 | | | — | | | — | | | 1,117 | |
| Translation adjustment | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | |
| Net loss | — | | | — | | | — | | | (959) | | | — | | | (959) | |
| Balance, September 30, 2023 | 74,910 | | | $ | 75 | | | $ | 217,808 | | | $ | (190,574) | | | $ | (1) | | | $ | 27,308 | |
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
ChromaDex Corporation and Subsidiaries
Unaudited Condensed Consolidated Statements of Stockholders' Equity Continued
(In thousands, unless otherwise indicated)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2024 |
| Common Stock | | Additional
Paid-in Capital | | Accumulated
Deficit | | Cumulative
Translation
Adjustments | | Total
Stockholders'
Equity |
| Shares | | Amount | | | | |
| | | | | | | | | | | |
| Balance, January 1, 2024 | 74,981 | | | $ | 75 | | | $ | 218,845 | | | $ | (190,460) | | | $ | (4) | | | $ | 28,456 | |
| | | | | | | | | | | |
| Exercise of stock options | 768 | | | 1 | | | 1,640 | | | — | | | — | | | 1,641 | |
| Issuance of restricted stock | 253 | | | — | | | — | | | — | | | — | | | — | |
| Share-based compensation | 25 | | | — | | | 2,904 | | | — | | | — | | | 2,904 | |
| Translation adjustment | — | | | — | | | — | | | — | | | (3) | | | (3) | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Net income | — | | | — | | | — | | | 1,371 | | | — | | | 1,371 | |
| Balance, September 30, 2024 | 76,027 | | | $ | 76 | | | $ | 223,389 | | | $ | (189,089) | | | $ | (7) | | | $ | 34,369 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2023 |
| Common Stock | | Additional
Paid-in Capital | | Accumulated Deficit | | Cumulative Translation Adjustments | | Total Stockholders' Equity |
| Shares | | Amount | | | | |
| Balance, January 1, 2023 | 74,567 | | | $ | 74 | | | $ | 214,094 | | | $ | (185,493) | | | $ | (3) | | | $ | 28,672 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Issuance of restricted stock | 343 | | | 1 | | | — | | | — | | | — | | | 1 | |
| Share-based compensation | — | | | — | | | 3,714 | | | — | | | — | | | 3,714 | |
| Translation adjustment | — | | | — | | | — | | | — | | | 2 | | | 2 | |
| Adjustment to retained earnings, cumulative effect of initially adopting ASC 326 | — | | | — | | | — | | | (29) | | | — | | | (29) | |
| Net loss | — | | | — | | | — | | | (5,052) | | | — | | | (5,052) | |
| Balance, September 30, 2023 | 74,910 | | | $ | 75 | | | $ | 217,808 | | | $ | (190,574) | | | $ | (1) | | | $ | 27,308 | |
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
ChromaDex Corporation and Subsidiaries
Unaudited Condensed Consolidated Statements of Cash Flows
(In thousands)
| | | | | | | | | | | |
| Nine Months Ended September 30, |
| 2024 | | 2023 |
| |
| Cash Flows From Operating Activities | | | |
| Net income (loss) | $ | 1,371 | | | $ | (5,052) | |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | | | |
| | | |
| Depreciation of leasehold improvements and equipment | 512 | | | 693 | |
| Amortization of intangibles | 113 | | | 119 | |
| Amortization of right of use assets | 501 | | | 520 | |
| Share-based compensation expense | 2,904 | | | 3,714 | |
| Gain on disposal of leasehold improvements and equipment | (19) | | | (5) | |
| Allowance for credit losses | 59 | | | 945 | |
| Non-cash financing costs | 62 | | | 60 | |
| Changes in operating assets and liabilities: | | | |
| Trade receivables | (1,921) | | | 1,907 | |
| Inventories | 3,981 | | | 2,053 | |
| Implementation costs for cloud computing arrangement | — | | | (60) | |
| Prepaid expenses and other assets | 312 | | | 767 | |
| Accounts payable | (3,329) | | | (481) | |
| Accrued expenses | 99 | | | 1,856 | |
| Deferred revenue | (732) | | | (149) | |
| Customer deposits and other | (14) | | | 35 | |
| Operating lease liabilities | (373) | | | (454) | |
| Net cash provided by operating activities | 3,526 | | | 6,468 | |
| | | |
| Cash Flows From Investing Activities | | | |
| Purchases of leasehold improvements and equipment | (94) | | | (127) | |
| Proceeds from the sale of leasehold improvements and equipment, net | 20 | | | 5 | |
| | | |
| | | |
| Net cash used in investing activities | (74) | | | (122) | |
| | | |
| Cash Flows From Financing Activities | | | |
| | | |
| Proceeds from exercise of stock options | 1,641 | | | — | |
| Payment of debt issuance costs | (11) | | | — | |
| Principal payments on finance leases | (9) | | | (14) | |
| Net cash provided by (used in) financing activities | 1,621 | | | (14) | |
| | | |
| Net increase in cash and cash equivalents | 5,073 | | | 6,332 | |
Cash and cash equivalents, including restricted cash of $152 for both periods - beginning of period | 27,325 | | | 20,441 | |
Cash and cash equivalents, including restricted cash of $152 for both periods - end of period | $ | 32,398 | | | $ | 26,773 | |
| | | |
| Supplemental Disclosures of Cash Flow Information | | | |
| | | |
| Cash payments for principal on operating lease liabilities | $ | 358 | | | $ | 508 | |
| | | |
| Supplemental Schedule of Noncash Operating Activity | | | |
| | | |
| Adjustment to retained earnings, cumulative effect of initially adopting ASC 326 | $ | — | | | $ | 29 | |
| | | |
| | | |
See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.
