10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021

Commission File Number: 001-37752

CHROMADEX CORPORATION

(Exact Name of Registrant as Specified in its Charter)

Delaware	26-2940963
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
10900 Wilshire Blvd. Suite 600, Los Angeles, California	90024
(Address of Principal Executive Offices)	(Zip Code)

Registrant's telephone number, including area code: (310) 388-6706

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of Each exchange on which registered
Common Stock, $0.001 par value per share	CDXC	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒    No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒    No ☐

Indicate by check mark whether the registrant is a large accelerated filer, accelerated filer, non-accelerated filer, smaller reporting company or emerging growth company. See definition of “large accelerated filer, accelerated filer, smaller reporting company and emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐    No ☒

As of May 5, 2021 there were 67,932,548 shares of the registrant’s common stock issued and outstanding.

CHROMADEX CORPORATION
QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION (UNAUDITED)
ITEM 1	FINANCIAL STATEMENTS (UNAUDITED):	5
	Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020	5
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2021 and March 31, 2020	6
	Condensed Consolidated Statements of Stockholders Equity for the three months ended March 31, 2021 and March 31, 2020	7
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and March 31, 2020	8
	Notes to Condensed Consolidated Financial Statements	9
ITEM 2	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	24
ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	32
ITEM 4	CONTROLS AND PROCEDURES	33
PART II - OTHER INFORMATION
ITEM 1	LEGAL PROCEEDINGS	34
ITEM 1A	RISK FACTORS	34
ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	54
ITEM 3	DEFAULTS UPON SENIOR SECURITIES	54
ITEM 4	MINE SAFETY DISCLOSURES	54
ITEM 5	OTHER INFORMATION	54
ITEM 6	EXHIBITS	55
SIGNATURES		57

2

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements that involve risks and uncertainties. We make such forward-looking statements pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by words such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or the negative of these words or other comparable terminology. These forward-looking statements include, but are not limited to, statements relating to our business, business strategy, products and services we may offer in the future, the outcome and impact of litigation, the timing and results of future regulatory filings, the timing and results of future clinical trials, our ability to collect from major customers, sales and marketing strategy and capital outlook.

Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Part II, Item 1A, “Risk Factors” of this Quarterly Report. Given these uncertainties, you should not place undue reliance on these forward-looking statements. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

Unless the context otherwise indicates, references in this Quarterly Report to the terms “ChromaDex”, “the Company”, “we,” “our, and “us” refer to ChromaDex Corporation.

3

SUMMARY OF RISK FACTORS

An investment in shares of our common stock involves a high degree of risk. Below is a list of the more significant risks associated with our business. This summary does not address all of the risks that we face. Additional discussion of the risks listed in this summary, as well as other risks that we face, are set forth under Part I, Item 1A, “Risk Factors” in this Quarterly Report. Some of the material risks associated with our business include the following:

· The COVID-19 pandemic has adversely affected, and is expected to continue to pose risks to our business, results of operations, financial condition and cash flows, and other epidemics or outbreaks of infectious diseases may have a similar impact.

· We have a history of operating losses, may need additional financing to meet our future long-term capital requirements and may be unable to raise sufficient capital on favorable terms or at all.

· Our ability to protect our intellectual property and proprietary technology through patents and other means is uncertain and may be inadequate, which would pose risks to our business, results of operations, financial condition and cash flows.

· We are currently engaged in substantial and complex litigation with Elysium Health, Inc. and Elysium Health LLC (collectively, “Elysium”), the outcome of which could materially harm our business, results of operations, financial condition and cash flows. 

· Our TRU NIAGEN® products are not approved by the United States Food and Drug Administration or any foreign regulatory authority to mitigate, prevent, treat, diagnose or cure COVID-19 or any other disease or condition.

· The future growth and profitability of our consumer product business will depend in large part upon the effectiveness and efficiency of our marketing efforts and our ability to select effective markets and media in which to market and advertise.

· Unfavorable publicity or consumer perception of our products and any similar products distributed by other companies could have a material adverse effect on our business, results of operations, financial condition and cash flows.

· Our operating results may fluctuate significantly as a result of a variety of factors, many of which are outside of our control.

· We rely on single or a limited number of third-party suppliers for the raw materials required to produce our products. 

