Niagen Bioscience, Inc. 10-K

Item 1. Business Unless otherwise indicated or the context otherwise requires, references to the “Company”, “ChromaDex”, “we”, “us” and “our” refer to ChromaDex Corporation and its consolidated subsidiaries. Company Overview ChromaDex is a global bioscience company dedicated to healthy aging. The ChromaDex team, which includes world-renowned scientists, is pioneering research on nicotinamide adenine dinucleotide (“NAD+”), levels of which decline with age. NAD+ is an essential coenzyme and a key regulator of cellular metabolism. 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. NAD+ continues to decline as humans grow older. There are other causes of NAD+ depletion, such as poor diet, alcohol consumption and a number of disease states. NAD+ levels may also be increased, including through calorie restriction and moderate exercise. Healthy aging, mitochondrial health and NAD+ continue to be areas of focus in the research community. As of 2020, there were over 350 published human clinical studies related to NAD+. The areas of study include understanding NAD+’s role in Alzheimer’s disease, Parkinson’s disease, neuropathy and heart failure. In 2013, ChromaDex commercialized NIAGEN® nicotinamide riboside (“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 NAD+ levels. NIAGEN® is safe for human consumption. NIAGEN® has twice been successfully reviewed under the U.S. Food and Drug Administration’s new dietary ingredient (“NDI”) notification program, has been successfully notified to the U.S. Food and Drug Administration (the “FDA”) as generally recognized as safe (“GRAS”), and has been approved as safe 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, increased cellular metabolism and increased energy production. NIAGEN® is the trade name for our proprietary ingredient NR, and is protected by patents to which we are the exclusive licensee. ChromaDex is among the world leaders in the emerging NAD+ space. ChromaDex has amassed more than 200 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. 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 inventor of nicotinamide riboside, Dr. Rudy Tanzi, the co-chair of the department of neurology at Harvard Medical School and one of the world’s leading experts in food and nutrition, 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. 5 Table of Contents 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 and in Canada by making it available at www.truniagen.ca and to healthcare practitioners at Fullscript Canada after receiving regulatory approval for sale from Health Canada. We are currently selling cross border in China on Tmall, JD.com, Kaola.com and Wechat and on Amazon in Canada, Japan, the United Kingdom, Germany, France, Italy, Spain, Netherlands and Sweden. In 2019, we received a positive opinion from the European Food Safety Authority on NR as a novel food ingredient for use in food supplement and approval from the Australian Therapeutic Goods Association (“TGA”) for use in listed complementary medicines. With the TGA approval we extended our partnership with our New Zealand partner, Matakana Superfoods, to also include Australia. We will continue to focus on obtaining additional regulatory approvals required to expand our marketing and distribution of our TRU NIAGEN® brand in new strategic international markets. 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. Nestlé will potentially pay us multiple one-time fees for a total aggregate payment up to $6.0 million in product launch fees, following the launch of the products in certain territories. 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 fiscal years ended December 31, 2020 and December 31, 2019, our revenues were approximately $59.3 million and $46.3 million, respectively. The following table summarizes the Company’s total sales for each of the 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 for each of the business segments. Fiscal Years Consumer Products Segment Ingredients Segment Analytical Reference Standards and Services Segment Total 2020 $47.1 million $9.2 million $3.0 million $59.3 million 2019 $36.1 million $6.2 million $4.0 million $46.3 million 6 Table of Contents Company Background On May 21, 2008, Cody Resources, Inc., a Nevada corporation and a public company, (“Cody”) entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among Cody, CDI Acquisition, Inc., a California corporation and wholly-owned subsidiary of Cody (“Acquisition Sub”), and ChromaDex, Inc. (the “Merger”). Subsequent to the signing of the Merger Agreement, Cody merged with and into a Delaware corporation. On June 20, 2008, Cody amended its articles of incorporation to change its name to ChromaDex Corporation. ChromaDex Corporation was traded on the Over the Counter market under the symbol “CDXC.” On April 25, 2016, ChromaDex Corporation became listed on the NASDAQ Capital Market under the symbol “CDXC.” ChromaDex, Inc., a wholly owned subsidiary of ChromaDex Corporation, was originally formed as a California corporation on February 19, 2000. On March 12, 2017, ChromaDex Corporation acquired Healthspan Research LLC, a consumer product company offering TRU NIAGEN® branded products. This marked the strategic shift to become a global, science-based bioscience company dedicated to healthy aging. On September 5, 2017, the Company completed the sale of its operating assets that were used with the Company’s quality