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Item 1. Business

2023-03-08 compared with 2022-03-14 · 152 added, 200 removed, 176 unchanged (67% of the section changed)

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ChromaDex is a global bioscience company dedicated to healthy aging.

Our team, which includes world-renowned scientists, is pioneering research pertaining to nicotinamide adenine dinucleotide (NAD+) which is found in every cell of human bodies and levels of which decline with age.

NAD+ is an essential coenzyme, a key regulator of cellular metabolism and is required for mitochondria to function efficiently.

Best known for its role in cellular energy production, NAD+ is now thought to play an important role in healthy aging.

Many cellular functions related to health and healthy aging are sensitive to levels of locally available NAD+ and this represents an active area of research in the field of NAD+.

NAD+ levels are not constant, and in humans, NAD+ levels have been shown to decline by more than 50% from young adulthood to middle age.

There are other factors linked to NAD+ depletion, including poor diet, excess alcohol consumption and a number of disease states.

NAD+ levels may also be increased, including through calorie restriction, moderate exercise and supplementation with NAD+ precursors, such as nicotinamide riboside (NR).

Healthy aging, mitochondrial health and NAD+ continue to be areas of focus in the research community.

To date, there are over 450 published human clinical studies related to NAD+ and its impact on health.

Areas of study include understanding NAD+’s role in Alzheimer’s disease, Parkinson’s disease, neuropathy, sarcopenia, liver disease and heart failure.

Our team, which includes world-renowned scientists, is pioneering research on nicotinamide adenine dinucleotide (NAD+), an essential coenzyme that is a key regulator of cellular metabolism and is found in every cell of the human body.

NAD+ levels in humans have been shown to decline by more than 50% from young adulthood to middle age.

In addition to age, other factors linked to NAD+ depletion include poor diet, excess alcohol consumption and a number of disease states.

NAD+ levels may be increased through supplementation with NAD+ precursors, such as nicotinamide riboside (NR), calorie restriction and moderate exercise.

In 2013, we commercialized Niagen®, a proprietary form of NR, a novel form of vitamin B3.

Data from numerous preclinical studies, and confirmed in human clinical trials, show that NR is a highly efficient NAD+ precursor that significantly raises blood and tissue NAD+ levels.

NIAGEN® is safe for human consumption.

NIAGEN® has twice been successfully reviewed under the United States (U.S.) Food and Drug Administration’s (FDA) new dietary ingredient (NDI) notification program, it has been successfully notified to the FDA as generally recognized as safe (GRAS), and has been approved by Health Canada, the European Commission and the Therapeutic Goods Administration of Australia.

Clinical studies of NIAGEN® have demonstrated a variety of outcomes including increased NAD+ levels, altered body composition, increased cellular metabolism and increased cellular energy production.

Data from numerous preclinical studies and human clinical trials show that NR is a highly efficient NAD+ precursor that significantly raises NAD+ levels in blood and tissue.

Niagen® is confirmed safe for human consumption as a dietary supplement and food ingredient.

Niagen® has twice been successfully reviewed under the U.S.

Food and Drug Administration’s (FDA) new dietary ingredient (NDI) notification program, it has been successfully notified to the FDA as generally recognized as safe (GRAS), and has been approved by Health Canada, the European Commission, the Turkish Ministry of Agriculture and the Therapeutic Goods Administration (TGA) of Australia.

Niagen® has also been approved for inclusion in medical foods by both the Brazilian Health Regulatory Agency (ANVISA) and the Food Standards Australia New Zealand (FSANZ).

Clinical studies of Niagen® have demonstrated a variety of outcomes including increased NAD+ levels, altered body composition, increased cellular metabolism and increased energy production.

Niagen® is protected by patents to which we are the owner or have exclusive rights.

ChromaDex is among the world leaders in the emerging NAD+ space.

We have amassed more than 245 research partnerships with leading universities and research institutions around the world including the National Institutes of Health, Cornell, Dartmouth, Harvard, Massachusetts Institute of Technology, University of Cambridge and the Mayo Clinic.

Additional relationships are currently being developed.

While best known for its role in cellular energy production, NAD+ is also thought to play an important role in healthy aging.

Many cellular functions related to health and healthy aging are sensitive to levels of locally available NAD+ and this represents an active area of research in the field of NAD+.

To date, there are over 475 published human clinical studies related to NAD+ and its impact on health.

These areas of study include understanding NAD+’s role in Alzheimer’s disease, Parkinson’s disease, neuropathy, sarcopenia, liver disease and heart failure.

We are among the world leaders in the emerging NAD+ space.

Through our ChromaDex External Research Program (CERP™), we have amassed more than 250 research partnerships with leading universities and research institutions around the world including the National Institutes of Health, Cornell, Dartmouth, Harvard, Massachusetts Institute of Technology, University of Cambridge, the Mayo Clinic, Chiba University and Sun Yat-sen University.

The results of the 250+ research agreements have allowed CERP™ to help produce the trusted science behind Niagen® and continue to advance the understanding of NAD+ in health, diseases, and aging.

We value and encourage strong scientific rigor behind our products and seek to continually develop additional relationships in pursuit of this.

CERP™ is a vital component of our research and development platform along with our scientific advisory board.

Our scientific advisory board supports the technical and intellectual property needs of investigators, presents research at conferences, and helps build and support the NAD+ and healthy aging research community.

Our scientific advisory board is led by Chairman Dr.

Roger Kornberg, Nobel Laureate Stanford Professor, Dr.