| | | | | | | | |
| ChromaDex Corporation and Subsidiaries | |
| Notes to the Unaudited Condensed Consolidated Financial Statements | |
Note 1. Nature of Business
ChromaDex Corporation and its wholly owned subsidiaries, ChromaDex, Inc., ChromaDex International, Inc., ChromaDex Analytics, Inc., ChromaDex Asia Limited, Asia Pacific Scientific, Inc., ChromaDex Europa B.V. and ChromaDex Sağlik Ürünleri Anonim Şirketi (collectively, “ChromaDex” or the “Company”) are a global bioscience company dedicated to healthy aging. The ChromaDex team, which includes world-renowned scientists, is pioneering research on nicotinamide adenine dinucleotide (NAD+), an essential coenzyme that is a key regulator of cellular metabolism and is found in every cell of the human body. NAD+ levels in humans have been shown to decline with age, among other factors, and may be increased through administration of NAD+ precursors.
ChromaDex is the innovator behind the NAD+ precursor nicotinamide riboside chloride (“NRC”, commonly referred to as “NR”), commercialized as the flagship ingredient Niagen®, available in both food and pharmaceutical grades. Nicotinamide riboside chloride and other NAD+ precursors are protected by ChromaDex’s patent and/or licensed rights portfolio. The Company delivers food-grade Niagen® as the sole or principal dietary ingredient in its dietary supplement consumer product line, Tru Niagen®. As part of its consumer product offerings, the Company offers NAD+ test kits exclusively to healthcare practitioners. Furthermore, the Company develops and commercializes proprietary ingredient technologies, including food-grade Niagen® and pharmaceutical-grade Niagen®, and supplies these ingredients as raw materials to the manufacturers of consumer products and U.S. FDA-registered 503B outsourcing facilities, respectively. Additionally, the Company provides natural product fine chemicals, known as phytochemicals, and related research and development services.
Note 2. Basis of Presentation and Significant Accounting Policies
Basis of Presentation: The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles” or “GAAP”) for interim financial information and the instructions to Form 10-Q and Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the interim Unaudited Condensed Consolidated Financial Statements include all adjustments, including normal recurring adjustments, necessary for a fair presentation of the financial condition, results of operations and cash flows for such periods. Results of operations for any interim period are not necessarily indicative of results for any other interim period or for the full year. These Unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s 2023 Annual Report on Form 10-K filed with the SEC on March 6, 2024.
Basis of Consolidation: The accompanying Unaudited Condensed Financial Statements and notes thereto 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.
Significant Accounting Policies: There have been no changes to the Company’s significant accounting policies described in the Company’s 2023 Annual Report on Form 10-K that have had a material impact on the Company’s Unaudited Condensed Consolidated Financial Statements and related notes.
Accounting Standards Recently Issued but Not Yet Adopted by the Company:
In October 2023, the FASB issued ASU 2023-06, “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative,” to amend certain disclosure and presentation requirements for a variety of topics within the ASC. These amendments align the requirements in the ASC to the removal of certain disclosure requirements set out in Regulation S-X and Regulation S-K, announced by the SEC. The effective date for each amended topic in the ASC is either the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or on June 30, 2027, if the SEC has not removed the requirements by that date. Early adoption is prohibited. The Company is currently evaluating the impact that the adoption of ASU 2023-06 may have on its consolidated financial statements and disclosures.
| | | | | | | | |
| ChromaDex Corporation and Subsidiaries | |
| Notes to the Unaudited Condensed Consolidated Financial Statements | |
In November 2023, the FASB issued ASU 2023 - 07, "Segment Reporting – Improvements to Reportable Segments Disclosures" (ASU 2023-07), which requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the entity's CODM. The amendments in ASU 2023-07 also expand the interim segment disclosure requirements. ASU 2023-07 will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments in this update are required to be applied on a retrospective basis. The Company is currently evaluating the impact that the adoption of ASU 2023-07 may have on its consolidated financial statements and disclosures.
