ChromaDex(CDXC) - 2019 Q2 - Quarterly Report

Financial Position - As of June 30, 2019, ChromaDex had approximately $19.8 million in cash and cash equivalents, sufficient to meet projected operating plans for at least the next twelve months[116]. - The company anticipates that its current cash and cash equivalents will be sufficient to meet projected operating plans for at least the next twelve months, but may require additional financing[156]. - The company incurred net cash used in operating activities of approximately $12.1 million for the six months ended June 30, 2019, compared to $10.5 million for the same period in 2018[157]. - Net cash provided by financing activities was approximately $9.6 million for the six months ended June 30, 2019, primarily from the sale of convertible notes[161]. - The company has incurred aggregate losses of approximately $106.0 million from inception through June 30, 2019, mainly due to operational expansion expenses[153]. Sales Performance - Net sales for the three months ending June 30, 2019, were $11.1 million, a 42% increase from $7.8 million in the same period in 2018[121]. - The consumer products segment, driven by TRU NIAGEN®, saw net sales of $8.7 million for the three months ending June 30, 2019, representing a 134% increase from $3.7 million in the same period in 2018[123]. - The ingredients segment experienced a 52% decrease in net sales, totaling $1.4 million for the three months ending June 30, 2019, down from $2.9 million in the same period in 2018[123]. - The analytical reference standards and services segment saw a 19% decrease in net sales for the three months ending June 30, 2019, totaling $970,000[123]. - The company anticipates continued growth in consumer product sales over the next twelve months[124]. - The company expects sales and gross profit for the consumer products segment to continue to grow over the next twelve months[133]. Profitability - Total net loss for the three months ending June 30, 2019, was $7.8 million, compared to a net loss of $8.1 million in the same period in 2018[121]. - Total gross profit increased to $6.3 million for the three months and $11.6 million for the six months ending June 30, 2019, reflecting a 63% and 65% increase year-over-year[133]. - The consumer products segment reported a gross profit of $5.2 million for the three months and $9.6 million for the six months ending June 30, 2019, representing a 142% and 135% increase, respectively, compared to the same periods in 2018[133]. - The cost of sales as a percentage of net sales decreased by 7% for the three months ended June 30, 2019, compared to the same period in 2018[128]. - The cost of sales for the consumer products segment was 40% of net sales for the three months ending June 30, 2019, indicating better margins due to TRU NIAGEN® sales[129]. Expenses - Sales and marketing expenses for the consumer products segment rose to $4.1 million for the three months and $8.0 million for the six months ending June 30, 2019, marking a 21% and 31% increase, respectively[138]. - Research and development expenses decreased to $1.1 million for the three months and $2.2 million for the six months ending June 30, 2019, a decline of 24% and 22% compared to the same periods in 2018[141]. - General and administrative expenses increased to $7.9 million for the three months and $16.3 million for the six months ending June 30, 2019, reflecting a 20% and 21% increase year-over-year[143]. Internal Controls - The company's disclosure controls and procedures are designed to provide reasonable assurance of effective information reporting as of June 30, 2019[166]. - No changes in internal control over financial reporting occurred during the second fiscal quarter that materially affected the company's internal controls[167]. Financing Activities - ChromaDex closed a financing transaction in May 2019, issuing convertible promissory notes totaling $10.0 million[117].