Charles Brenner, one of the world’s recognized experts in NAD+ and discoverer of NR as a NAD+ precursor and chair of the Department of Diabetes & Cancer Metabolism at the City of Hope National Medical Center, Dr.

Charles Brenner, one of the world’s recognized experts in NAD+ and discoverer of NR as a NAD+ precursor, Dr.

Rudy Tanzi, the co-chair of the department of neurology at Harvard Medical School, Sir John Walker, Nobel Laureate and Emeritus Director, MRC Mitochondrial Biology Unit in the University of Cambridge, England, Dr.

Bruce German, Chairman of food, nutrition and health at the University of California, Davis, Dr.

Brunie Felding, Associate Professor, Department of Molecular Medicine at Scripps Research Institute, California Campus, and Dr.

David Katz, the Founder and former director of Yale University’s Yale-Griffin Prevention Research Center;

President and Founder of the non-profit True Health Initiative;

and Founder and Chief Executive Officer of Diet ID, Inc.

STRATEGIC SHIFT TO GLOBAL CONSUMER PRODUCT COMPANY

In 2017, ChromaDex made the strategic decision to commercialize TRU NIAGEN® as a consumer brand for the product containing NIAGEN® ingredient.

This marked our strategic shift from an ingredient testing company to a global bioscience company dedicated to healthy aging.

We began the international expansion of our TRU NIAGEN® brand with the launch in Hong Kong and Macau with our strategic partner, A.S.

Watson Group, in 2017, followed by the launch in Singapore in 2018.

In 2018, we also launched TRU NIAGEN® in New Zealand with retail partner Matakana Superfoods as well as in Canada by making it available at www.truniagen.ca and to healthcare practitioners at Fullscript Canada after receiving regulatory approval for sale as a natural health product from Health Canada.

In 2019, we received approval from the Australian Therapeutic Goods Association (TGA) for use in listed complementary medicines.

With TGA approval we extended our partnership with our New Zealand partner, Matakana Superfoods, to also include Australia.

In 2020, we received approval of NR as a novel food ingredient for use in food supplements from the European Commission, which followed a positive opinion from the European Food Safety Authority in 2019.

We are currently selling on Amazon in Canada, Japan, the United Kingdom, Germany, France, Italy, Spain, Poland, Netherlands and Sweden and selling cross-border in China on Tmall, JD.com and Wechat.

Additionally, in June 2021, we began distributing Tru Niagen® in 3,800+ U.S.

Walmart stores.

We continue to focus on expanding marketing and distribution of our TRU NIAGEN® brand in new strategic international markets, domestic channels, and secure regulatory approvals needed to accomplish the same.

INGREDIENTS AND ANALYTICAL REFERENCE STANDARDS AND SERVICES BUSINESS SEGMENTS

Through our ingredients business segment, we will continue to sell NIAGEN® in ingredient form to our strategic partners, including Nestec Ltd.

(Nestlé), a global leader pioneering quality science-based nutritional health solutions.

In 2018, we entered into a supply agreement with Nestlé, pursuant to which Nestlé is our exclusive customer for NIAGEN® for human use in the (i) medical nutritional and (ii) functional food and beverage categories in certain territories.

As consideration for the rights granted to Nestlé, we received an upfront fee of $4.0 million.

In 2020, we received an additional one-time fee of $1.0 million, following the launch of the products in the United States.

We are a leading provider of research and quality-control products and services to the natural products and life science industries.

Through our analytical reference standards and services segment, customers worldwide in the dietary supplement, food and beverage, cosmetic, pharmaceutical, and life science industries use our products, which are small quantities of highly-characterized, research-grade, plant-based materials, to ensure the quality of their raw materials and finished products.

We have conducted this analytical reference standards and services business since 1999.

For the years ended December 31, 2021 and 2020, our net sales were approximately $67.4 million and $59.3 million, respectively.

The following table summarizes total net sales for each of our business segments in the last two years.

Please refer to Item 8 Financial Statements and Supplementary Data of this Form 10-K for additional financial information about each of our business segments.

Year Ended December 31,

(In thousands) 2021 2020

Brunie Felding, Associate Professor, Department of Molecular Medicine at Scripps Research Institute, California Campus, Dr.

David Katz, the Founder and former director of Yale University’s Yale-Griffin Prevention Research Center, President and Founder of the non-profit True Health Initiative, and Founder and Chief Executive Officer of Diet ID, Inc.

Vilhelm (Will) Bohr, M.D., Ph.D., D.Sc., former Chief of the Laboratory of Molecular Genetics at the National Institute on Aging of the National Institutes of Health.

Business Model, Products and Services

Consumer Products Segment

Through our consumer products segment, we provide finished dietary supplement products that contain the Company's proprietary ingredients, commercialized as Tru Niagen®, directly to consumers and distributors.

As one of the world leaders in the emerging NAD+ space and the science of healthy aging, we continuously strive to evolve our Tru Niagen® products through the exploration, discovery and enhancement of patented technologies.

The Tru Niagen® brand is built on a dedication to scientific evidence and improving consumer health by safely raising NAD+ levels to help consumers age better.

Our principal objective is to increase awareness of the Tru Niagen® brand worldwide including through expanded access to consumers by entering new markets, retail platforms and other opportunities.

We remain focused on expanding marketing and distribution of the Tru Niagen® brand in new strategic international markets and securing the regulatory approvals necessary to accomplish the same.

We began international expansion of the Tru Niagen® brand with the launch in Hong Kong and Macau with our strategic partner, A.S.

Watson Group, in 2017.

