ChromaDex(CDXC) - 2023 Q1 - Quarterly Report

Financial Performance - Total net sales for the three months ended March 31, 2023, increased by $5.3 million, or 31%, compared to the same period in 2022[190] - The net loss for the three months ended March 31, 2023, was $1.9 million, compared to a net loss of $7.7 million for the same period in 2022[190] - Basic and diluted loss per common share for the three months ended March 31, 2023, was $0.03, an improvement from $0.11 in the same period in 2022[190] - Gross profit for the consumer products segment increased to $11,229,000, a 16% rise from $9,685,000 in the same period of 2022[194] - Total gross profit reached $13,518,000, reflecting a 28% increase compared to $10,532,000 in the prior year[194] Sales and Revenue - Ingredient sales for the same period grew by approximately $2.7 million, representing a 189% increase, driven by demand for the Niagen® ingredient[191] - The cost of sales as a percentage of net sales for the ingredients segment declined by 5% for the three months ended March 31, 2023, attributed to economies of scale from higher sales volumes[193] Expenses - Selling and marketing expenses for consumer products decreased by $0.3 million, or 4%, due to a strategic shift in marketing approach[196] - Total selling and marketing expenses for analytical reference standards and services segment decreased by approximately $56,000, or 40%[197] - Research and development expenses increased due to inflationary pressures, including wage inflation and higher share-based compensation[198] - General and administrative expenses decreased by 28% to $6,419,000 from $8,949,000 in the same period of 2022[199] Cash Flow and Financial Position - As of March 31, 2023, the company had cash and cash equivalents of $23.1 million, including $152,000 of restricted cash[201] - Net cash provided by operating activities was approximately $2.8 million for the three months ended March 31, 2023, compared to a net cash outflow of $7.2 million in the same period of 2022[202] - The company incurred aggregate losses of approximately $187.4 million since inception, primarily due to operational development and intellectual property protection expenses[200] - Purchase obligations related to inventory commitments totaled $15.5 million, with future minimum lease obligations of $4.7 million[201] Research and Development - The company has over 475 published human clinical studies related to NAD+ and its impact on health, indicating a strong research foundation[137] - The company has established more than 250 research partnerships through its ChromaDex External Research Program (CERP™) with leading institutions globally[185] Joint Ventures and Tax Credits - The company has a joint venture to commercialize Tru Niagen® in Mainland China, holding an 89% equity interest in the venture[156] - The company recorded an aggregate benefit of approximately $2.1 million from the Employee Retention Tax Credit for eligible quarters in 2020 and 2021[154] Future Expectations - The company expects to recognize approximately $7.0 million in share-based compensation expense for unvested options and $1.9 million for unvested restricted stock units in future periods[147]