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Nature of Business and Liquidity
12 Months Ended
Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of Business and Liquidity

Nature of business: ChromaDex Corporation and its wholly owned subsidiaries, ChromaDex, Inc. and ChromaDex Analytics, Inc. (collectively, the “Company” or, in the first person as “we” “us” and “our”) are a natural products company that leverages its complementary business units to discover, acquire, develop and commercialize patented and proprietary ingredient technologies that address the dietary supplement, food, beverage, skin care and pharmaceutical markets. In addition to the Company’s proprietary ingredient technologies segment, the Company also has core standards and contract services segment, which focuses on natural product fine chemicals (known as “phytochemicals”) and chemistry and analytical testing services, and regulatory consulting segment. As a result of the Company’s relationships with leading universities and research institutions, the Company is able to discover and license early stage, intellectual property-backed ingredient technologies. The Company then utilizes the Company’s business segments to develop commercially viable proprietary ingredients. The Company’s proprietary ingredient portfolio is backed with clinical and scientific research, as well as extensive intellectual property protection.

 

Liquidity: The Company has incurred a loss from operations of approximately $2.2 million and a net loss of approximately $2.9 million for the year ended December 31, 2016, and net losses of approximately $2.8 million and $5.4 million for the years ended January 2, 2016 and January 3, 2015, respectively. As of December 31, 2016, the cash and cash equivalents totaled approximately $1.6 million.

 

On November 4, 2016, the Company entered into a business financing agreement with Western Alliance Bank, in order to establish a formula based revolving credit line up to $5.0 million. As of December 31, 2016, the Company failed to meet one of the covenants of the business financing agreement, which was to at least meet 50% of projections of Earnings Before Depreciation, Amortization and Share-based Compensation (“EBDAS”) and was in default under the agreement (the “Existing Default.”). On March 12, 2017, the Company entered into a modification agreement with Western Alliance under which Western Alliance waived the Existing Default. As of March 15, 2017, we have not borrowed from this revolving credit line.

 

The Company anticipates that its current cash, cash equivalents, cash to be generated from operations and the established $5.0 million revolving credit line will be sufficient to meet its projected operating plans through at least March 17, 2018. The Company may, however, seek additional capital prior to March 17, 2018, both to meet its projected operating plans after March 17, 2018 and/or to fund its longer term strategic objectives.