Since then, we have further expanded into Singapore, New Zealand, Canada, Australia, China, Korea, Japan, the United Kingdom and other European markets.

We support our international operations in various capacities which include supplying our international strategic partners with finished products manufactured in the U.S, as well as marketing materials and know-how.

Simultaneously, we continue to support our proprietary e-commerce platforms and the e-commerce platforms of strategic regional and local partners within the U.S while further exploring opportunities for new domestic channels.

Ingredients Segment

Through our ingredients segment, we provide Niagen® in ingredient form to our strategic partners, including Nestec Ltd.

(Nestlé), a global leader in pioneering quality science-based nutritional health solutions.

We also offer Immulina®, a spirulina extract with predominant active compounds of Braun-type lipoproteins which are useful for supporting human immune function.

Our mission is to continue to identify, acquire and commercialize other innovative proprietary ingredients and technologies.

Our experienced team is capable of advancing products through early development into commercialization with the required regulatory approval, safety, toxicology and clinical trials as well as providing supply chain management and manufacturing needs to ultimately sell the ingredient products directly or license to third parties.

Analytical Reference Standards and Services Segment

Total net sales $ 67,449 $ 59,257

Since 1999, we have provided research and quality-control products and services through our analytical reference standards and services segment and have positioned ourselves as a leader in the industry.

Customers worldwide in the dietary supplement, food and beverage, cosmetic, pharmaceutical, and life sciences industries utilize our products, which are small quantities of highly-characterized, phytochemicals, natural products and plant-based materials, to ensure the quality of their raw materials and finished products.

We also provide research services for customers exploring the frontier of natural product research and development.

We have taken advantage of both supply chain needs and regulatory requirements to build our analytical reference standards and services segment.

We believe we create value throughout the supply chain of the dietary supplements, functional foods, life science research, personal care markets and associated analytical testing laboratories.

We intend to capitalize on additional opportunities in product development and commercialization of various kinds of intellectual property that we have largely discovered and acquired through the sales process associated with this segment.

Business Market

According to the data from Global Wellness Institute, the global wellness industry market was approximately $4.4 trillion in 2020 amidst the disruptions of COVID-19, which is down from $4.9 trillion in 2019.

According to data from Global Wellness Institute, the global wellness industry market was approximately $4.4 trillion in 2020 amidst the disruptions of COVID-19, which is down from $4.9 trillion in 2019.

In 2020, the personal care, beauty and anti-aging market was approximately $960 billion, healthy eating, nutrition and weight loss was approximately $950 billion and traditional and complementary medicine market was approximately $410 billion.

The Global Wellness Institute projects the overall wellness economy to grow approximately 10% annually, or 60% in total, from 2020 to 2025, with most segments projected to exceed GDP growth.

According to the data from Grand View Research, the global dietary supplements market size was estimated at $140 billion in 2020, and is expected to grow at a compound annual growth rate of 8.6% to about $271 billion by 2028.

Business Model

According to data from Grand View Research, the global dietary supplements market size was estimated at $164 billion in 2022, and is expected to grow at a compound annual growth rate of 8.9% from 2022 to 2030.

For the years ended December 31, 2022 and 2021, our net sales were approximately $72.1 million and $67.4 million, respectively.

The following table summarizes total net sales for each of our business segments in the last two years.

Please refer to Item 8 Financial Statements and Supplementary Data of this Form 10-K for additional financial information about each of our business segments.

Year Ended December 31,

(In thousands) 2022 2021

Consumer Products Segment $ 60,110 $ 56,705

Our principal objective is to sell and increase awareness of TRU NIAGEN® to consumers worldwide.

As one of the world leaders in the emerging NAD+ space and the science of healthy aging, we continuously strive to evolve our TRU NIAGEN® products with the aim of potentially improving consumers health by safely raising NAD+ levels.

Further, we seek to continue exploration, discovery and enhancement of patented technologies.

The TRU NIAGEN® brand is built on scientific evidence, trust and the direct impact to our consumers of aging better.

We intend to expand to the worldwide NAD+-related healthy aging market by entering into new international markets.

We maintain our focus of obtaining additional regulatory approvals required to expand marketing and distribution efforts of our TRU NIAGEN® products in new international markets.

We will utilize our proprietary e-commerce platforms, and the e-commerce and brick and mortar platforms of strategic regional and local partners.

based business will continue to support our global operations through the following:

• Corporate development and strategy

• Research and development activities

• Global premium brand management and brand guidelines

• Multi-platform global marketing campaigns and know-how

• Propriety e-commerce platform and data analytics

• Global manufacturing and supply chain operations management

We expect to continue to supply our international operations with finished products manufactured in the U.S, and to continue to provide all our marketing materials and know-how to our international strategic partners.

Ingredients Segment 8,736 7,407

We intend to continue to sell NIAGEN® in ingredient form to our strategic partners.

In addition, we expect to continue to identify, acquire and commercialize other innovative new proprietary ingredients and technologies.

We have an experienced team that is capable of advancing products through development into commercialization with the required regulatory approval, safety, toxicology, clinical trials, supply chain management, manufacturing, and ultimately either directly selling the products or licensing to third parties.

Analytical Reference Standards and Services Segment 3,204 3,337

We have taken advantage of both supply chain needs and regulatory requirements to build our analytical reference standards and services segment.

We believe we create value throughout the supply chain of the dietary supplements, functional foods, life science research, personal care markets and associated analytical testing laboratories.