In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. A public entity should apply the amendments in ASU 2023-09 prospectively to all annual periods beginning after December 15, 2024. Early adoption and retrospective application are permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures.
In March 2024, the FASB issued ASU 2024-02, "Codification Improvements." ASU 2024-02 amends the Codification to remove references to various concepts statements and impacts a variety of topics in the Codification. The amendments apply to all reporting entities within the scope of the affected accounting guidance, but in most instances the references removed are extraneous and not required to understand or apply the guidance. ASU 2024-02 will become effective January 1, 2025 and although the Company is currently evaluating the impact of this standard, it is not expected to have a significant impact on the Company’s financial statements and disclosures.
Note 3. Liquidity
Evaluation of Ability to Maintain Current Level of Operations
In connection with the preparation of these Unaudited Condensed Consolidated Financial Statements for the nine months ended September 30, 2024, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Company’s ability to meet its obligations as they became due over the next twelve months from the date of issuance of the Company’s third quarter of 2024 interim Unaudited Condensed Consolidated Financial Statements. Management assessed that there were such conditions and events, including a history of recurring operating losses and a history of negative cash flows from operating activities. For the nine months ended September 30, 2024, the Company had net income of $1.4 million and the Company’s operating activities provided cash of $3.5 million. As of September 30, 2024, the Company had unrestricted cash and cash equivalents of $32.2 million which consists of bank deposits and short-term investments, including highly liquid investment-grade debt instruments with an original maturity of three months or less. The fair value of the Company’s cash and cash equivalents is derived using Level 1 inputs.
Management evaluated these conditions and anticipates that its current unrestricted cash and cash equivalents and cash to be generated from net sales will be sufficient to meet its financial obligations as they become due over at least the next twelve months from the issuance date of these Unaudited Condensed Consolidated Financial Statements. The Company may, however, seek additional capital within the next twelve months, both to fund its projected operating plans after the next twelve months and/or to fund the Company’s longer-term strategic objectives.
| | | | | | | | |
| ChromaDex Corporation and Subsidiaries | |
| Notes to the Unaudited Condensed Consolidated Financial Statements | |
Note 4. Income (Loss) Per Share Applicable to Common Stockholders
The following table sets forth the computations of income (loss) per share amounts applicable to common stockholders for the three and nine months ended September 30, 2024 and 2023:
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| (In thousands, except per share data) | 2024 | | 2023 | | 2024 | | 2023 |
| Numerator: | | | | | | | |
| Net income (loss) | $ | 1,878 | | | $ | (959) | | | $ | 1,371 | | | $ | (5,052) | |
| | | | | | | |
| Denominator: | | | | | | | |
| Weighted average common shares outstanding for basic earnings per share (1) | 75,972 | | | 75,050 | | | 75,588 | | | 74,938 | |
| Plus: incremental shares from assumed exercise of options and assumed vesting of restricted stock (2) | 1,796 | | | — | | | 1,216 | | | — | |
| Adjusted weighted average common shares outstanding for diluted earnings per share | 77,768 | | | 75,050 | | | 76,804 | | | 74,938 | |
| | | | | | | |
| Earnings (Loss) Per Share: | | | | | | | |
| Basic net income (loss) per common share | $ | 0.02 | | | $ | (0.01) | | | $ | 0.02 | | | $ | (0.07) | |
| Diluted net income (loss) per common share | $ | 0.02 | | | $ | (0.01) | | | $ | 0.02 | | | $ | (0.07) | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
(1) Includes a weighted average of approximately 167,000 nonvested shares of restricted stock for each of the three and nine months ended September 30, 2024 and 167,000 and 177,000 nonvested shares of restricted stock for the three and nine months ended September 30, 2023, respectively, which are participating securities that feature voting and dividend rights.
(2) Options and restricted stock outstanding, which are anti-dilutive and therefore not factored into the weighted average common shares amount above, for the three and nine months ended September 30, 2024 and 2023 were as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| (In thousands) | 2024 | | 2023 | | 2024 | | 2023 |
| Stock options | 5,712 | | | 11,917 | | | 6,585 | | | 11,917 | |
| Restricted stock units | — | | | 677 | | | — | | | 677 | |
Note 5. Business Segments
The Company has the following three reportable segments:
•Consumer Products segment: provides finished dietary supplement products that contain the Company's proprietary ingredients directly to consumers and distributors and offers NAD+ test kits exclusively to healthcare practitioners;
•Ingredients segment: develops and commercializes proprietary-based ingredient technologies, including food-grade Niagen® and pharmaceutical-grade Niagen®, and supplies these ingredients as raw materials to the manufacturers of consumer products and U.S. FDA-registered 503B outsourcing facilities, respectively; and
•Analytical Reference Standards and Services segment: offers the supply of phytochemical reference standards and other research and development services.
