ChromaDex(CDXC) - 2023 Q4 - Annual Report

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].