Products and Services Overview

Current products and services provided are as follows:

CONSUMER PRODUCTS

• TRU NIAGEN® branded dietary supplements.

We currently offer our NIAGEN® NR through our TRU NIAGEN® finished bottles and TRU NIAGEN® Stickpacks.

We will continue to build TRU NIAGEN® as a global brand and offer TRU NIAGEN® to consumers worldwide.

• Nicotinamide riboside NIAGEN® .

We intend to continue to develop and sell NIAGEN® in ingredient form to strategic partners.

• Spirulina Extract Immulina ® .

IMMULINA® is a spirulina extract and the predominant active compounds are Braun-type lipoproteins which are useful for supporting human immune function.

These lipoproteins are present at much greater levels than those found within commonly used immune enhancing botanicals such as Echinacea and ginseng.

ANALYTICAL REFERENCE STANDARDS AND SERVICES

• Supply of reference standards and fine chemicals.

We supply a wide range of products necessary to conduct quality control of raw materials and consumer products.

Reference standards are used for research and quality control in the dietary supplements, cosmetics, food and beverages, life science, and pharmaceutical industries.

In addition, we provide research services for customers exploring the frontier of natural product research and development.

We assist by providing unique and well-characterized natural products, in the format of botanical libraries or as requested on custom “Scope of Work” requests.

Total net sales $ 72,050 $ 67,449

Major Customers

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Watson Group, a related party, accounted for approximately 13.9% and 13.8% of our net sales for the years ended December 31, 2022 and 2021, respectively.

Generally, we do not depend upon a single customer, or a few customers, and the loss of any one or more would not have a material adverse effect on the Company.

However, due to the volume of consumer products and ingredients we are selling in relation to the overall Company’s sales, we do expect that at times one or more of our customers may account for more than 10% of the Company’s sales.

Impact of COVID-19

The worldwide outbreak of COVID-19 continues to drive global uncertainty and disruption, which has created headwinds for our business.

Authorities have imposed, and businesses and individuals have implemented, numerous measures to try to contain the virus or treat its impact, such as travel bans and restrictions, quarantines, shelter-in-place/stay-at-home and social distancing orders, store closures and reduced operating hours, and vaccine requirements.

These measures have impacted and may further impact our workforce and operations and those of our respective suppliers and partners.

In particular, we have experienced, and could in the future experience, global supply chain delays including challenges with transportation, logistics and production lead-times, as well as labor shortages and cost inflation.

In the first quarter of 2021, we experienced delays due to global components and packaging shortages for our consumer products across our supply chain.

These challenges were addressed in the second quarter and we have otherwise not encountered any major disruptions in our supply chain.

It is our intention to maintain adequate safety stocks to support our growth and we currently believe we have adequate inventory on hand to meet current demands.

We will continue to monitor the situation closely as conditions may become more challenging due to ongoing and uncertain economic factors.

Additionally, our sales to partners in international markets have been impacted by the effects of COVID-19.

Our primary focus throughout the COVID-19 pandemic has remained ensuring the health and safety of our employees through office closures or implementing enhanced safety protocols to ensure the well-being of our employees.

We have adapted to the new environment and been able to successfully conduct business virtually.

The degree to which COVID-19 impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including the duration and severity of the pandemic;

surges related to new variants;

the actions taken to contain the virus or treat its impact;

other actions taken by governments, businesses, and individuals in response to the virus and resulting economic disruption;

and how quickly and to what extent normal economic and operating conditions can resume.

Additional impacts and risks may arise that we are not aware of or able to respond to effectively.

We are similarly unable to predict the extent of the impact of the pandemic on our customers, suppliers, and other partners, but a material effect on these parties could also materially adversely affect us.

The impact of COVID-19 can also exacerbate other risks discussed in this Risk Factors section and throughout this report.

The loss of or deterioration in relationship with this customer would have a material adverse effect on our business and financial condition.

Sales and Marketing Strategy

For our consumer products segment, we employ a variety of strategies to drive sales and consumer awareness of TRU NIAGEN®, including social media and internet advertising, managing affiliate marketing, influencers, paid spokespersons and talent, events and trade shows, e-mail, paid search, distribution of research publications and press releases.

We also have a customer care department that handles day-to-day communications with our end customers addressing any needs or concerns related to our TRU NIAGEN® product.

For our ingredients segment and analytical reference standards and services segment, our strategy is based on a direct, technically-oriented model.

We recruit and hire sales and marketing staff with appropriate commercial and scientific backgrounds.

Consumer Products Segment

We employ a variety of strategies to drive sales and consumer awareness of Tru Niagen®, including social media and internet advertising, managing affiliate marketing, influencer campaigns and marketing, paid spokespersons and talent, events and trade shows, e-mail marketing campaigns, paid search advertising and distribution of research publications and press releases.

We also have a dedicated customer care department that handles day-to-day communications with our end customers addressing any needs or concerns related to our Tru Niagen® products.

United States of America:

For our consumer products segment, we distribute our TRU NIAGEN® products direct to consumers through our propriety e-commerce platform TRUNIAGEN.com, Amazon, Walmart.com and other established internet marketplaces.

In June 2021, we began distributing Tru Niagen® in 3,800+ Walmart stores across the U.S.

We also have specialty retailers and direct healthcare practitioners who are authorized resellers of TRU NIAGEN® in the United States.

For our ingredients segment and analytical reference standards and services segment, we use a direct marketing approach in the United States.

to promote our products and services.

We distribute Tru Niagen® products direct to consumers through our propriety e-commerce platform TruNiagen.com, Amazon, ShopHQ and other established internet marketplaces.