The Company’s reportable segments are significant operating segments that offer differentiated services. This structure reflects the Company’s current operational and financial management and provides the best structure to maximize the Company's objectives and investment strategy, while maintaining financial discipline. The Company's Chief Executive Officer, who is its chief operating decision maker (CODM), reviews financial information for each operating segment to evaluate performance and allocate resources. The Company evaluates performance and allocates resources based on reviewing net sales, gross profit and operating income (loss) by reportable segment. The Company's CODM does not review assets by segment in his evaluation and therefore assets by segment are not disclosed below. There are no intersegment sales that require elimination. The “Corporate and other” classification includes corporate items not allocated by the Company to each reportable segment.
| | | | | | | | |
| ChromaDex Corporation and Subsidiaries | |
| Notes to the Unaudited Condensed Consolidated Financial Statements | |
The following tables set forth financial information by segment:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, 2024 | | Consumer Products segment | | Ingredients segment | | Analytical Reference Standards and Services segment | | Corporate and other | | Total |
| | | | |
| (In thousands) | | | | | |
| Net sales | | $ | 18,123 | | | $ | 6,673 | | | $ | 784 | | | $ | — | | | $ | 25,580 | |
| Cost of sales | | 6,512 | | | 2,176 | | | 652 | | | — | | | 9,340 | |
| Gross profit | | 11,611 | | | 4,497 | | | 132 | | | — | | | 16,240 | |
| Operating expenses: | | | | | | | | | | |
| Sales and marketing | | 6,918 | | | 6 | | | 120 | | | — | | | 7,044 | |
| Research and development | | 901 | | | 389 | | | — | | | — | | | 1,290 | |
| General and administrative | | — | | | — | | | — | | | 6,304 | | | 6,304 | |
| Operating expenses | | 7,819 | | | 395 | | | 120 | | | 6,304 | | | 14,638 | |
| | | | | | | | | | |
| Operating income (loss) | | $ | 3,792 | | | $ | 4,102 | | | $ | 12 | | | $ | (6,304) | | | $ | 1,602 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three months ended September 30, 2023 | | Consumer Products segment | | Ingredients segment | | Analytical Reference Standards and Services segment | | Corporate and other | | Total |
| | | | |
| (In thousands) | | | | | |
| Net sales | | $ | 17,400 | | | $ | 1,424 | | | $ | 671 | | | $ | — | | | $ | 19,495 | |
| Cost of sales | | 6,024 | | | 739 | | | 763 | | | — | | | 7,526 | |
| Gross profit (loss) | | 11,376 | | | 685 | | | (92) | | | — | | | 11,969 | |
| Operating expenses: | | | | | | | | | | |
| Sales and marketing | | 5,934 | | | — | | | 101 | | | — | | | 6,035 | |
| Research and development | | 1,142 | | | 99 | | | — | | | — | | | 1,241 | |
| General and administrative | | — | | | — | | | — | | | 5,840 | | | 5,840 | |
| Operating expenses | | 7,076 | | | 99 | | | 101 | | | 5,840 | | | 13,116 | |
| | | | | | | | | | |
| Operating income (loss) | | $ | 4,300 | | | $ | 586 | | | $ | (193) | | | $ | (5,840) | | | $ | (1,147) | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2024 | | Consumer Products segment | | Ingredients segment | | Analytical Reference Standards and Services segment | | Corporate and other | | Total |
| | | | |
| (In thousands) | | | | | |
| Net sales | | $ | 54,121 | | | $ | 14,062 | | | $ | 2,289 | | | $ | — | | | $ | 70,472 | |
| Cost of sales | | 19,451 | | | 5,558 | | | 2,074 | | | — | | | 27,083 | |
| Gross profit | | 34,670 | | | 8,504 | | | 215 | | | — | | | 43,389 | |
| Operating expenses: | | | | | | | | | | |
| Sales and marketing | | 20,291 | | | 84 | | | 378 | | | — | | | 20,753 | |
| Research and development | | 3,731 | | | 970 | | | — | | | — | | | 4,701 | |
| General and administrative | | — | | | — | | | — | | | 17,320 | | | 17,320 | |
| Operating expenses | | 24,022 | | | 1,054 | | | 378 | | | 17,320 | | | 42,774 | |
| | | | | | | | | | |
