cdcx-20240331

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 March 31, 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

☐

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

☐

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

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐

Yes

☑

As of May 6, 2024 there were 75,538,787 shares of the registrant’s common stock issued and outstanding.

ChromaDex Corporation

Quarterly Report on Form 10-Q

For the Three Months Ended March 31, 2024

Table of Contents


PART I - Financial Information (unaudited)			Pg.

Item 1. Financial Statements (unaudited):			3

Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023			3

Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and March 31, 2023			4

Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2024 and March 31, 2023			5

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and March 31, 2023			6

Notes to Condensed Consolidated Financial Statements			7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			25

Item 3. Quantitative and Qualitative Disclosures About Market Risk			32

Item 4. Controls and Procedures			32

PART II - Other Information

Item 1. Legal Proceedings			32

Item 1A. Risk Factors			34

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			53





Item 5. Other information			53

Item 6. Exhibits			54

Signatures			55

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)


	March 31, 2024		December 31, 2023
Assets
Current assets
Cash and cash equivalents, including restricted cash of $152 for both periods presented	$	27,565	$	27,325
Trade receivables, net of allowances of $87 and $68, respectively; Including receivables from Related Party of $2.7 million and $2.8 million, respectively	6,604		5,234
Inventories	12,495		14,525
Prepaid expenses and other assets	2,312		2,450
Total current assets	48,976		49,534

Leasehold improvements and equipment, net	2,000		2,137
Intangible assets, net	472		510
Right-of-use assets, net	2,226		2,400
Other long-term assets	405		383
Total assets	$	54,079	$	54,964
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable	$	7,899	$	10,232
Accrued expenses	10,465		9,493
Current maturities of operating lease obligations	850		691
Current maturities of finance lease obligations	11		11
Customer deposits	227		195
Total current liabilities	19,452		20,622
Deferred revenue	3,311		3,311
Operating lease obligations, less current maturities	2,356		2,563
Finance lease obligations, less current maturities	9		12
Total liabilities	25,128		26,508

Commitments and Contingencies (Note 10)

Stockholders' Equity
Common stock, $0.001 par value; authorized 150,000 shares; 75,153 shares and 74,981 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively	75		75
Additional paid-in capital	219,829		218,845
Accumulated deficit	(190,952)		(190,460)
Cumulative translation adjustments	(1)		(4)


Total stockholders' equity	28,951		28,456
Total liabilities and stockholders' equity	$	54,079	$	54,964

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

Table of Contents

ChromaDex Corporation and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(In thousands, except per share data)


	Three Months Ended March 31,
		2024		2023
Sales, net		$	22,153	$	22,556
Cost of sales		8,697		9,038
Gross profit		13,456		13,518

Operating expenses:
Sales and marketing		6,740		7,874
Research and development		2,095		1,193
General and administrative		5,352		6,419
Total operating expenses		14,187		15,486
Operating loss		(731)		(1,968)

Nonoperating income:

Interest income, net		239		66
Net loss		$	(492)	$	(1,902)





Basic and diluted loss per common share attributable to ChromaDex Corporation		$	(0.01)	$	(0.03)

Basic and diluted weighted average common shares outstanding		75,230		74,796

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

Table of Contents

ChromaDex Corporation and Subsidiaries

Unaudited Condensed Consolidated Statements of Stockholders' Equity

(In thousands, unless otherwise indicated)


	Three Months Ended March 31, 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


Issuance of restricted stock	147	—		—		—		—		—
Share-based compensation	25	—		984		—		—		984
Translation adjustment	—	—		—		—		3		3


Net loss	—	—		—		(492)		—		(492)
Balance, March 31, 2024	75,153	$	75	$	219,829	$	(190,952)	$	(1)	$	28,951


	Three Months Ended March 31, 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	99	—		—		—		—		—
Share-based compensation	—	—		1,273		—		—		1,273
Translation adjustment	—	—		—		—		3		3
Adjustment to retained earnings, cumulative effect of initially adopting ASC 326	—	—		—		(29)		—		(29)
Net loss	—	—		—		(1,902)		—		(1,902)
Balance, March 31, 2023	74,666	$	74	$	215,367	$	(187,424)	$	—	$	28,017

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

Table of Contents

ChromaDex Corporation and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(In thousands)


	Three Months Ended March 31,
	2024		2023

Cash Flows From Operating Activities
Net loss	$	(492)	$	(1,902)
Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation of leasehold improvements and equipment	178		228
Amortization of intangibles	38		41
Amortization of right of use assets	174		171
Share-based compensation expense	984		1,273

