Financial Performance - Net sales for the three months ended June 30, 2024, increased by 12% to $22.7 million compared to $20.3 million in the same period in 2023[117][118] - Net loss for the three months ended June 30, 2024, improved to $15,000 from a net loss of $2.2 million in the same period in 2023[117] - Total cost of sales for the three months ended June 30, 2024, was $9.0 million, representing 40% of net sales, consistent with the same period in 2023[121] - Total gross profit increased by 11% to $13.69 million for the three months ended June 30, 2024, and by 5% to $27.15 million for the six months ended June 30, 2024[124] - Net cash provided by operating activities was $31,000 for the six months ended June 30, 2024, a significant decrease from $6.1 million in the same period in 2023[135] - Cash used in investing activities was $53,000 for the six months ended June 30, 2024, compared to $96,000 in the same period in 2023[136] - Cash provided by financing activities was $0.6 million for the six months ended June 30, 2024, driven by proceeds from the exercise of stock options[137] Segment Performance - Consumer Products segment sales grew by 10% to $18.6 million for the three months ended June 30, 2024, driven by higher sales to distributor partners and e-commerce[118] - Ingredients segment sales increased by 22% to $3.3 million for the three months ended June 30, 2024, primarily due to timing of sales and increased demand for Niagen®[118][119] - Analytical Reference Standards and Services segment sales remained stable at $791,000 for the three months ended June 30, 2024, with a slight 9% increase compared to the same period in 2023[118] - Gross profit for the consumer products segment increased by 9% to $11.86 million for the three months ended June 30, 2024, and by 4% to $23.06 million for the six months ended June 30, 2024[124] - Cost of sales as a percentage of net sales remained relatively stable for the three and six months ended June 30, 2024, compared to the same periods in 2023, with the analytical reference standards and services segment showing a 1,600 basis points improvement[123] Expenses and Costs - Sales and marketing expenses for the consumer products segment improved by 300 basis points for the six months ended June 30, 2024, compared to the same period in 2023[125] - R&D expenses increased by 33% to $3.41 million for the six months ended June 30, 2024, driven by strategic initiatives including Niagen+ development[127] - General and administrative expenses decreased by 22% to $5.66 million for the three months ended June 30, 2024, and by 20% to $11.02 million for the six months ended June 30, 2024[128] Cash and Liquidity - Cash and cash equivalents as of June 30, 2024, totaled $27.9 million, with $27.7 million being unrestricted, sufficient to meet financial obligations for the next twelve months[114] - The company anticipates seeking additional capital within the next twelve months to fund projected operating plans and long-term strategic objectives[114] - The company had cash and cash equivalents of $27.9 million as of June 30, 2024, with no outstanding borrowings under its line of credit[134] Research and Development - The company has over 275 research partnerships through its ChromaDex External Research Program (CERP®), advancing the understanding of NAD+ in health and aging[111] - Niagen+ product line, launched in 2024, has not yet had a material impact on the company's results of operations[108] Internal Controls and Legal Proceedings - The company's disclosure controls and procedures were evaluated and found effective at the reasonable assurance level as of June 30, 2024[140] - No changes in internal control over financial reporting occurred during the company's second fiscal quarter that materially affected or are likely to materially affect the internal control[141] - Legal proceedings are described in Note 10, Commitments and Contingencies, Legal Proceedings in the Notes to the Unaudited Condensed Consolidated Financial Statements[142]

Core Insights - ChromaDex Corporation is transitioning into the pharmaceutical sector with its Nicotinamide Riboside Chloride (NRC) candidate for treating Ataxia Telangiectasia (AT), a rare pediatric disease [9][10] - The FDA has granted Orphan Drug Designation (ODD) and Rare Pediatric Disease (RPD) status to NRC, which provides various regulatory advantages and potential market exclusivity [9][11] - The company has reported strong financial performance, including a revenue of $83.2 million over the last 12 months and a positive adjusted EBITDA for four consecutive quarters [23][22] Company Overview - ChromaDex is focused on developing nicotinamide riboside (NR) through its product TRU Niagen, which aims to enhance cellular NAD+ levels linked to aging and metabolism [2][4] - The company holds over 80 patents related to Niagen and has more than 250 research collaborations to maximize its potential [21] Recent Performance - ChromaDex finished Q1 with approximately $27.4 million in cash and short-term investments, with a quarterly cash burn of about $1.73 million since Q3 of 2021, indicating nearly four years of cash runway [8] - The company achieved a gross margin of 60.8% and reduced operating expenses by $1.3 million, resulting in a net loss of only $500,000 [23] Pharmaceutical Aspirations - ChromaDex is preparing to file an Investigational New Drug (IND) application to initiate human clinical trials for NRC [9] - The launch of Niagen+, an IV formulation of NRC, is expected to provide rapid therapeutic effects and precise dosing for patients with AT [9][10] Market Potential - The AT market is projected to grow from $585.4 million in 2023 to $1.27 billion by 2034, with North America holding approximately 33.71% of the market share [11] - ChromaDex's entry into the AT market could provide significant revenue opportunities and validate its product, despite the market not being massive [11] Clinical Data and Future Prospects - Clinical studies indicate that NRC supplementation may improve neuromotor coordination and provide neuroprotective effects in AT patients [10] - The company is exploring additional clinical prospects for NRC in other rare diseases, which could further enhance its market position [12] Risks and Challenges - Transitioning to a clinical-stage company introduces new risks, including the high costs and uncertainties associated with clinical trials [15] - Competition in the pharmaceutical industry is intense, and ChromaDex may face challenges in defending its intellectual property [29]