| Operating income (loss) | | $ | 10,648 | | | $ | 7,450 | | | $ | (163) | | | $ | (17,320) | | | $ | 615 | |
| | | | | | | | |
| ChromaDex Corporation and Subsidiaries | |
| Notes to the Unaudited Condensed Consolidated Financial Statements | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2023 | | Consumer Products segment | | Ingredients segment | | Analytical Reference Standards and Services segment | | Corporate and other | | Total |
| | | | |
| (In thousands) | | | | | |
| Net sales | | $ | 51,924 | | | $ | 8,252 | | | $ | 2,198 | | | $ | — | | | $ | 62,374 | |
| Cost of sales | | 18,387 | | | 3,852 | | | 2,292 | | | — | | | 24,531 | |
| Gross profit (loss) | | 33,537 | | | 4,400 | | | (94) | | | — | | | 37,843 | |
| Operating expenses: | | | | | | | | | | |
| Sales and marketing | | 19,599 | | | 37 | | | 282 | | | — | | | 19,918 | |
| Research and development | | 3,278 | | | 521 | | | — | | | — | | | 3,799 | |
| General and administrative | | — | | | — | | | — | | | 19,557 | | | 19,557 | |
| Operating expenses | | 22,877 | | | 558 | | | 282 | | | 19,557 | | | 43,274 | |
| | | | | | | | | | |
| Operating income (loss) | | $ | 10,660 | | | $ | 3,842 | | | $ | (376) | | | $ | (19,557) | | | $ | (5,431) | |
Disaggregation of Revenue
The Company disaggregates its revenue from contracts with customers by type of goods or services for each of its segments, as the Company believes it best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors. Disaggregated revenues are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2024 | | Consumer Products Segment | | Ingredients Segment | | Analytical Reference Standards and Services Segment | | Total |
| (In thousands) | | | | |
| Tru Niagen®, Consumer Product | | $ | 18,123 | | | $ | — | | | $ | — | | | $ | 18,123 | |
Food-grade Niagen® | | — | | | 5,760 | | | — | | | 5,760 | |
Pharmaceutical-grade Niagen® | | — | | | 900 | | | — | | | 900 | |
| Subtotal Niagen® Related | | 18,123 | | | 6,660 | | | — | | | 24,783 | |
| Other Ingredients | | — | | | 13 | | | — | | | 13 | |
| Reference Standards | | — | | | — | | | 759 | | | 759 | |
| Consulting and Other | | — | | | — | | | 25 | | | 25 | |
| Subtotal Other Goods and Services | | — | | | 13 | | | 784 | | | 797 | |
| Total Net Sales | | $ | 18,123 | | | $ | 6,673 | | | $ | 784 | | | $ | 25,580 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2023 | | Consumer Products Segment | | Ingredients Segment | | Analytical Reference Standards and Services Segment | | Total |
| (In thousands) | | | | |
| Tru Niagen®, Consumer Product | | $ | 17,400 | | | $ | — | | | $ | — | | | $ | 17,400 | |
| Food-grade Niagen® | | — | | | 1,424 | | | — | | | 1,424 | |
| Pharmaceutical-grade Niagen® | | — | | | — | | | — | | | — | |
| Subtotal Niagen® Related | | 17,400 | | | 1,424 | | | — | | | 18,824 | |
| Other Ingredients | | — | | | — | | | — | | | — | |
| Reference Standards | | — | | | — | | | 654 | | | 654 | |
| Consulting and Other | | — | | | — | | | 17 | | | 17 | |
| Subtotal Other Goods and Services | | — | | | — | | | 671 | | | 671 | |
| Total Net Sales | | $ | 17,400 | | | $ | 1,424 | | | $ | 671 | | | $ | 19,495 | |
| | | | | | | | |
| ChromaDex Corporation and Subsidiaries | |
| Notes to the Unaudited Condensed Consolidated Financial Statements | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2024 | | Consumer Products Segment | | Ingredients Segment | | Analytical Reference Standards and Services Segment | | Total |
| (In thousands) | | | | |
| Tru Niagen®, Consumer Product | | $ | 54,121 | | | $ | — | | | $ | — | | | $ | 54,121 | |
| Food-grade Niagen® | | — | | | 12,992 | | | — | | | 12,992 | |
| Pharmaceutical-grade Niagen® | | — | | | 900 | | | | | 900 | |
| Subtotal Niagen® Related | | 54,121 | | | 13,892 | | | — | | | 68,013 | |
| Other Ingredients | | — | | | 170 | | | — | | | 170 | |
| Reference Standards | | — | | | — | | | 2,195 | | | 2,195 | |
| Consulting and Other | | — | | | — | | | 94 | | | 94 | |
| Subtotal Other Goods and Services | | — | | | 170 | | | 2,289 | | | 2,459 | |