verification program testing and analytical chemistry business for food and food related products to Covance Laboratories Inc. On January 15, 2021, Healthspan Research LLC was dissolved. Prior to its dissolution, Healthspan Research, LLC contributed its assets and liabilities to ChromaDex, Inc. Business Market According to the data from Global Wellness Institute, the global wellness industry market was approximately $4.5 trillion in 2018. Personal care, beauty and anti-aging market was approximately $1.1 trillion, healthy eating, nutrition and weight loss was approximately $702 billion and traditional and complementary medicine market was approximately $360 billion. According to the data from Grand View Research, the global dietary supplements market size was estimated at $123 billion in 2019, and is expected to grow at a CAGR of 8.2% to about $231 billion by 2027. Business Model CONSUMER PRODUCTS SEGMENT Our business model is to sell TRU NIAGEN® to consumers worldwide. As one of the world leaders in the emerging NAD+ space and the science of aging, we will continue to seek to discover and enhance patented technology and evolve our TRU NIAGEN® products to potentially improve health by safely raising NAD+ levels. 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 will continue to focus on obtaining additional regulatory approvals required to expand our marketing and distribution of our TRU NIAGEN® products in new international markets. We will utilize our proprietary ecommerce platforms, and the ecommerce and brick and mortar platforms of strategic regional and local partners. Our United States (“U.S.”) based business will continue to support our global operations, including: Ø Corporate development and strategy Ø Research and development activities Ø Science Ø Global premium brand management and brand guidelines Ø Multi-platform global marketing campaigns and know-how Ø Build and evolve propriety ecommerce platform and data analytics Ø Global manufacturing and supply chain operations 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. 7 Table of Contents INGREDIENTS SEGMENT 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 We have taken advantage of both supply chain needs and regulatory requirements to build our analytical reference standards and services segment. We believe that we create value throughout the supply chain of the dietary supplements, functional foods, life science research, and personal care markets. 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. Overview of our Products and Services 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. We will continue to build TRU NIAGEN® as a global brand and offer TRU NIAGEN® to consumers worldwide. INGREDIENTS · 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. 8 Table of Contents 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 and fine chemicals 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” request. Impact of COVID-19 The COVID-19 pandemic continues to drive global uncertainty and disruption, which has created headwinds for our business. Our ecommerce consumer products business segment continues to perform relatively well in this challenging environment. Our consumer products retail business, including sales to A.S. Watson group and other partners in international markets, has been more impacted by the effects of COVID-19, due to store closures and reduced operating hours. To date, we have successfully navigated the business during the COVID-19 pandemic, managing our working capital effectively. We have experienced shipment delays from our suppliers; however, we have not encountered any major disruptions in our supply chain. We have been maintaining adequate safety stocks to support our growth and we currently have adequate inventory on hand to meet our current demands. Overall, we believe the supply chain disruptions due to the COVID-19 pandemic will not have a material impact to our business operations. In response to the outbreak, we prioritized the health and safety of our employees by closing our offices or enhancing safety protocols in place to ensure the well-being of our employees. We have been able to successfully conduct business virtually. 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 websites, influencers, paid spokespersons and talent, events and tradeshows, 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. USA: For our consumer products segment, we distribute our TRU NIAGEN® products direct to consumers through our propriety ecommerce platform TRUNIAGEN.com, Amazon and other established internet marketplaces. We also have specialty retailers and direct healthcare practitioners who are authorized resellers of TRU NIAGEN® in the U.S. For our ingredients segment and analytical reference standards and services segment, we intend to continue to use a direct marketing approach in the U.S. to promote our products and services. 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 and/or ecommerce channels. 