We also partner with specialty retailers and direct healthcare practitioners who are authorized resellers of Tru Niagen® in the United States.

International:

For our consumer products segment, we utilize strategic partners on a regional or local country basis to expand our distribution of TRU NIAGEN® products.

Our strategic partnerships include brick and mortar, e-commerce channels or a combination of both.

We utilize strategic partners on a regional or local country basis to expand our distribution of Tru Niagen® products internationally.

Our strategic partners offer our products through brick and mortar stores, e-commerce channels or a combination of both.

With our strategic partners, we currently distribute Tru Niagen® products to the following international markets:

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• New Zealand (Matakana Superfoods);

• Canada (Amazon, Fullscript Canada and www.truniagen.ca);

• Australia (Matakana Superfoods);

• China (Tmall, JD.com and Wechat);

• China (Sinopharm);

• Korea (Juvenis, Coupang);

• Canada (CLM Health Group, Amazon, Fullscript Canada and www.TruNiagen.ca);

• Japan (Amazon);

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• Sweden (Amazon).

We continue to focus on obtaining additional regulatory approvals required to expand marketing and distribution of our TRU NIAGEN® brand in new strategic international markets.

For our ingredients segment, currently our customers are primarily based in the United States and Europe.

For our analytical reference standards and services segment outside of the United States, we use international distributors to market and sell to several foreign countries or markets.

Sales and marketing expense for the years ended December 31, 2021 and 2020, were approximately $28.4 million and $20.9 million, respectively.

We continue to focus on obtaining additional regulatory approvals required to expand marketing and distribution of the Tru Niagen® brand in new strategic international markets.

Currently, we are in the process of obtaining applicable regulatory approvals, including “Blue Hat” or health food registration with the Peoples Republic of China State Administration for Market Regulation for Tru Niagen® and other products containing nicotinamide riboside in our name or our designee (collectively, the “Blue Hat Registration”) in connection with our joint venture agreement with Taikuk Group Ltd.

Achieving Blue Hat Registration would notably broaden our sales opportunities in China and is at the forefront of our expansion goals.

As of December 31, 2022, it is uncertain when Blue Hat Registration will be achieved.

For additional discussion surrounding our joint venture agreement and Blue Hat Registration see Note 12, Joint Venture , in Item 8 Financial Statements and Supplementary Data of this Form 10-K.

Ingredients Segment & Analytical and Reference Standards Segments

Our ingredients segment is supported through the development of key partnerships since we do not currently offer our ingredients to the broader public.

Sales to our partners are predominantly based in the United States, Hong Kong and Europe.

Our partners sell multi-ingredient products featuring Niagen® in the U.S.

and other international markets.

For our analytical reference standards and services segment, we promote our products and services based on a direct, technically-oriented model.

We recruit and hire sales and marketing staff with appropriate commercial and scientific backgrounds.

Our analytical reference standards and services segment provides products and services to customers both within the United States and internationally.

We offer unique and highly-characterized, phytochemicals, natural products and plant-based materials as well as tailored research services as requested through custom “Scope of Work” applications.

For our international operations, we partner with international distributors to market and sell to several foreign countries and markets.

Total sales and marketing expense for the years ended December 31, 2022 and 2021 was approximately $28.3 million and $28.4 million, respectively.

Research and Development

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We value and encourage strong scientific rigor behind our products and have cultivated relationships with academic institutions in pursuit of this.

Thus far, CERP has achieved over 245 research partnership agreements with leading universities and research institutions around the world including the National Institutes of Health, Cornell, Dartmouth, Harvard, Massachusetts Institute of Technology, University of Cambridge and the Mayo Clinic.

Thus far, CERP™ has achieved over 250 research partnership agreements with leading universities and research institutions around the world including the National Institutes of Health, Cornell, Dartmouth, Harvard, Massachusetts Institute of Technology, University of Cambridge, the Mayo Clinic, Chiba University and Sun Yat-sen University.

Additional relationships are currently being developed.

To date, over 200 peer-reviewed studies have been published on the science behind NR, including its NAD+ boosting properties.

To date, over 300 peer-reviewed studies have been published on the science behind NR, including its NAD+ boosting properties, and there are over 475 published human clinical studies on NAD+ and its impact on health.

CERP™ has produced more than 40% of all peer-reviewed NR-focused publications and 75% of the peer-reviewed clinical NR publications so far.

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Niagen® was also successfully notified to FDA as Generally Recognized as Safe in August 2016.

Through our research and development laboratory in Longmont, Colorado, we intend to develop and evaluate products that we plan to take to market as well as explore cost saving processes for existing products.

Research and development costs for the years ended December 31, 2021 and 2020, were approximately $3.8 million and $3.4 million, respectively.

Through our research and development laboratory in Longmont, Colorado, we venture to discover, develop and evaluate new products that we aim to take to market and explore cost saving processes for existing products.

Research and development expense for the years ended December 31, 2022 and 2021 was approximately $4.8 million and $3.8 million, respectively.

Competitive Business Conditions

The health and wellness, anti-aging and dietary supplement industries are highly competitive, and we have competitors that offer products similar to our products.

Many of our competitors may have significantly greater financial and human resources than our own.

We seek to differentiate our products and marketing from our competitors by emphasizing product quality, product benefits, scientific rigor, and functional ingredients.

Patent and trademark applications that protect brands, product names, and new technologies are pursued whenever possible.