· Any inability to maintain sales, marketing and distribution capabilities or maintain arrangements with third parties to sell, market and distribute our products, would pose risks to our business, results of operations, financial condition and cash flows.

· Our failure to establish and maintain effective internal control over financial reporting could result in material misstatements in our financial statements, our failure to meet our reporting obligations and cause investors to lose confidence in our reported financial information, which in turn could cause the trading price of our common stock to decline.

· Government regulations of our customer’s business are extensive and are constantly changing. Changes in these regulations can significantly affect customer demand for our products and services.

· The market price of our common stock may be volatile and adversely affected by several factors.

· We have not paid cash dividends in the past and do not expect to pay cash dividends in the foreseeable future. Any return on investment may be limited to the value of our common stock.

· We have a significant number of outstanding options. Future sales of these shares could adversely affect the market price of our common stock.

· We may become involved in securities class action litigation that could divert management’s attention and harm our business, results of operations, financial condition and cash flows.

4

PART I - FINANCIAL INFORMATION (UNAUDITED)

Item 1. Financial Statements (UNAUDITED)

ChromaDex Corporation and Subsidiaries

Condensed Consolidated Balance Sheets

March 31, 2021 and December 31, 2020

(In thousands, except per share data)

	Mar. 31, 2021			Dec. 31, 2020
Assets
Current Assets
Cash, including restricted cash of $0.2 million and $0.2 million, respectively	$	44,691		$	16,697
Trade receivables, net of allowances of $0.2 million and $0.2 million, respectively;
Receivables from Related Party: $1.3 million and $0.9 million, respectively		4,647			2,694
Inventories		12,762			11,683
Prepaid expenses and other assets		1,119			1,145
Total current assets		63,219			32,219
Leasehold Improvements and Equipment, net		3,058			3,206
Intangible Assets, net		1,022			1,082
Right of Use Assets		1,100			1,226
Other Long-term Assets		594			625
Total assets	$	68,993		$	38,358
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable	$	11,693		$	9,445
Accrued expenses		7,328			6,133
Current maturities of operating lease obligations		485			589
Current maturities of finance lease obligations		19			31
Customer deposits		231			278
Total current liabilities		19,756			16,476
Deferred Revenue		4,441			4,441
Operating Lease Obligations, Less Current Maturities		947			997
Finance Lease Obligations, Less Current Maturities		17			20
Total liabilities		25,161			21,934
Commitments and Contingencies
Stockholders' Equity
Common stock, $.001 par value; authorized 150,000 shares; issued and outstanding March 31, 2021 67,702 shares and December 31, 2020 61,881 shares		68			62
Additional paid-in capital		192,972			158,190
Accumulated deficit		(149,206	)		(141,825	)
Cumulative translation adjustments		(2	)		(3	)
Total stockholders' equity		43,832			16,424
Total liabilities and stockholders' equity	$	68,993		$	38,358

See Notes to Consolidated Financial Statements.                 

5

ChromaDex Corporation and Subsidiaries

Condensed Consolidated Statements of Operations

For the Three Month Periods Ended March 31, 2021 and March 31, 2020

(In thousands, except per share data)

	Mar. 31, 2021			Mar. 31, 2020
Sales, net	$	14,683		$	14,345
Cost of sales		5,449			6,034
Gross profit		9,234			8,311
Operating expenses:
Sales and marketing		6,258			4,447
Research and development		824			919
General and administrative		9,514			8,835
Operating expenses		16,596			14,201
Operating loss		(7,362	)		(5,890	)
Nonoperating expense:
Interest expense, net		(19	)		(12	)
Nonoperating expense		(19	)		(12	)
Net loss	$	(7,381	)	$	(5,902	)
Basic and diluted loss per common share	$	(0.12	)	$	(0.10	)
Basic and diluted weighted average common shares outstanding		64,164			59,782

See Notes to Consolidated Financial Statements.