Allowance for credit losses	35		316
Non-cash financing costs	21		21
Changes in operating assets and liabilities:
Trade receivables	(1,405)		(1,084)
Inventories	2,030		2,769
Implementation costs for cloud computing arrangement	—		(27)
Prepaid expenses and other assets	106		616
Accounts payable	(2,333)		(728)
Accrued expenses	972		1,273

Customer deposits and other	35		(6)
Operating lease liabilities	(48)		(169)
Net cash provided by operating activities	295		2,792

Cash Flows From Investing Activities
Purchases of leasehold improvements and equipment	(41)		(91)



Net cash used in investing activities	(41)		(91)

Cash Flows From Financing Activities


Payment of debt issuance costs	(11)		—
Principal payments on finance leases	(3)		(1)
Net cash used in financing activities	(14)		(1)

Net increase in cash and cash equivalents	240		2,700
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	$	27,565	$	23,141

Supplemental Disclosures of Cash Flow Information

Cash payments for principal on operating lease liabilities	$	91	$	180

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.


Table of Contents			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 supplementation with NAD+ precursors.

ChromaDex is the innovator behind the NAD+ precursor nicotinamide riboside (NR), commercialized as the flagship ingredient Niagen®. Nicotinamide riboside and other NAD+ precursors are protected by ChromaDex’s patent and/or licensed rights portfolio. The Company delivers Niagen® as the sole active ingredient in its dietary supplement consumer product Tru Niagen®. The Company further develops and commercializes proprietary-based ingredient technologies and supplies these ingredients as raw materials to the manufacturers of food and supplement consumer products. Additionally, the Company offers 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.


Table of Contents			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 three months ended March 31, 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 first 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 three months ended March 31, 2024, the Company incurred a net loss of $0.5 million, however, during the same period the Company’s operating activities provided cash of $0.3 million. As of March 31, 2024, the Company had unrestricted cash and cash equivalents of $27.4 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.


Table of Contents			ChromaDex Corporation and Subsidiaries
			Notes to the Unaudited Condensed Consolidated Financial Statements

Note 4. Loss Per Share Applicable to Common Stockholders

The following table sets forth the computations of loss per share amounts applicable to common stockholders for the three months ended March 31, 2024 and 2023:


	Three Months Ended March 31,
(In thousands, except per share data)		2024		2023
Net loss		$	(492)	$	(1,902)

Basic and diluted loss per common share		$	(0.01)	$	(0.03)

Basic and diluted weighted average common shares outstanding (1):		75,230		74,796

Potentially dilutive securities (2):
Stock options		13,845		12,513
Restricted stock units		894		945

(1) Includes a weighted average of approximately 167,000 and 183,000 nonvested shares of restricted stock for the three months ended March 31, 2024 and 2023, respectively, which are participating securities that feature voting and dividend rights.

(2) Excluded from the computation of loss per share as their impact is antidilutive.

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 as well as to distributors;

•Ingredients segment: develops and commercializes proprietary-based ingredient technologies and supplies these ingredients as raw materials to the manufacturers of consumer products; 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.


Table of Contents			ChromaDex Corporation and Subsidiaries
			Notes to the Unaudited Condensed Consolidated Financial Statements

The following tables set forth financial information by segment:


Three Months Ended March 31, 2024	Consumer Products segment		Ingredients segment		Analytical Reference Standards and Services segment		Corporate and other		Total

(In thousands)
Net sales	$	17,351	$	4,088	$	714	$	—	$	22,153
Cost of sales	6,154		1,837		706		—		8,697
Gross profit	11,197		2,251		8		—		13,456
Operating expenses:
Sales and marketing	6,596		12		132		—		6,740
Research and development	1,695		400		—		—		2,095
General and administrative	—		—		—		5,352		5,352
Operating expenses	8,291		412		132		5,352		14,187

Operating income (loss)	$	2,906	$	1,839	$	(124)	$	(5,352)	$	(731)


Three Months Ended March 31, 2023	Consumer Products segment		Ingredients segment		Analytical Reference Standards and Services segment		Corporate and other		Total

(In thousands)
Net sales	$	17,633	$	4,124	$	799	$	—	$	22,556
Cost of sales	6,404		1,881		753		—		9,038
Gross profit	11,229		2,243		46		—		13,518
Operating expenses:
Sales and marketing	7,773		18		83		—		7,874
Research and development

SEC Form 10-Q filed by ChromaDex Corporation