While we cannot assure that such measures will block competitive products, we believe our continued emphasis on innovation and new product development targeted at the needs of our consumers will enable us to effectively compete in the marketplace by building a trusted brand.

For our consumer products segment, we are in direct competition with Elysium Health who offers a similar product to Tru Niagen® as well as other providers of NAD+ boosting supplements.

Additionally, we have customers who are authorized resellers of Niagen® as a consumer product.

We believe these resellers are focused on specific channels that we feel are complementary to our business and expand awareness of the Niagen® ingredient and benefits.

We also face strong indirect competition from other ingredient suppliers who may supply alternative ingredients that may have similar characteristics to ingredients we offer.

For our analytical reference standards and services segment, we face competition within the standardization and quality testing niche of the markets we serve.

These competitors have already developed reference standards or services or are currently taking steps to develop them.

We strive to always provide superior products and services to our competition.

Working Capital

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We measure working capital by adding trade receivables and inventories and subtracting accounts payable.

Our working capital is primarily comprised of assets and liabilities related to our consumer products segment and ingredients segment as the operations require a large amount of inventory on hand.

As the consumer products segment and ingredients segment grow, more working capital will likely be needed to support the operations.

Our working capital is primarily comprised of assets and liabilities from our consumer products segment and ingredients segment as these operations require a considerable amount of inventory on hand.

As each of these segments grow, greater working capital will likely be required to support these operations.

Government Regulation

Some of our operations are subject to regulation by various U.S.

federal agencies and similar state and international agencies, including, but not limited to, the FDA, the Federal Trade Commission (FTC), the Department of Commerce, the Department of Transportation and the Department of Agriculture.

federal agencies and similar state and international agencies, including, but not limited to, the FDA, the Federal Trade Commission (FTC), the Consumer Product Safety Commission, the Department of Commerce, the Department of Transportation and the Department of Agriculture.

These regulators govern a wide variety of production activities, from design and development to labeling, manufacturing, handling, selling and distributing of products.

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The FDCA has been amended several times with respect to dietary supplements, most notably by the Dietary Supplement Health and Education Act of 1994 (DSHEA).

DSHEA established a new framework for governing the composition and labeling of dietary supplements.

Generally, under DSHEA, dietary ingredients that were marketed in the U.S.

before October 15, 1994, may be used in dietary supplements without notifying the FDA.

However, an NDI (a dietary ingredient that was not marketed in the U.S.

before October 15, 1994) is subject to an NDI notification that must be submitted to the FDA unless the ingredient has previously been “present in the food supply as an article used for food” without being “chemically altered.” An NDI notification must provide the FDA with evidence of a “history of use or other evidence of safety” establishing that the use of the dietary ingredient “will reasonably be expected to be safe.” An NDI notification must be submitted to the FDA at least 75 days before the initial marketing of the NDI.

There can be no assurance that the FDA will accept the evidence of safety for any NDIs that we may want to commercialize, and the FDA’s objection to such evidence could render products containing such dietary ingredients to be adulterated.

The FDA is in the process of finalizing guidance for the industry that will aim to clarify the agency’s interpretation of the NDI notification requirements, and this guidance may raise new and significant regulatory barriers for NDIs.

For any new ingredient developed by us to be used in conventional food or beverage products in the U.S., the product either must be approved by the FDA as a food additive pursuant to a food additive petition or be generally recognized as safe (GRAS).

The FDA does not have to approve a company’s determination that an ingredient is GRAS.

However, a company can voluntarily notify the FDA of its own self-determination.

There can be no assurance that the FDA will approve any food additive petition for any ingredient that we may want to commercialize, or agree with our determination that an ingredient is GRAS, either of which could impact the marketing of such ingredient.

DSHEA generally provides a regulatory framework to help ensure safe, quality dietary supplements and the dissemination of accurate information about such products.

In particular, one aspect of the framework established by DSHEA provides that so-called “third-party literature”, for example a reprint of a peer-reviewed scientific publication linking a particular nutritional ingredient with health benefits, may be used in connection with the sale of a nutritional supplement to consumers without the literature being subject to regulation as labeling.

Such literature must not be false or misleading;

the literature may not promote a particular manufacturer or brand of nutritional supplement;

the literature must present a balanced view of the available scientific information on the nutritional supplement;

if displayed in an establishment, the literature must be physically separate from the nutritional supplement;

and the literature may not have appended to it any information by sticker or any other method.

If the literature fails to satisfy each of these requirements, we may be prevented from disseminating it with our products, and any dissemination could subject our products to regulatory action as an illegal drug.

Moreover, any written or verbal representation by us that would associate a nutrient in a product that we sell with an effect on a disease will be deemed evidence of intent to sell the product as an unapproved new drug, a violation of the FDCA.

We are committed to meeting or exceeding all relevant FDA regulations under the FDCA.

Advertising Regulations

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The National Advertising Division of the Council of Better Business Bureaus uses a form of alternative dispute resolution, working closely with in-house counsel, marketing executives, research and development departments and outside consultants to decide whether claims have been substantiated.

We are not aware of, or party to, any action by the National Advertising Division of the Council of Better Business Bureaus involving our products.

International Regulations

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Other countries, such as Switzerland, have voluntarily adopted laws and regulations that mirror those of the European Union with respect to novel foods or new dietary ingredients.

Regulation in other major and established markets, including Canada, Japan, Brazil and Australia all maintain and enforce a clear regulatory framework for novel ingredients and dietary supplements (or their equivalent).

Competitive Business Conditions

For our consumer products segment, we are in direct competition with Elysium Health who offers a similar product to TRU NIAGEN® and other providers of NAD+ boosting supplements.