6

ChromaDex Corporation and Subsidiaries

Condensed Consolidated Statement of Stockholders' Equity

For the Three Month Periods Ended March 31, 2021 and March 31, 2020

(In thousands)

	Common Stock				Additional					Cumulative			Total
	Shares		Amount		Paid-in Capital		Accumulated  Deficit			Translation  Adjustments			Stockholders'  Equity
Balance, January 1, 2021		61,881	$	62	$	158,190	$	(141,825	)	$	(3	)	$	16,424
Issuance of common stock, net of offering costs of $0.1 million		3,846		4		24,867		-			-			24,871
Exercise of stock options		1,975		2		8,631		-			-			8,633
Share-based compensation		-		-		1,284		-			-			1,284
Net loss		-		-		-		(7,381	)		1			(7,380	)
Balance, March 31, 2021		67,702	$	68	$	192,972	$	(149,206	)	$	(2	)	$	43,832

	Common Stock				Additional					Cumulative		Total
	Shares		Amount		Paid-in Capital		Accumulated  Deficit			Translation Adjustments		Stockholders'  Equity
Balance, January 1, 2020		59,562	$	60	$	142,285	$	(121,900	)	$	-	$	20,445
Exercise of stock options		43		-		132		-			-		132
Share-based compensation		-		-		1,873		-			-		1,873
Net loss		-		-		-		(5,902	)				(5,902	)
Balance, March 31, 2020		59,605	$	60	$	144,290	$	(127,802	)	$	-	$	16,548

See Notes to Consolidated Financial Statements.      

7

ChromaDex Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

For the Three Month Periods Ended March 31, 2021 and March 31, 2020

(In thousands)

	Mar. 31, 2021			Mar. 31, 2020
Cash Flows From Operating Activities
Net loss	$	(7,381	)	$	(5,902	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of leasehold improvements and equipment		221			214
Amortization of intangibles		60			62
Amortization of right of use assets		126			92
Share-based compensation expense		1,284			1,873
Allowance for doubtful trade receivables		14			(2,708	)
Non-cash financing costs		28			23
Changes in operating assets and liabilities:
Trade receivables		(1,967	)		1,326
Inventories		(1,079	)		255
Implementation costs for cloud computing arrangement		(28	)		-
Prepaid expenses and other assets		74			252
Accounts payable		2,248			(1,467	)
Accrued expenses		1,196			833
Customer deposits and other		(47	)		69
Principal payments on operating leases		(154	)		(143	)
Net cash used in operating activities		(5,405	)		(5,221	)
Cash Flows From Investing Activities
Purchases of leasehold improvements and equipment		(46	)		(15	)
Investment in other long-term assets		-			(5	)
Net cash used in investing activities		(46	)		(20	)
Cash Flows From Financing Activities
Proceeds from issuance of common stock, net		24,871			-
Proceeds from exercise of stock options		8,633			132
Payment of debt issuance costs		(44	)		(15	)
Principal payments on finance leases		(15	)		(80	)
Net cash provided by financing activities		33,445			37
Net increase (decrease) in cash		27,994			(5,204	)
Cash Beginning of Period, including restricted cash of $0.2 million for both 2021 and 2020		16,697			18,812
Cash Ending of Period, including restricted cash $0.2 million for both 2021 and 2020	$	44,691		$	13,608
Supplemental Disclosures of Cash Flow Information
Cash payments for interest on finance leases	$	1		$	6
Supplemental Schedule of Noncash Investing Activity
Financing lease obligation incurred for purchase of computer equipment and software	$	-		$	47

See Notes to Consolidated Financial Statements.

8

Note 1. Interim Financial Statements

The accompanying financial statements of ChromaDex Corporation and its wholly owned subsidiaries, ChromaDex, Inc., ChromaDex Analytics, Inc., ChromaDex Asia Limited and ChromaDex Europa B.V. (collectively referred to herein as “ChromaDex” or the “Company” or, in the first person as “we”, “us” and “our”) include all adjustments, consisting of normal recurring adjustments and accruals, that, in the opinion of the management of the Company, are necessary for a fair presentation of the Company’s financial position as of March 31, 2021 and results of operations and cash flows for the three months ended March 31, 2021 and March 31, 2020. These unaudited interim financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended December 31, 2020 appearing in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “Commission”) on March 12, 2021. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results to be achieved for the full year ending on December 31, 2021. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

The balance sheet at December 31, 2020 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements.

Note 2. Nature of Business

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. ChromaDex is the innovator behind NAD+ precursor nicotinamide riboside (“NR”), commercialized as the flagship ingredient NIAGEN®. Nicotinamide riboside and other NAD+ precursors are protected by ChromaDex’s patent portfolio. ChromaDex delivers NIAGEN® as the sole active ingredient in its consumer product TRU NIAGEN®. The Company also has analytical reference standards and services segment, which focuses on natural product fine chemicals (known as “phytochemicals”) and related chemistry services.