ChromaDex's (CDXC) shares jumped 11.9% on Jun 7 after the company announced that the FDA has granted the Orphan Drug Designation (ODD) and Rare Pediatric Disease (RPD) Designation to its investigational candidate, nicotinamide riboside chloride (NRC), to treat ataxia telangiectasia (AT). The company is currently gearing up to file an investigational new drug (IND) application for NRC with the FDA to treat AT. Subject to IND clearance, ChromaDex will begin evaluating the candidate in human clinical studies. ...

Financial Data and Key Metrics - Q1 2024 revenue was $22 2 million, a 2% decline compared to Q1 2023, primarily driven by a 17% reduction in combined Watsons and other B2B sales [19] - Gross margins increased by 80 basis points to 60 7% compared to 59 9% in Q1 2023, driven by shifts in business mix with e-commerce sales constituting 58% of total net sales [20] - Adjusted EBITDA was positive at $0 7 million, marking the fourth consecutive quarter of positive adjusted EBITDA [13] - Net loss attributable to common stockholders for Q1 2024 was $0 5 million or a loss of $0 01 per share, compared to a net loss of $1 9 million and a loss of $0 03 per share in Q1 2023 [21] - The company ended Q1 with $27 6 million in cash and no debt [22] Business Line Data and Key Metrics - E-commerce sales grew 5% year-over-year in Q1 2024, continuing to be the largest and most reliable revenue source [14] - Tru Niagen sales declined 2% year-over-year, while Niagen ingredient sales grew moderately by $0 2 million, offset by a decline in sales of other ingredients [19] - The company is focusing on building a robust base of subscribers and optimizing influencer marketing, retention strategies, and social media presence [15] Market Data and Key Metrics - The company announced partnerships with Sprouts Farmers Market and Vitamin Shoppe, expanding Tru Niagen's availability to over 400 Sprouts locations and 700 Vitamin Shoppe locations [15] - Retail margins are lower than e-commerce margins, but pricing will be comparable [5] - The company expects a strong second half of 2024, with revenue ramping up due to new product launches and partnerships [23] Company Strategy and Industry Competition - The company is investing heavily in R&D, with Q1 R&D expenses increasing by $0 9 million year-over-year, primarily for new verticals and NAD precursor development [21] - ChromaDex positions itself as the gold standard in the NAD industry, with over 30 peer-reviewed human studies and 100 published scientific studies [16] - The company is exploring new verticals beyond dietary supplements, including skincare and pet supplements, with potential launches in the US [17] Management Commentary on Operating Environment and Future Outlook - Management reiterated full-year revenue growth guidance of at least 16%, driven by new verticals, partnerships, and product launches [1] - The company expects heavier investments in the first half of 2024, particularly in R&D, with moderation in the second half [23] - Management is optimistic about the momentum built in Q1 and new revenue opportunities expected later in 2024 [23] Other Important Information - The company is involved in ongoing litigation with Elysium, with a potential liability disclosed in the 10-Q report, though no significant impact is expected on 2024 financials [22] - ChromaDex is working on expanding cross-border sales of Tru Niagen into China, with potential partnerships and product expansions [28] Q&A Session Summary Question: Revenue Growth and New Product Launches - Management confirmed that new product revenue will ramp up in the second half of 2024, with no significant acceleration expected in Q2 [1][3] Question: Retail Partnerships and Margins - Retail margins are lower than e-commerce margins, but pricing will be comparable [5] - The company is focusing on specialty retailers like Vitamin Shoppe and Sprouts, which align well with the Tru Niagen customer base and require less advertising investment [4] Question: R&D Expenses and New Vertical Development - R&D expenses increased by $0 9 million year-over-year, primarily for new verticals and NAD precursor development, with similar heavy investments expected in Q2 [6] Question: Gross Margin Evolution and E-commerce Contribution - Gross margins are trending between 60% and 61%, with higher margins in quarters with a higher e-commerce mix [33] - E-commerce margins are in the low 70s, while B2B margins are in the low to mid-50s [33] Question: Higher Dosage Forms of Tru Niagen - The 1,000 milligram SKU has been successful, with demand from both existing and new customers, and is expected to be revenue accretive [34][60] Question: Legal Spending and Litigation Impact - The potential liability from the Elysium litigation is not expected to significantly impact 2024 legal spending [41] Question: Retention Rates for 1,000 Milligram SKU - Early indications suggest higher retention rates for the 1,000 milligram SKU compared to other SKUs, though it is still early in the product lifecycle [66] Question: Vitamin Shoppe and Sprouts Distribution - Tru Niagen will be available in 700 Vitamin Shoppe stores and over 400 Sprouts locations, with revenue recognized in Q1 2024 [68]