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 and in Canada by making it available at www.truniagen.ca and to healthcare practitioners at Fullscript Canada after receiving regulatory approval for sale from Health Canada. We are currently selling cross border in China on Tmall, JD.com, Kaola.com and Wechat and on Amazon in Canada, Japan, the United Kingdom, Germany, France, Italy, Spain, Netherlands and Sweden. In 2019, we received a positive opinion from the European Food Safety Authority on NR as a novel food ingredient for use in food supplement and approval from the Australian Therapeutic Goods Association (“TGA”) for use in listed complementary medicines. With the TGA approval we extended our partnership with our New Zealand partner, Matakana Superfoods, to also include Australia. We will continue to focus on obtaining additional regulatory approvals required to expand our marketing and distribution of our TRU NIAGEN® brand in new strategic international markets. For our ingredients segment, most of our customers are based currently in the U.S. and Europe. For our analytical reference standards and services segment outside of the U.S., we use international distributors to market and sell to several foreign countries or markets. 9 Table of Contents Government Regulation Some of our operations are subject to regulation by various United States federal agencies and similar state and international agencies, including the Food and Drug Administration (“FDA”), the Federal Trade Commission (“FTC”), the Department of Commerce, the Department of Transportation, the Department of Agriculture and other state and international agencies. These regulators govern a wide variety of production activities, from design and development to labeling, manufacturing, handling, selling and distributing of products. From time to time, federal, state and international legislation is enacted that may have the effect of materially increasing the cost of doing business or limiting or expanding our permissible activities. We cannot predict whether or when potential legislation or regulations will be enacted, and, if enacted, the effect of such legislation, regulation, implementation, or any implemented regulations or supervisory policies would have on our financial condition or results of operations. In addition, the outcome of any litigation, investigations or enforcement actions initiated by state or federal authorities could result in changes to our operations being necessary and in increased compliance costs. U.S. FDA Regulation In the United States dietary supplements and food are subject to FDA regulations. For example, the FDA’s final rule on Good Manufacturing Practices (“GMPs”) for dietary supplements published in June 2007 requires companies to evaluate products for identity, strength, purity and composition. Other regulations, for new dietary ingredients (“NDI”), require a pre-market notification that must be submitted to the FDA along with evidence of safety. In addition, depending on the type of product, whether a dietary supplement, cosmetic, food, or pharmaceutical, the FDA, under the Food, Drug and Cosmetic Act (the “FDCA”), can regulate: · product testing; · ingredient testing; · documentation process, batch records, specifications; · product labeling; · product manufacturing and storage; · product claims, advertising and promotion; · product sales and distribution; and · Product post-market surveillance 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 United States 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 United States before October 15, 1994) is subject to 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 developing 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. 10 Table of Contents For any new ingredient developed by us to be used in conventional food or beverage products in the United States, the product either must be approved by the FDA as a food additive pursuant to a food additive petition (“FAP”) 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 FAP 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. U.S. Advertising Regulations In addition to FDA regulations, the FTC regulates the advertising of dietary supplements, foods, cosmetics, and over-the-counter (“OTC”) drugs. In recent years, the FTC has instituted numerous enforcement actions against dietary supplement companies for failure to adequately substantiate claims made in advertising or for the use of false or misleading advertising claims. These enforcement actions have often resulted in consent decrees and the payment of civil penalties, restitution, or both, by the companies involved. We may be subject to regulation under various state and local laws that include provisions governing, among other things, the formulation, manufacturing, packaging, labeling, advertising and distribution of dietary supplements, foods, cosmetics and OTC drugs. In addition, The National Advertising Division of the Council of Better Business Bureaus reviews national advertising for truthfulness and accuracy. 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. International Regulations Our international sales for the consumer products segment and ingredients segment are subject to foreign government regulations, which vary substantially from country to country. Most countries, in particular major markets, have established regulations for (a) authorizing the introduction of novel ingredients to market in the food and/or dietary/food/health supplement sectors and (b) for allowing finished goods to be placed on the market for consumer access. Typically, novel ingredients must go through an extensive safety review process (similar to the NDI notification process in the US) by a regulatory or scientific authoritative body. Finished products typically must either be notified or registered (a limited approval process) with the relevant authorities. In some cases, new products can be brought to market without notifying the authorities. The time required to obtain approval by a foreign country may be longer or shorter than that required for the FDA notification process, and the requirements may differ. We may be unable to obtain on a timely basis, if at all, any foreign government approvals necessary for the marketing of our products abroad. Regulation of foods/food supplements in Europe is exercised primarily through the European Union, which regulates the combined market of each of its member states. 