Note 3. Liquidity

The Company's net cash outflow from operating activities was approximately $5.4 million for the three-month period ended March 31, 2021. As of March 31, 2021, cash and cash equivalents totaled approximately $44.7 million, which includes restricted cash of approximately $0.2 million.

The Company anticipates that its current cash, cash equivalents, and available line of credit up to $7.0 million from Western Alliance Bank will be sufficient to meet its projected operating plans through at least the next twelve months from the issuance date of these financial statements. The Company may, however, seek additional capital within the next twelve months, both to meet its projected operating plans within the next twelve months and/or to fund its longer-term strategic objectives. In June 2020, we filed a $125.0 million registration statement on Form S-3 with the Commission, utilizing a “shelf” registration process. Under this shelf registration process, we may sell securities from time to time, including up to $50.0 million pursuant to the At Market Issuance Sales Agreement, dated as of June 12, 2020, with B. Riley FBR, Inc. and Raymond James & Associates, Inc. (the “ATM Facility”). As of March 31, 2021, we have not sold any securities pursuant to the ATM Facility.

9

Note 4. Significant Accounting Policies

Basis of presentation: The financial statements and accompanying notes have been prepared on a consolidated basis and reflect the consolidated financial position of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated from these financial statements. The Company’s fiscal year ends on December 31.

Recent accounting standards: In June 2016, the Financial Accounting Standards Board issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard’s main goal is to improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope. The new guidance represents significant changes to accounting for credit losses: (i) full lifetime expected credit losses will be recognized upon initial recognition of an asset in scope; (ii) the current incurred loss impairment model that recognizes losses when a probable threshold is met will be replaced with the expected credit loss impairment method without recognition threshold; and (iii) the expected credit losses estimate will be based upon historical information, current conditions, and reasonable and supportable forecasts. ASU 2016-13 introduces two distinctive credit loss impairment models: (i) current expected credit loss impairment model (Subtopic 326-20) applicable to financial assets measured at amortized cost; and (ii) available-for-sale debt securities impairment model (Subtopic 326-30). ASU 2016-13 is effective for public entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Public entities that qualify as a smaller reporting company can elect to defer compliance effective for fiscal years beginning after December 15, 2022. We are currently evaluating the impact of our pending adoption of ASU 2016-13 on our consolidated financial statements.

Note 5. Earnings Per Share Applicable to Common Stockholders

The following table sets forth the computations of earnings per share amounts applicable to common stockholders for the three months ended March 31, 2021 and March 31, 2020:

	Three Months Ended
(In thousands, except per share data)	Mar. 31, 2021			Mar. 31, 2020
Net loss	$	(7,381	)	$	(5,902	)
Basic and diluted loss per common share	$	(0.12	)	$	(0.10	)
Basic and diluted weighted average common shares outstanding (1):		64,164			59,782
Potentially dilutive securities (2):
Stock options		10,157			12,194
Restricted stock units		92			-

______________

(1) Includes approximately 0.2 million and 0.2 million nonvested shares of restricted stock for the periods ending Mar. 31, 2021 and Mar. 31, 2020, respectively, which are participating securities that feature voting and dividend rights.

(2) Excluded from the computation of loss per share as their impact is antidilutive.

10

Note 6. Related Party Transactions

Sale of consumer products

	Net sales Three months ended Mar. 31, 2021	Net sales Three months ended Mar. 31, 2020	Trade receivable at Mar. 31, 2021	Trade receivable at Dec. 31, 2020
A.S. Watson Group	$1.6 million	$1.8 million	$1.3 million	$0.9 million

*A.S. Watson Group is a related party through common ownership of an enterprise that beneficially owns more than 10% of the common stock of the Company.