| Total Net Sales | | $ | 54,121 | | | $ | 14,062 | | | $ | 2,289 | | | $ | 70,472 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Nine Months Ended September 30, 2023 | | Consumer Products Segment | | Ingredients Segment | | Analytical Reference Standards and Services Segment | | Total |
| (In thousands) | | | | |
| Tru Niagen®, Consumer Product | | $ | 51,924 | | | $ | — | | | $ | — | | | $ | 51,924 | |
| Food-grade Niagen® | | — | | | 7,822 | | | — | | | 7,822 | |
| Pharmaceutical-grade Niagen® | | — | | | — | | | — | | | — | |
| Subtotal Niagen® Related | | 51,924 | | | 7,822 | | | — | | | 59,746 | |
| Other Ingredients | | — | | | 430 | | | — | | | 430 | |
| Reference Standards | | — | | | — | | | 2,122 | | | 2,122 | |
| Consulting and Other | | — | | | — | | | 76 | | | 76 | |
| Subtotal Other Goods and Services | | — | | | 430 | | | 2,198 | | | 2,628 | |
| Total Net Sales | | $ | 51,924 | | | $ | 8,252 | | | $ | 2,198 | | | $ | 62,374 | |
Disclosure of Major Customers
Major customers are defined as customers whose sales or trade receivables individually consist of more than ten percent of total sales or total trade receivables, respectively. Percentage of net sales from major customers of the Company’s consumer products segment and ingredients segment for the periods indicated were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| Major Customers | | 2024 | | 2023 | | 2024 | | 2023 |
| A.S. Watson Group - Related Party (1) | | * | | 16.0 | % | | 12.4 | % | | 15.7 | % |
| Life Extension | | 16.8 | % | | * | | 13.3 | % | | * |
| | | | | | | | |
| | | | | | | | |
* Represents less than 10%(1) For additional information regarding the relationship between the Company and A.S. Watson Group, see Note 6, Related Party Transactions.
| | | | | | | | |
| ChromaDex Corporation and Subsidiaries | |
| Notes to the Unaudited Condensed Consolidated Financial Statements | |
The percentage of the amounts due from major customers to total trade receivables, net for the periods indicated were as follows:
| | | | | | | | | | | | | | |
| | Percentage of the Company's Total Trade Receivables |
| Major Customers | | At September 30, 2024 | | At December 31, 2023 |
| A.S. Watson Group - Related Party (1) | | 28.6 | % | | 52.7 | % |
| | | | |
| | | | |
| Amazon Marketplaces | | * | | 12.2 | % |
| Life Extension | | 33.3 | % | | 16.1 | % |
| Wells Pharma of Houston | | 12.7 | % | | * |
| | | | |
| | | | |
| | | | |
| | | | |
* Represents less than 10%
(1) For additional information regarding the relationship between the Company and A.S. Watson Group, see Note 6, Related Party Transactions.
As of September 30, 2024, concentration of the Company's outstanding trade receivables is significant, with approximately 74.6% of the total outstanding trade receivables aggregated among three customers. Whenever a significant concentration is present it poses a potential risk to the Company's financial performance and cash flows, as any adverse changes in the payment behavior or financial health of these major customers could impact the Company's cash flows and financial results.
The Company has determined that the current concentration is primarily due to the timing of purchases, and the Company does not consider the concentration of its trade receivables to be a significant risk. Nevertheless, to ensure prudence and safeguard against potential challenges arising from this concentration, the Company remains vigilant in monitoring the creditworthiness and payment behavior of these major customers. Furthermore, the Company continues to pursue new partnerships and business opportunities which helps to diversify its customer base and minimize the risk of an overreliance on any particular trade receivable. Despite the Company’s risk mitigation efforts, there is no assurance that the Company will not experience delays or defaults in payment from its customers, which could result in an increase in the Company's bad debt expense, a reduction in cash flows, and a negative impact on its financial performance.