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). 11 Table of Contents Major Customers Major customers who accounted for more than 10% of the Company’s total sales were as follows: Years Ended December 31 Major Customers 2020 2019 A.S. Watson Group - Related Party 13.0 % 15.8 % 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. Competitive Business Conditions For our consumer products segment, we are in direct competition with Elysium Health who offers a similar product to TRU NIAGEN®. 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 believe 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/USA) 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 (USA) · Phytolab (Germany) · US Pharmacopoeia (USA) · Extrasynthese (France) 12 Table of Contents 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. The following table sets forth our existing patents and those to which we have licensed rights: Patent Number Title Filing 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 7,846,452 Potent immunostimulatory extracts from microalgae 7/28/2005 12/7/2010 7/28/2025 Licensed from University of Mississippi 8,106,184 Nicotinyl Riboside Compositions and Methods of Use 11/17/2006 1/31/2012 9/20/2027 Licensed from Cornell University 8,114,626 Yeast strain and method for using the same to produce Nicotinamide Riboside 3/26/2009 2/14/2012 1/5/2026 Licensed from Dartmouth College 8,133,917 Pterostilbene as an agonist for the peroxisome proliferator-activated receptor alpha isoform 10/25/2010 3/13/2012 8/18/2025 Licensed from the University of Mississippi and U.S. Department of Agriculture 8,197,807 Nicotinamide Riboside Kinase compositions and Methods for using the same 4/20/2006 6/12/2012 11/19/2026 Licensed from Dartmouth College 8,252,845 Pterostilbene as an agonist for the peroxisome proliferator-activated receptor alpha isoform 2/1/2012 8/28/2012 8/18/2025 Licensed from the University of Mississippi and U.S. Department of Agriculture 13 Table of Contents 8,383,086 Nicotinamide Riboside Kinase compositions and Methods for using the same 4/12/2012 2/26/2013 4/20/2026 Licensed from Dartmouth College 8,809,400 Method to Ameliorate Oxidative Stress and Improve Working Memory Via Pterostilbene Administration 8/8/2011 8/19/2014 10/2/2028 Licensed from the University of Mississippi and U.S. Department of Agriculture 8,841,350 Method for treating non-melanoma skin cancer by inducing UDP-Glucuronosyltransferase activity using pterostilbene 5/8/2012 9/23/2014 5/8/2032 Co-owned by ChromaDex and University of California 8,889,126 Methods and compositions for treating neuropathies 5/28/2010 11/18/2014 6/3/2025 Licensed from Washington University 9,000,147 Nicotyl riboside compositions and methods of use 1/17/2012 4/7/2015 11/17/2026 Licensed from Cornell University 9,028,887 Method improve spatial memory via pterostilbene administration 5/22/2014 5/12/2015 6/10/2028 Licensed from the University of Mississippi and U.S. Department of Agriculture 9,295,688 Methods and compositions for treating neuropathies 10/10/2014 3/29/2016 6/3/2025 Licensed from Washington University 9,321,797 Nicotyl riboside compositions and methods of use 11/17/2014 4/26/2016 11/17/2026 Licensed from Cornell University 9,439,875 Anxiolytic effect of pterostilbene 5/11/2011 9/13/2016 12/11/2031 Licensed from the University of Mississippi and U.S. Department of Agriculture 14 Table of Contents 9,975,915 Crystalline forms of nicotinoyl ribosides, modified derivatives thereof, and phosphorylated analogs thereof, and methods of preparation thereof 11/10/2017 5/22/2018 11/10/2037 Co-owned by ChromaDex and The Queen’s University of Belfast 10,000,519 Methods of Preparing Nicotinamide Riboside and Derivatives Thereof 7/24/2014 6/19/2018 7/24/2034 Licensed from The Queen’s University of Belfast 10,000,520 B-vitamin and amino acid conjugates ofnicotinoyl ribosides and reduced nicotinoyl ribosides, derivatives thereof, and methods of preparation thereof 3/16/2017 6/19/2018 3/16/2037 Co-owned by ChromaDex and The Queen’s University of Belfast 10,183,036 Use of nicotinic acid riboside or nicotinamide riboside derivatives, and reduced derivatives thereof, as NAD+ increasing precursors 4/20/2017 1/22/2019 4/20/2037 Owned by ChromaDex 10,280,190 Nicotinic acid riboside or nicotinamide riboside compositions, reduced derivatives thereof, and the use thereof to enhance skin permeation in treating skin conditions 3/16/2016 5/7/2019 5/31/2036 Co-owned by ChromaDex and The Queen’s University of Belfast 10,688,118 Nicotinamide riboside compositions for topical use in treating skin conditions 10/30/2014 6/23/2020 4/6/2035 Owned by ChromaDex 10,689,411 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 11/10/2017 6/23/2020 11/10/2037 Co-owned by ChromaDex and The Queen’s University of Belfast 10,857,172 Methods