Niagen Bioscience, Inc. 10-Q

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk Supplier Concentration Risk We rely on a single supplier, W.R. Grace & Co.-Conn (Grace)., for the supply of nicotinamide riboside chloride (NRC), a key raw material used in our products, and on a limited number of third-party suppliers for other raw materials. This reliance on a sole-source supplier for NRC and a limited supplier base for other inputs exposes us to risks related to supply availability, pricing, quality, and delivery. Any disruption in supply from Grace or our other key suppliers, including as a result of production issues, capacity constraints, regulatory compliance matters, or other factors, could delay or interrupt our ability to manufacture and distribute our products. In addition, our limited ability to source NRC from alternative suppliers increases our exposure to potential supply shortages or unfavorable commercial terms. Such disruptions or changes in supplier relationships could have a material adverse effect on our business, financial condition, and results of operations. Inventory and Purchase Commitment Risk We enter into purchase commitments with suppliers for raw materials, including NRC, in order to support our anticipated production and sales requirements. These commitments may require us to purchase minimum quantities and maintain certain inventory levels. As a result, we are exposed to risks associated with changes in demand, forecasting inaccuracies, and inventory management. If actual demand for our products is lower than expected or if market conditions change, we may be required to hold excess inventory or sell products at reduced margins. In addition, we may be unable to fully utilize committed raw materials, which could result in inventory write-downs or other charges. Such outcomes could have a material adverse effect on our financial condition, results of operations, and cash flows. We are exposed to market risks arising from changes in interest rates and foreign currency exchange rates. Interest Rate Risk We may be exposed to interest rate risk in connection with our revolving credit facility with Western Alliance Bank. The facility provides for borrowings of up to $10.0 million at a floating interest rate equal to the greater of (i) 6.00% per annum or (ii) the Prime Rate, plus 1.00%. As of March 31, 2026, we had no outstanding borrowings under this facility and, accordingly, had no current exposure to interest rate fluctuations. However, any future borrowings under the facility would subject us to variability in interest expense based on changes in the Prime Rate. All amounts outstanding under the facility, if any, mature on November 12, 2027. Our cash and cash equivalents are held in short-term, highly liquid investments, including money market funds. Due to the short-term nature and low risk profile of these investments, changes in interest rates are not expected to have a material impact on the fair value of our portfolio, results of operations, or cash flows. We do not have material interest-bearing debt with fixed rates that would expose us to significant interest rate risk. Foreign Currency Risk We are exposed to foreign currency risk to a limited extent through the operations of certain foreign subsidiaries and sales denominated in currencies other than the U.S. dollar, including sales through international e-commerce platforms. However, the majority of our revenues and expenses are denominated in U.S. dollars. As a result, fluctuations in foreign currency exchange rates have not had, and are not expected to have, a material impact on our financial position, results of operations, or cash flows. We do not currently engage in hedging or other derivative transactions to manage foreign currency risk. 31 Table of Contents