Note 6. Related Party Transactions
Prior to August 20, 2024, A.S. Watson Group was considered a related party through common ownership by an enterprise that beneficially owned more than 10% of the common stock of the Company. On August 20, 2024, the common owner of A.S. Watson Group sold its ownership of the Company’s common stock and is no longer considered a related party of the Company as of that date. The sale of consumer products and corresponding trade receivables to related parties during the periods indicated are as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, | | | | |
| Net Sales | 2024 | | 2023 | | 2024 | | 2023 | | | | |
| A.S. Watson Group - Related Party | $2.0 | million | | $3.1 | million | | $8.7 | million | | $9.8 | million | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| |
| Trade Receivable as of | September 30, 2024 | | December 31, 2023 |
| A.S. Watson Group - Related Party | $2.0 | million | | $2.8 | million |
| | | |
| | | |
| | | |
| | | | | | | | |
| ChromaDex Corporation and Subsidiaries | |
| Notes to the Unaudited Condensed Consolidated Financial Statements | |
Note 7. Inventories
The Company's major classes of inventory and corresponding balances as of September 30, 2024 and December 31, 2023 are as follows:
| | | | | | | | | | | | | | |
| (In thousands) | | September 30, 2024 | | December 31, 2023 |
| Consumer Products - Finished Goods | | $ | 4,765 | | | $ | 5,962 | |
| Consumer Products - Work in Process | | 2,762 | | | 3,537 | |
| Bulk ingredients | | 2,498 | | | 4,478 | |
| Reference standards | | 519 | | | 548 | |
| Total Inventory | | $ | 10,544 | | | $ | 14,525 | |
Note 8. Leases
The Company accounts for its leases in accordance with ASU No. 2016-02 (Topic 842) which requires that a lessee recognize the assets and liabilities that arise from operating leases. The ASU requires lessees to recognize a liability for lease obligations, which represents the discounted obligation to make future lease payments, and a corresponding right-of-use (ROU) asset on the balance sheet. The Company leases office space facilities and a research and development laboratory under non-cancelable operating leases with varying expirations extending through fiscal year 2029. The lease agreements provide for renewal options and rent escalation over the lease term as well as require the Company to pay maintenance, insurance and property taxes. Lease expense is recognized on a straight-line basis over the term of the lease.
Operating Leases
As of September 30, 2024 and December 31, 2023, the Company had ROU assets of $1.9 million and $2.4 million, respectively, and corresponding operating lease liabilities of $2.9 million and $3.3 million, respectively. For the three and nine months ended September 30, 2024 and 2023, the components of operating lease expenses are as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| (In thousands) | 2024 | | 2023 | | 2024 | | 2023 |
| Operating leases | | | | | | | |
| Operating lease expense | $ | 218 | | | $ | 231 | | | $ | 668 | | | $ | 692 | |
| Variable lease expense (1) | 104 | | | 79 | | | 309 | | | 191 | |
| Operating lease expense | 322 | | | 310 | | | 977 | | | 883 | |
| Short-term lease rent expense | 4 | | | 4 | | | 12 | | | 12 | |
| Total expense | $ | 326 | | | $ | 314 | | | $ | 989 | | | $ | 895 | |
(1) Variable lease costs, including property taxes and insurance and common area maintenance fees, are classified in cost of services in the Company's Unaudited Condensed Consolidated Statements of Operations.
| | | | | |
| At September 30, 2024 |
| Weighted-average remaining lease term (years), operating leases | 3.0 |
| Weighted-average discount rate, operating leases | 6.6 | % |
| | | | | | | | |
| ChromaDex Corporation and Subsidiaries | |
| Notes to the Unaudited Condensed Consolidated Financial Statements | |
Future minimum lease payments under operating leases as of September 30, 2024 are as follows:
| | | | | | | | |
| Year | | (In thousands) |
2024 (Remainder) | | $ | 218 | |
| 2025 | | 1,135 | |
| 2026 | | 901 | |
| 2027 | | 491 | |
| 2028 | | 358 | |
| 2029 | | 30 | |
| | |
| Total | | 3,133 | |
| Less present value discount | | (252) | |
| Present value of total operating lease liabilities | | 2,881 | |
| Less current portion | | (1,008) | |
| Long-term obligations under operating leases | | $ | 1,873 | |
Note 9. Share-Based Compensation
Equity Plans
The Company grants awards to recipients through the 2017 Equity Incentive Plan, as amended (the “2017 Plan”), which was approved by stockholders and the Board of Directors. Pursuant to the latest amendment, the 2017 Plan provides for the issuance of shares that total no more than the sum of (i) 18,150,000 new shares, (ii) any returning shares such as forfeited, cancelled, or expired shares granted under either the 2017 Plan or the Second Amended and Restated 2007 Equity Incentive Plan and (iii) 500,000 shares pursuant to an inducement award. The number of shares available to be issued under the 2017 Plan will be reduced by (i) one share for each share that relates to an option or stock appreciation right award and (ii) 1.5 shares for each share which relates to an award other than a stock option or stock appreciation right award (a full-value award). As of September 30, 2024, there were approximately 4.6 million remaining shares available for issuance under the 2017 Plan. Options expire 10 years from the date of grant.
The Company uses the Black-Scholes option-pricing model to recognize the value of stock-based compensation expense for stock option awards that are not market based. Determining the appropriate fair-value model and calculating the fair value of stock option awards at the grant date requires judgment, including estimating stock price volatility and expected option life. The fair-value of the restricted stock unit awards at the grant date is based on the market price on the grant date. The Company develops estimates based on historical data and market information, which can change significantly over time, and adjusts for forfeitures as they occur.
