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Business Segments
 9 Months Ended
Sep. 30, 2023
Segment Reporting [Abstract]  
Business Segments 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.

The following tables set forth financial information by segment:
Three months ended September 30, 2023Consumer Products segmentIngredients segmentAnalytical Reference Standards and Services segmentCorporate and otherTotal
(In thousands)
Net sales$17,400 $1,424 $671 $— $19,495 
Cost of sales6,024 739 763 — 7,526 
Gross profit (loss) 11,376 685 (92)— 11,969 
Operating expenses:
Sales and marketing5,934 — 101 — 6,035 
Research and development1,142 99 — — 1,241 
General and administrative— — — 5,840 5,840 
Operating expenses7,076 99 101 5,840 13,116 
Operating income (loss)$4,300 $586 $(193)$(5,840)$(1,147)
Nine Months Ended September 30, 2023Consumer Products segmentIngredients segmentAnalytical Reference Standards and Services segmentCorporate and otherTotal
(In thousands)
Net sales$51,924 $8,252 $2,198 $— $62,374 
Cost of sales18,387 3,852 2,292 — 24,531 
Gross profit (loss)33,537 4,400 (94)— 37,843 
Operating expenses:
Sales and marketing19,599 37 282 — 19,918 
Research and development3,278 521 — — 3,799 
General and administrative— — — 19,557 19,557 
Operating expenses22,877 558 282 19,557 43,274 
Operating income (loss)$10,660 $3,842 $(376)$(19,557)$(5,431)
Three months ended September 30, 2022Consumer Products segmentIngredients segmentAnalytical Reference Standards and Services segmentCorporate and otherTotal
(In thousands)
Net sales$14,561 $1,819 $683 $— $17,063 
Cost of sales5,224 899 733 — 6,856 
Gross profit (loss)9,337 920 (50)— 10,207 
Operating expenses:
Sales and marketing5,696 12 160 — 5,868 
Research and development1,089 135 — — 1,224 
General and administrative— — — 6,180 6,180 
Operating expenses6,785 147 160 6,180 13,272 
Operating income (loss)$2,552 $773 $(210)$(6,180)$(3,065)

Nine Months Ended September 30, 2022Consumer Products segmentIngredients segmentAnalytical Reference Standards and Services segmentCorporate and otherTotal
(In thousands)
Net sales$44,018 $4,710 $2,326 $— $51,054 
Cost of sales15,694 2,302 2,277 — 20,273 
Gross profit28,324 2,408 49 — 30,781 
Operating expenses:
Sales and marketing21,634 36 456 — 22,126 
Research and development3,204 343 — — 3,547 
General and administrative— — — 22,292 22,292 
Operating expenses24,838 379 456 22,292 47,965 
Operating income (loss)$3,486 $2,029 $(407)$(22,292)$(17,184)
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:
Three Months Ended September 30, 2023Consumer Products SegmentIngredients SegmentAnalytical Reference Standards and Services SegmentTotal
(In thousands)
Tru Niagen®, Consumer Product$17,400 $— $— $17,400 
Niagen® Ingredient
— 1,424 — 1,424 
Subtotal Niagen® Related17,400 1,424 — 18,824 
Other Ingredients— — — — 
Reference Standards— — 654 654 
Consulting and Other— — 17 17 
Subtotal Other Goods and Services— — 671 671 
Total Net Sales$17,400 $1,424 $671 $19,495 
Nine Months Ended September 30, 2023Consumer Products SegmentIngredients SegmentAnalytical Reference Standards and Services SegmentTotal
(In thousands)
Tru Niagen®, Consumer Product$51,924 $— $— $51,924 
Niagen® Ingredient
— 7,822 — 7,822 
Subtotal Niagen® Related51,924 7,822 — 59,746 
Other Ingredients— 430 — 430 
Reference Standards— — 2,122 2,122 
Consulting and Other— — 76 76 
Subtotal Other Goods and Services— 430 2,198 2,628 
Total Net Sales$51,924 $8,252 $2,198 $62,374 

Three Months Ended September 30, 2022Consumer Products SegmentIngredients SegmentAnalytical Reference Standards and Services SegmentTotal
(In thousands)
Tru Niagen®, Consumer Product$14,561 $— $— $14,561 
Niagen® Ingredient
— 1,804 — 1,804 
Subtotal Niagen® Related14,561 1,804 — 16,365 
Other Ingredients— 15 — 15 
Reference Standards— — 661 661 
Consulting and Other— — 22 22 
Subtotal Other Goods and Services— 15 683 698 
Total Net Sales$14,561 $1,819 $683 $17,063 

Nine Months Ended September 30, 2022Consumer Products SegmentIngredients SegmentAnalytical Reference Standards and Services SegmentTotal
(In thousands)
Tru Niagen®, Consumer Product$44,018 $— $— $44,018 
Niagen® Ingredient
— 4,389 — 4,389 
Subtotal Niagen® Related44,018 4,389 — 48,407 
Other Ingredients— 321 — 321 
Reference Standards— — 2,248 2,248 
Consulting and Other— — 78 78 
Subtotal Other Goods and Services— 321 2,326 2,647 
Total Net Sales$44,018 $4,710 $2,326 $51,054 
Disclosure of Major Customers
Major customers are defined as customers whose sales or trade receivables individually consist of more than ten percent of total sales or total trade receivables, respectively. Percentage of net sales from major customers of the Company’s consumer products segment and ingredients segment for the periods indicated were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
Major Customers2023202220232022
A.S. Watson Group - Related Party16.0 %15.4 %15.7 %12.0 %


The percentage of the amounts due from major customers to total trade receivables, net for the periods indicated were as follows:
Major CustomersAt September 30, 2023At December 31, 2022
A.S. Watson Group - Related Party52.0 %36.6 %
Nestlé (NHSc)*23.6 %
Amazon Marketplaces20.2 %*
Life Extension12.9 %*
* Represents less than 10%

During the three and nine months ended September 30, 2023, the Company recorded provision for doubtful trade receivables of approximately $0.2 million and $0.9 million, respectively. Primarily, the higher provision was a result of the Chapter 11 bankruptcy filing by iMedia Brands, Inc., which owns ShopHQ, a multiplatform interactive television network, which has been a sales channel for Tru Niagen®.

As of September 30, 2023, concentration for the Company's outstanding trade receivables is significant, with approximately 85% of the total outstanding trade receivables aggregated among three customers. Whenever a significant concentration is present it poses a potential risk to the Company's financial performance and cash flows, as any adverse changes in the payment behavior or financial health of these major customers could impact the Company's cash flows and financial results.

The Company has determined that the current concentration is primarily due to the timing of purchases, and the Company does not consider the concentration of its trade receivables to be a significant risk. Nevertheless, to ensure prudence and safeguard against potential challenges arising from this concentration, the Company remains vigilant in monitoring the creditworthiness and payment behavior of these major customers. Furthermore, the Company continues to pursue new partnerships and business opportunities which helps to diversify its customer base and minimize the risk of an overreliance on any particular trade receivable. Despite the Company’s risk mitigation efforts, there is no assurance that the Company will not experience delays or defaults in payment from its customers, which could result in an increase in the Company's bad debt expense, a reduction in cash flows, and a negative impact on its financial performance.