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Nature of Business and Liquidity
9 Months Ended
Sep. 30, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of Business and Liquidity

Nature of business: The Company is a natural products company that discovers, acquires, develops and commercializes patented and proprietary ingredient technologies that address the dietary supplement, food, beverage, skin care and pharmaceutical markets. Through the Company's ingredients segment, the Company offers many of its branded ingredients such as NIAGEN®, nicotinamide riboside, and pTeroPure®, pterostilbene.

 

With the acquisition of Healthspan Research, LLC in March 2017, the Company established a consumer product segment, which offers finished bottled dietary supplement products that contain NIAGEN®. The Company also has a core standards and contract services segment, which focuses on natural product fine chemicals (known as “phytochemicals”) and regulatory consulting services. As a result of the Company’s relationships with leading universities and research institutions, the Company discovers and licenses early stage, intellectual property-backed ingredient technologies. The Company then utilizes its business 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.

 

On September 5, 2017, the Company completed the sale of its operating assets (the "Lab Business Disposition") that were used with the Company's quality verification program testing and analytical chemistry business for food and food related products (the "Lab Business") to Covance Laboratories Inc. ("Covance"). With the Lab Business Disposition, the Company will focus on accelerating the expansion of nicotinamide riboside and its other proprietary ingredient technologies.

 

Liquidity: The Company has incurred loss from continuing operations of approximately $7.7 million and net loss of approximately $2.6 million for the nine-month period ended September 30, 2017. As of September 30, 2017, cash and cash equivalents totaled approximately $24.0 million.

 

In consideration for the sale of the Lab Business, the Company received net proceeds of approximately $6.0 million, net of transaction costs from Covance. Additional cash consideration of $0.8 million is held in escrow to satisfy any indemnification claims by Covance.

 

Subsequent to the period ended September 30, 2017, the Company entered into a securities purchase agreement under which it agreed to sell approximately $23.0 million of its common stock in a private placement, in return for which the purchaser will receive. The Company agreed to sell approximately 5.6 million shares at a per share price of $4.10. The private placement is expected to close on or about November 17, 2017, subject to the satisfaction of customary closing conditions.

 

While we anticipate that our current cash, cash equivalents, cash to be generated from operations and cash to be received from the private placement described above will be sufficient to meet our projected operating plans into 2019, we may require additional funds, either through additional equity or debt financings or collaborative agreements or from other sources. We have no commitments to obtain such additional financing, and we may not be able to obtain any such additional financing on terms favorable to us, or at all. If adequate financing is not available, the Company will further delay, postpone or terminate product and service expansion and curtail certain selling, general and administrative operations. The inability to raise additional financing may have a material adverse effect on the future performance of the Company.