General Vesting Conditions
The Company’s stock options and restricted stock unit (RSU) awards are generally subject to a one-year cliff vesting period, after which one-third of the shares vest with the remaining shares vesting ratably each month over a two-year period subject to the applicable grantee’s continued service. Beginning in the second quarter of 2022, RSU awards are generally subject to a three-year vesting period with one-third vesting per year on the anniversary of the grant date. Certain stock option awards are market or performance based and vest based on certain triggering events established by the Compensation Committee. Certain executive stock option and RSU awards provide for accelerated vesting if there is a change in control or termination without cause.
| | | | | | | | |
| ChromaDex Corporation and Subsidiaries | |
| Notes to the Unaudited Condensed Consolidated Financial Statements | |
Stock Options
The Company used the following weighted average assumptions for options granted during the nine months ended September 30, 2024:
| | | | | | | | |
| Weighted Average: | | Nine Months Ended September 30, 2024 |
| Expected term | | 6.4 years |
| Expected volatility | | 74.3 | % |
| Risk-free rate | | 4.3 | % |
| Expected dividends | | — | % |
Service Period Based Stock Options
The following table summarizes activity of service period-based stock options during the nine months ended September 30, 2024:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Weighted Average | | | |
| (In thousands except per share data and remaining contractual term) | Number of
Options | | Exercise
Price | | Remaining
Contractual
Term (Years) | | | | Aggregate
Intrinsic
Value | |
| Outstanding at December 31, 2023 | 10,581 | | | $ | 3.63 | | | 5.9 | | | | $ | 4 | | |
| Options Granted | 3,228 | | | 1.68 | | | | | | | | |
| Options Exercised | (768) | | | 2.13 | | | | | | | 368 | | * |
| Options Forfeited | (2,332) | | | 3.75 | | | | | | | | |
| Outstanding at September 30, 2024 | 10,709 | | | $ | 3.12 | | | 6.7 | | | | $ | 6,176 | | * |
| | | | | | | | | | |
| Exercisable at September 30, 2024 | 6,914 | | | $ | 3.81 | | | 5.0 | | | | $ | 1,411 | | * |
*The aggregate intrinsic values in the table above are based on the Company’s stock price of $3.65, which is the closing price of the Company’s stock on the last trading day for the period ended September 30, 2024.
Performance Based Stock Options
The Company has also granted stock option awards that are performance based and vest based on the achievement of certain criteria established from time to time by the Compensation Committee. If these performance criteria are not met, the compensation expenses are not recognized and the expenses that have been recognized will be reversed.
The following table summarizes performance based stock options activity during the nine months ended September 30, 2024:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Weighted Average | | | |
| (In thousands except per share data and remaining contractual term) | Number of
Options | | Exercise
Price | | Remaining
Contractual
Term (Years) | | | | Aggregate
Intrinsic
Value | |
| Outstanding at December 31, 2023 | 41 | | | $ | 4.34 | | | 0.1 | | | | $ | — | | |
| Options Granted | — | | | — | | | | | | | | |
| Options Exercised | — | | | — | | | | | | | $ | — | | |
| Options Forfeited | (41) | | | 4.34 | | | | | | | | |
| Outstanding at September 30, 2024 | — | | | $ | — | | | — | | | | $ | — | | |
| | | | | | | | | | |
| Exercisable at September 30, 2024 | — | | | $ | — | | | — | | | | $ | — | | |
There were no activities related to market-based stock options or restricted stock awards during the nine months ended September 30, 2024.
| | | | | | | | |
| ChromaDex Corporation and Subsidiaries | |
| Notes to the Unaudited Condensed Consolidated Financial Statements | |
Restricted Stock Units
The following table summarizes activity of RSUs during the nine months ended September 30, 2024:
| | | | | | | | | | | |
| (In thousands except per share fair value) | Number of RSUs | | Weighted Average
Fair Value |
| Unvested shares at December 31, 2023 | 589 | | | $ | 2.08 | |
| Granted | 479 | | | 1.52 | |
| Vested | (252) | | | 2.32 | |
| Forfeited | (132) | | | 1.73 | |
| Unvested shares at September 30, 2024 | 684 | | | $ | 1.66 | |
| | | |
| Expected to vest at September 30, 2024 | 684 | | | $ | 1.66 | |
Total Share-Based Compensation
Total share-based compensation expense was as follows:
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| (In thousands) | 2024 | | 2023 | | 2024 | | 2023 |
| Share-based compensation expense | | | | | | | |
| Cost of sales | $ | 73 | | | $ | 87 | | | $ | 245 | | | $ | 253 | |
| Sales and marketing | 128 | | | 180 | | | 568 | | | 879 | |
| Research and development | 144 | | | 247 | | | 580 | | | 746 | |
General and administrative (1) | 390 | | | 603 | | | 1,511 | | | 1,836 | |
| Total | $ | 735 | | | $ | 1,117 | | | $ | |