for delivering at least one compound selected from nicotinamide riboside (NR), nicotinic acid riboside (NAR), and nicotinamide mononucleotide (NMN), derivatives thereof, or salts thereof, in combination with at least one of thiamine (vitamin B1), riboflavin (vitamin B2), niacin (vitamin B3), and pyridoxine (vitamin B6), to an infant human subject in need of said compound or compounds are provided 4/14/2017 12/8/2020 4/14/2037 Owned by ChromaDex 15 Table of Contents Manufacturing We currently utilize third-party manufacturers to produce and supply dietary supplement, 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 intend to work with manufacturing companies that can meet the standards imposed by the FDA, the International Organization for Standardization and the quality standards that we will require for our own internal policies and procedures. We expect to 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. W.R. Grace & Co. -Conn. (“Grace”) is the Company’s exclusive manufacturer for the supply of NR. Effective as of September 17, 2020, the Company entered into a Sixth Amendment (the “Sixth 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 (the “Grace Patents”). Pursuant to the Sixth Amendment, the Grace Manufacturing Agreement expires on December 31, 2021, subject to additional two-year renewal periods to be negotiated by the parties. In addition, the Grace Manufacturing Agreement may be terminated by (a) the Company by providing 12 months’ notice prior to the end of the current term, (b) Grace by providing 12 months’ notice of its intent to cease manufacture of NR (a “Market Exit”) and (c) a party in the case of (1) a material breach by the other party that is not cured within 30 days, (2) three material breaches by the other party in any 12 month period, or (3) bankruptcy of the other party. In the event that certain conditions are met, then the Company will become a licensee of the Grace Patents. 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. Research and Development To date, 11 human clinical trials have been published on our proprietary ingredient NIAGEN® demonstrating its safety and/or efficacy in healthy human volunteers. In addition, no adverse effects have been attributed to NIAGEN®. In both 2015 and 2018, NIAGEN® was successfully notified to the FDA as a “New Dietary Ingredient.” NIAGEN® was also successfully notified to FDA as “Generally Recognized as Safe” in August 2016. 16 Table of Contents In June of 2020, the ChromaDex External Research Program (CERP) achieved its 200 th research agreement and over 100 preclinical studies and 11 peer-reviewed human clinical trial publications involving NIAGEN® . Through our research and development laboratory in Longmont, Colorado, we intend to develop and evaluate products that we are planning to take to market as well as explore cost saving processes for existing products. Research and development costs for the fiscal years ended December 31, 2020, and December 31, 2019, were approximately $3.7 million and $4.4 million, respectively. Environmental Compliance We incur significant expense in complying with GMPs and safe handling and disposal of materials used in our research and manufacturing activities. We do not anticipate incurring additional material expense to comply with federal, state and local environmental laws and regulations. Working Capital The Company’s working capital at the end of years 2020 and 2019 was approximately $4.9 million and $4.1 million, respectively. The Company measures working capital by adding trade receivables and inventories, and subtracting accounts payable. Most of the working capital is consumed by our consumer products segment and ingredients segment as the operations require a large amount of inventory to be on hand. As the consumer products segment and ingredients segment grow, more working capital will likely be needed to support the operations. Backlog Orders For our consumer products segment where we ship products internationally to distributors, we may have a backlog from time to time as the production of TRU NIAGEN® finished bottles require up to three months lead time by our third-party contract manufacturers. As of December 31, 2020 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 our analytical reference standards and services segment, we normally have a small backlog of orders for reference standards. These orders amount to approximately $25,000 or less. Because we list over 1,500 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 2 to 3 months. Facilities For information on our facilities, see “Properties” in Item 2 of this Form 10-K. Employees As of December 31, 2020, ChromaDex had approximately 110 employees. We consider our relationships with our employees to be satisfactory. None of our employees is covered by a collective bargaining agreement. 17 Table of Contents Financial Information about Geographic Areas Please refer to Item 8 Financial Statements and Supplementary Data of this Annual Report on Form 10-K for financial information about geographic areas. Available Information Our Internet 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 Securities and Exchange Commission. 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 an Internet website that contains reports, and other information regarding issuers that file electronically with the SEC at www.sec.gov. 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.