There are also a few resellers of NIAGEN® as consumer products that are our customers.

We believe these resellers are focused on specific channels that we feel are complementary to our business.

We also face strong indirect competition from other ingredient suppliers who may supply alternative ingredients that may have similar characteristics to ingredients we offer.

Below is a list of some of the competitors for our ingredients segment.

Ingredients Business Segment Indirect Competitors

• Royal DSM (the Netherlands)

• Glanbia plc (Ireland)

• BASF (Germany)

• Lonza Group Ltd (Switzerland)

• Sabinsa Corporation (India/U.S.)

For the analytical reference standards and services segment, we face competition within the standardization and quality testing niche of the markets we serve.

Below is a current list of certain competitors.

These competitors have already developed reference standards or services or are currently taking steps to develop them.

Of the competitors listed, some currently sell fine chemicals, which, by default, are sometimes used as reference standards, and others are closely aligned with our market niche to reduce any barriers to entry if these companies wish to compete.

Analytical Reference Standards and Services Segment Competitors

• MilliporeSigma (U.S.)

• LGC Standards Ltd.

• US Pharmacopoeia (U.S.)

• Extrasynthese (France)

Regulation in other major and established markets, including Canada, Japan, Brazil, China, Turkey and Australia all maintain and enforce a clear regulatory framework for novel ingredients and dietary supplements (or their equivalent).

Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts, Including Duration

We currently protect our intellectual property through patents, trademarks, designs and copyrights on our products and services.

Our business strategy is to use the intellectual property harnessed from our analytical reference standards and services segment as the basis for providing new proprietary ingredients to our customers.

Our strategy is to develop these proprietary ingredients on our own as well as to license our intellectual property to companies who will commercialize it.

We have used and, to a limited extent, continue to use intellectual property harnessed from our analytical reference standards and services segment to create new proprietary ingredients to our customers.

We aim to develop these proprietary ingredients ourselves and grant licenses to external companies for their commercialization.

The following table sets forth our existing patents and those to which we have licensed rights:

Patent Number Title Filling Date Issued Date Expires Licensor

7,205,284 Potent immunostimulants from microalgae 7/10/2001 4/17/2007 3/9/2022 Licensed from University of Mississippi

7,776,326 Methods and compositions for treating neuropathies 6/3/2005 8/17/2010 6/24/2026 Licensed from Washington University

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Co-owned with The Queen’s University of Belfast and exclusively licensed by ChromaDex

Manufacturing

We currently utilize third-party manufacturers to produce NR, encapsulate and bottle NR sold as a dietary supplement and produce and supply other ingredients, products, and services.

Following the receipt of products or product components from third-party manufacturers, we inspect and ensure conformance of each product and product component to our specifications.

We will also consider manufacturing certain products or product components internally, if our capacity permits, when demand or quality requirements make it appropriate to do so.

We work with manufacturing companies that can meet the standards imposed by the FDA, the International Organization for Standardization and the quality standards that we require for our own internal policies and procedures.

We monitor and manage supplier performance through a corrective action program developed by us.

11,274,117 Efficient and scalable syntheses of nicotinoyl ribosides and reduced nicotinoyl ribosides, modified derivatives thereof, phosphorylated analogs thereof, adenylyl dinucleotide conjugates thereof, and novel crystalline forms thereof 4/30/2021 3/15/2022 11/10/2037 Co-owned with The Queen’s University of Belfast and exclusively licensed by ChromaDex

11,345,720 Efficient and scalable syntheses of nicotinoyl ribosides and reduced nicotinoyl ribosides, modified derivatives thereof, phosphorylated analogs thereof, adenylyl dinucleotide conjugates thereof, and novel crystalline forms thereof 12/15/2021 5/31/2022 11/10/2037 Co-owned with The Queen’s University of Belfast and exclusively licensed by ChromaDex

11,524,022 Use of nicotinamide riboside, nicotinic acid riboside, and nicotinamide mononucleotide, reduced nicotinyl compounds, and nicotinoyl compound derivatives in infant formula for healthy development 4/14/2017 12/13/2022 4/14/2037 Owned by ChromaDex

11,571,413 Nicotinamide riboside treatments of domesticated meat animals 6/26/2020 2/7/2023 9/27/2039 Licensed from Kansas State University

11,584,770 Methods of preparing nicotinamide riboside and derivatives thereof 5/4/2022 2/21/2023 7/24/2034 Licensed from Queen’s University Belfast

Manufacturing, Sources and Availability of Raw Materials

Our finished products are manufactured by third-party FDA-regulated contract manufacturers in the United States with some raw materials sourced internationally.

Each contract manufacturer upholds the standards imposed by the International Organization for Standardization as well as the high quality standards we require.

We utilize third-party manufacturers to produce NR, encapsulate and bottle NR sold as a dietary supplement and produce and supply other ingredients, products, and services.

In most cases, our contract manufacturers purchase raw materials based on our specifications;

however, we may also license particular raw material ingredients and supply our own source to the manufacturer.

Following the receipt of products or product components from third-party manufacturers, in addition to in-house testing performed by the contract manufacturer, we perform independent analysis and testing to ensure conformance to our strict specifications.

We continuously monitor and manage supplier performance through a corrective action program developed by us.

We believe these manufacturing relationships can minimize our capital investment, help control costs, and allow us to compete with larger volume manufacturers of dietary supplements, phytochemicals and ingredients.

(Grace) is the Company’s exclusive manufacturer for the supply of NR.