Note 7. Inventories

The amounts of major classes of inventory as of March 31, 2021 and December 31, 2020 are as follows:

(In thousands)	Mar. 31, 2021		Dec. 31, 2020
Consumer Products - Finished Goods	$	3,839	$	2,358
Consumer Products - Work in Process		4,620		5,718
Bulk ingredients		3,758		3,065
Reference standards		545		542
	$	12,762	$	11,683

Note 8. Stock Issuance

On February 20, 2021, the Company entered into a Securities Purchase Agreement with EverFund (the "Financing”) pursuant to which the Company agreed to sell and issue approximately 3.8 million of common stock at a price of $6.50 per share. On February 23, 2021, the Company closed the Financing and received proceeds of $24.9 million, net of offering costs.

Note 9. Leases

Operating Leases

As of March 31, 2021, the Company had right of use assets stemming from operating leases of approximately $1.1 million, and corresponding operating lease liabilities of approximately $1.4 million. For the three months ended March 31, 2021 and March 31, 2020, the following were expenses incurred in connection with our operating leases:

11

(In thousands)	For the Three Months Ended Mar. 31, 2021		For the Three Months Ended Mar. 31, 2020
Operating leases
Operating lease expense	$	154	$	120
Variable lease expense		40		69
Operating lease expense		194		189
Short-term lease rent expense		62		64
Total expense	$	256	$	253

	At Mar. 31, 2021
Weighted-average remaining lease term (years) operating leases		2.5
Weighted-average discount rate operating leases		7.0	%

Minimum future lease payments under operating leases as of March 31, 2021 are as follows:

(In thousands)
Nine Months Ending December 31, 2021	$	474
Year Ending December 31, 2022		299
Year Ending December 31, 2023		308
Year Ending December 31, 2024		310
Year Ending December 31, 2025		263
Total		1,654
Less present value discount		222
Operating lease liabilities		1,432
Less current portion		485
Long-term obligations under operating leases	$	947

Note 10. Share-Based Compensation

Equity Plans

At the discretion of the compensation committee of the Board of Directors (the “Compensation Committee”), the Company may grant options to purchase the Company’s common stock, restricted stock units and other equity awards to certain individuals from time to time. Management and the Compensation Committee determine the terms of awards which include the exercise price, vesting conditions and expiration dates at the time of grant. Expiration dates for stock options are not to exceed 10 years from their date of issuance.

The Company grants awards to recipients through the 2017 Equity Incentive Plan, as amended (the “2017 Plan”), which was approved by stockholders and the Board of Directors. As of March 31, 2021, under the 2017 Plan, the Company is authorized to issue shares subject to awards that total no more than the sum of (i) 14,500,000 new shares, (ii) approximately 384,000 unallocated shares remaining available for the grant of new awards under the Second Amended and Restated 2007 Equity Incentive Plan, (iii) any returning shares such as forfeited, cancelled, or expired shares and (iv) 500,000 shares pursuant to an inducement award. The remaining number of shares available for issuance under the 2017 Plan totaled approximately 5.6 million shares at March 31, 2021.

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General Vesting Conditions

The stock option and restricted stock unit awards are generally subject to a one-year cliff vesting period after which 1/3 of the shares vest with the remaining shares vesting ratably over a two-year period subject to the passage of time. However, some stock option awards are market or performance based and vest based on certain triggering events established by the Compensation Committee.

The fair value of the Company’s stock options that are not market based is estimated at the date of grant using the Black-Scholes option pricing model. The table below outlines the weighted average assumptions for options granted during the three months ended March 31, 2021.

Three months Ended March 31, 2021
Expected term	6 years
Expected volatility		73	%
Risk-free rate		1	%
Expected dividends		0	%

Service Period Based Stock Options

The following table summarizes activity of service period-based stock options at March 31, 2021 and changes during the three months then ended (in thousands except per-share data and remaining contractual term):

				Weighted Average
						Remaining				Aggregate
	Number of			Exercise		Contractual		Fair		Intrinsic
	Shares			Price		Term (Years)		Value		Value
Outstanding at Dec. 31, 2020		10,833		$	3.96		6.8
Options Granted		593			10.29		10.0	$	6.56
Options Exercised		(1,935	)		4.37					$	12,393
Options Forfeited		(375	)		4.34
Outstanding at Mar. 31, 2021		9,116		$	4.27		7.0			$	47,278	*
Exercisable at Mar. 31, 2021		5,666		$	3.63		5.6			$	32,326	*

*The aggregate intrinsic values in the table above are based on the Company’s stock price of $9.34, which is the closing price of the Company’s stock on the last day of business for the period ended March 31, 2021.