ChromaDex Corporation Reports First Quarter 2024 Financial Results Total net sales of $22.2 million, gross margin of 60.7%, a net loss of $0.5 million and a positive Adjusted EBITDA of $0.7 million for the three months ended March 31, 2024. Reiterated full year outlook including net sales growth of at least 16%. LOS ANGELES, CA - May 8, 2024 - ChromaDex Corp. (NASDAQ:CDXC) today announced financial results for the first quarter of 2024. First Quarter 2024 Financial and Recent Operational Highlights • Total ...

Notes to the Unaudited Condensed Consolidated Financial Statements 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: | --- | --- | --- | --- | --- | --- | --- | |------------------------------------------------------------- ...

Financial Data and Key Metrics Changes - For the full year 2023, total net sales reached $83.6 million, representing a 16% year-over-year increase [40] - Gross margins improved to 60.8%, with selling and marketing expenses down approximately 770 basis points as a percentage of net sales [40] - Positive operating cash flow of $7.1 million was achieved, compared to a cash use of $15.1 million in the prior year [49][63] Business Line Data and Key Metrics Changes - In Q4 2023, total net sales were $21.2 million, with a 9% increase in Tru Niagen sales driven by a 20% growth in e-commerce [45][81] - Niagen ingredient net sales were down 30% year-over-year, largely due to the absence of a $2 million upfront minimum purchase from Nestle Health Science in the prior year [46] - Gross margins for Q4 improved by 380 basis points to 61%, attributed to a shift in business and customer mix [47] Market Data and Key Metrics Changes - E-commerce sales for Q4 were up 20% year-over-year, indicating strong performance in this channel [81] - The company continues to cultivate partnerships, including with Nestle Health Science and Zesty Paws, to expand its market presence [65][82] Company Strategy and Development Direction - The company is focused on expanding its product portfolio and entering new market verticals, with expectations for new product launches in 2024 [8][42] - Investments in R&D are expected to increase year-over-year as the company prepares for new innovations and market entries [11][12] - The company aims to maintain financial discipline while pursuing growth opportunities, projecting revenue growth above 16% for 2024 [7][63] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the financial outlook for 2024, anticipating stronger top and bottom-line performance [13] - The first half of 2024 is expected to involve heavier investments in R&D, with revenue ramping in the second half [13] - Management acknowledged challenges in the market but remains optimistic about ongoing initiatives and partnerships [16] Other Important Information - The company recorded its highest quarterly revenue in Q1 2023 but does not expect Q1 2024 to be the highest of the year [14] - The company is actively pursuing litigation related to patent infringement and expects to collect on owed amounts [37][38] Q&A Session Summary Question: Can you provide insights on Tru Niagen Pro and its margin profile? - Management noted that Tru Niagen Pro sold out quickly, with many new customers, and margins are similar to existing products, though slightly lower as they encourage trade-ups [19][22] Question: What are the expectations for marketing efficiency in 2024? - Management indicated that marketing efficiency is expected to improve, with stable selling and marketing expenses as a percentage of net sales [29][97] Question: Will the new product launch impact margins? - Management stated that while R&D and marketing expenses will increase in Q1 2024, they do not expect a meaningful impact on overall margins for the year [69][102]

| --- | |-------------------------------------| | | | Net income (loss), as reported | | Adjustments | | Interest (income) expense | | Depreciation | | Amortization of intangibles | | Amortization of right of use assets | | Share-based compensation | | | | Severance and restructuring | 2021 – 2023 Net Sales Summary 2. Q4 2023 Net Sales Q4 2023 Net Sales ($ in millions) Other Ingredients $17.6 YoY % (vs Q4 2022) +20% | --- | --- | |-------|-------| | | (14)% | | | | | | | | | (30)% | | | (19)% | +16% Total + ...