Effective as of August 2, 2021, we entered into a Seventh Amendment (Seventh Amendment) to the Manufacturing and Supply Agreement (such agreement as amended, the “Grace Manufacturing Agreement”), originally effective in January 2016 with Grace.

In January 2019, Grace was issued patents related to the manufacturing of the crystalline form of NR.

Pursuant to the Seventh Amendment, the Grace Manufacturing Agreement expires on June 30, 2023, subject to its further renewal to be negotiated by the parties.

Sources and Availability of Raw Materials

For all three business segments, and subject to the risks related to our Company and our business recited below, we believe that we have identified reliable sources and suppliers of ingredients, chemicals, phytochemicals and reference materials that will provide products in compliance with our guidelines.

From time to time, if our capacity permits and when demand or quality requirements make it appropriate to do so, we manufacture certain products or product components internally.

(Grace) is our exclusive manufacturer for the supply of NR.

Effective as of December 14, 2022, we entered into an Eighth Amendment (Eighth Amendment) to the Manufacturing and Supply Agreement (such agreement as amended, the “Grace Manufacturing Agreement”), originally effective in January 2016 with Grace.

Beginning January 2019, Grace was issued patents related to the manufacturing of the crystalline form of NR.

Pursuant to the Eighth Amendment, we are committed to purchase approximately $18.0 million of total inventory during fiscal year 2023, which is our only future purchase commitment with Grace.

The Grace Manufacturing Agreement will expire on December 31, 2023, subject to further renewal of the agreement to be negotiated by the parties.

We believe that we have identified reliable sources and suppliers of ingredients, chemicals, phytochemicals and reference materials that will provide products in compliance with our guidelines.

Environmental Compliance

We incur significant expense in complying with Good Manufacturing Practices and safe handling and disposal of materials used in our research and manufacturing activities.

We incur various expenses in complying with Good Manufacturing Practices and safe handling and disposal of materials used in our research and manufacturing activities.

For the years ended December 31, 2022 and 2021, these expenses totaled approximately $2.1 million and $1.7 million, respectively.

We do not anticipate incurring additional material expense to comply with federal, state and local environmental laws and regulations.

We do not anticipate incurring significant additional expense in our compliance with federal, state and local environmental laws and regulations.

Backlog Orders

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As of December 31, 2022 we did not have any significant backlog orders from the distributors that have not been shipped.

For products that are directly shipped to consumers, we have minimal backlog orders as we carry inventory on hand to ship upon the receipt of order.

For our ingredients segment, we also have minimal backlog orders as we carry inventory on hand for most of the products we offer and we ship upon the receipt of customer’s order.

For products that are directly shipped to consumers, we have minimal backlog orders as we carry sufficient inventory on hand to ship upon the receipt of order.

For our ingredients segment, we also have minimal backlog orders as we carry sufficient inventory on hand for most of the products we offer and we ship upon the receipt of customer’s order.

For our analytical reference standards and services segment, we normally have a small backlog of orders.

These orders amount to approximately $20,000 or less.

Because we list over 3,000 phytochemicals and 300 botanical reference materials in our catalog, we may not always have the items in stock at the time of customers’ orders.

These backlog orders are normally fulfilled within two to four weeks.

As we list over 1,750 phytochemicals and 400 botanical reference materials in our catalog, we may not always have the items in stock at the time of customers’ orders.

These backlog orders are normally fulfilled within two to six weeks.

Culture and Workforce

We’re a company of curious, talented, and passionate people who are devoted to health, well-being, and improving the way people age.

We are a company of curious, talented, and passionate people who are devoted to health, well-being, and improving the way people age.

We embrace collaboration and creativity and encourage the iteration of ideas to address complex challenges in all aspects of our business.

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We support healthy, open dialogue and we communicate information about the company through multiple internal channels to our employees .

As of December 31, 2021, ChromaDex had 115 full-time employees.

As of December 31, 2022, ChromaDex had 113 full-time employees, none of whom are unionized.

We believe relations with our employees are good.

For information on our facilities, see “Properties” in Item 2 of this Form 10-K.

Available Information

Our website address is www.chromadex.com .

Information found on, or accessible through, our website is not a part of, and is not incorporated into, this Annual Report on Form 10-K.

We make available, free of charge, on our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practical after we file such material with, or furnish it to, the SEC.

This information is also available in print to any stockholder who requests it, with any such requests addressed to ChromaDex Corporation, 10900 Wilshire Blvd.

Ste 600, Los Angeles, CA 90024.

Certain of these documents may also be obtained by calling the SEC at 1-800-SEC-0330.

The SEC also maintains a website that contains reports, and other information regarding issuers that file electronically with the SEC at www.sec.gov .

We are subject to the reporting requirements under the Securities Exchange Act of 1934, as amended (the Exchange Act).

Consequently, we are required to file reports and information with the Securities and Exchange Commission (SEC), including reports on the following forms:

annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act.

These reports, proxy and information statements and other information concerning our company may be accessed through the SEC's website at www.sec.gov .

You may also find on our website at www.chromadex.com , electronic copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act.

Such filings are placed on our website as soon as reasonably practicable after they are filed with the SEC.

All such filings are available free of charge.

We also make available, free of charge, on our website our Code of Business Conduct and Ethics, and the Charters of our Audit Committee, Nominating and Corporate Governance Committee, and Compensation Committee of our Board of Directors.

Information found on, or accessible through, our website is not a part of, and is not incorporated into, this Annual Report on Form 10-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business