Financial Performance - For the year ended December 31, 2023, the company incurred a net loss of approximately $4.9 million, with aggregate losses from inception through December 31, 2023, totaling $190.5 million[294]. - Net cash provided by operating activities was approximately $7.1 million for the year ended December 31, 2023, compared to a net cash use of $15.1 million for the year ended December 31, 2022, reflecting a positive change of $22.2 million[295]. - In 2023, ChromaDex Corporation reported net sales of approximately $83.6 million, a 16% increase from $72.1 million in 2022[322]. - The Consumer Products Segment generated $69.5 million in sales for 2023, up from $60.1 million in 2022, reflecting a growth of 15.9%[323]. - The Ingredients Segment saw sales rise to $11.1 million in 2023 from $8.7 million in 2022, marking a 27.5% increase[323]. - Total sales and marketing expense for the year ended December 31, 2023, was approximately $26.4 million, a decrease of 6.7% from $28.3 million in 2022[352]. Assets and Liabilities - The company's total assets as of December 31, 2023, were $54.964 million, compared to $54.057 million as of December 31, 2022[315]. - The company's additional paid-in capital increased from $214.094 million in 2022 to $218.845 million in 2023[315]. - Accrued expenses rose from $7.337 million in 2022 to $9.493 million in 2023, contributing to the overall increase in current liabilities[315]. - The company’s working capital as of December 31, 2023, was approximately $9.5 million, down from $13.5 million in 2022, indicating a reduction of 29.6%[356]. Cash Flow and Inventory Management - Trade receivables decreased from $8.482 million in 2022 to $5.234 million in 2023, indicating improved cash flow management[315]. - The company’s cash and cash equivalents increased from $20.441 million in 2022 to $27.325 million in 2023[315]. - The company maintains sufficient inventory for its ingredients segment, resulting in minimal backlog orders[384]. - As of December 31, 2023, there were no significant backlog orders from distributors for the consumer products segment, and backlog orders to consumers were minimal[372]. Research and Development - The company has established over 275 research partnerships globally, enhancing its position in the NAD+ research space[303]. - Research and development expenses for 2023 were approximately $5.0 million, compared to $4.8 million in 2022, indicating a slight increase in investment in innovation[335]. - Over 375 peer-reviewed studies have been published on the science behind Nicotinamide Riboside (NR), with 75% of peer-reviewed clinical NR publications produced by CERP™[353]. Market Position and Competition - ChromaDex's major customer, A.S. Watson Group, accounted for approximately 15.4% of total net sales in 2023, up from 13.9% in 2022[324]. - The company faces direct competition from Elysium Health and other NAD+ boosting supplement providers, as well as strong indirect competition from alternative ingredient suppliers[354]. - The success of ChromaDex's consumer product and ingredient business is closely tied to the growth rate of the vitamin, mineral, and dietary supplement market[378]. Regulatory and Compliance - The company is in the process of obtaining regulatory approvals for its products in international markets, including the "Blue Hat" registration in China, which would enhance sales opportunities[333]. - The company is subject to various U.S. federal regulations, including those from the FDA and FTC, which govern product safety, testing, and advertising[357]. - For the years ended December 31, 2023 and 2022, expenses related to compliance with Good Manufacturing Practices totaled approximately $2.5 million and $2.1 million, respectively[383]. - The company incurs various expenses for compliance with environmental laws, which are not expected to increase significantly in the future[383]. Employee Relations and Corporate Culture - ChromaDex had 106 full-time employees as of December 31, 2023, with no unionized employees, indicating good employee relations[386]. - The company continues to invest in recruiting, developing, and rewarding talented employees to attract and retain top candidates[374]. - ChromaDex emphasizes diversity, inclusion, and fairness within its workforce, promoting open dialogue among employees[386]. Strategic Initiatives - The company is focused on obtaining regulatory approvals for international expansion and enhancing marketing strategies for its products[306]. - ChromaDex emphasizes product quality and scientific rigor to differentiate itself in a competitive market, focusing on innovation and new product development[336]. - ChromaDex's strategic manufacturing relationships help mitigate capital investment and enable cost control against larger competitors[382].

LOS ANGELES--(BUSINESS WIRE)--ChromaDex Corp. (NASDAQ:CDXC) (“the Company”), a global bioscience company dedicated to healthy aging, announced that it will hold a conference call on Wednesday, March 6, 2024 at 4:30 p.m. ET to discuss its financial results for the fourth quarter, which ended December 31, 2023. The financial results will be reported in a press release after the close of regular stock market trading hours on the same day as the conference call. Investor Conference Call: ChromaDex managemen ...