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Performance Based Stock Options

The Company also grants stock option awards that are performance based and vest based on the achievement of certain criteria established from time to time by the Compensation Committee. If these performance criteria are not met, the compensation expenses are not recognized and the expenses that have been recognized will be reversed.

The following table summarizes performance based stock options activity at March 31, 2021 and changes during the three months then ended (in thousands except per share data and remaining contractual term):

				Weighted Average
						Remaining			Aggregate
	Number of			Exercise		Contractual		Fair	Intrinsic
	Shares			Price		Term (Years)		Value	Value
Outstanding at Dec. 31, 2020		81		$	4.34		3.1
Options Granted		-			-
Options Exercised		(40	)		4.34				$	401
Options Forfeited		-			-
Outstanding at Mar. 31, 2021		41		$	4.34		2.8		$	205	*
Exercisable at Mar. 31, 2021		41		$	4.34		2.8		$	205	*

*The aggregate intrinsic values in the table above are based on the Company’s stock price of $9.34, which is the closing price of the Company’s stock on the last day of business for the period ended March 31, 2021.

Total Remaining Unamortized Compensation for Stock Options

As of March 31, 2021, there was approximately $10.0 million of total unrecognized compensation expense related to non-vested stock options granted under the plans. That cost is expected to be recognized over a weighted average period of 2 years.

Restricted Stock Units

Restricted stock unit awards are generally subject to a one-year cliff vesting period after which 1/3 of the shares vest with the remaining shares vesting ratably over a two-year period subject to the passage of time. The following table summarizes activity of restricted stock unit awards granted at March 31, 2021 and changes during the three months then ended (in thousands except per share fair value):

			Weighted Average
	Shares		Fair Value
Unvested shares at Dec. 31, 2020		-	$	-
Granted		92		11.83
Vested		-		-
Forfeited		-		-
Unvested shares at Mar. 31, 2021		92	$	11.83
Expected to Vest as of Mar. 31, 2021		92	$	11.83

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Total Share-Based Compensation

Total share-based compensation expenses were as follows:

	Three months ending
(In thousands)	Mar. 31, 2021		Mar. 31, 2020
Share-based compensation expense
Cost of sales	$	40	$	33
Sales and marketing		388		232
Research and development		138		138
General and administrative		718		1,470
Total	$	1,284	$	1,873

Note 11. Business Segments

The Company has the following three reportable segments for the three-month period ended March 31, 2021:

· Consumer products segment: provides finished dietary supplement products that contain the Company's proprietary ingredients directly to consumers as well as to distributors.

· Ingredients segment: develops and commercializes proprietary-based ingredient technologies and supplies these ingredients as raw materials to the manufacturers of consumer products.

· Analytical reference standards and services segment: includes supply of phytochemical reference standards and other research and development services.

The “Corporate and other” classification includes corporate items not allocated by the Company to each reportable segment. Further, there are no intersegment sales that require elimination. The Company evaluates performance and allocates resources based on reviewing gross margin by reportable segment.

Three months ended	Consumer				Analytical Reference
March 31, 2021	Products		Ingredients		Standards and		Corporate
(In thousands)	segment		segment		Services segment		and other			Total
Net sales	$	12,437	$	1,315	$	931	$	-		$	14,683
Cost of sales		4,203		563		683		-			5,449
Gross profit		8,234		752		248		-			9,234
Operating expenses:
Sales and marketing		6,111		10		137		-			6,258
Research and development		751		73		-		-			824
General and administrative		-		-		-		9,514			9,514
Operating expenses		6,862		83		137		9,514			16,596
Operating income (loss)	$	1,372	$	669	$	111	$	(9,514	)	$	(7,362	)

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Three months ended	Consumer					Analytical Reference
March 31, 2020	Products		Ingredients			Standards and			Corporate
(In thousands)	segment		segment			Services segment			and other			Total
Net sales	$	11,144	$	2,475		$	726		$	-		$	14,345
Cost of sales		4,302		1,056			676			-			6,034
Gross profit		6,842		1,419			50			-			8,311
Operating expenses:
Sales and marketing		4,409		(84	)		122			-			4,447
Research and development		782		137			-			-			919
General and administrative		-		-			-			8,835			8,835
Operating expenses		5,191		53			122			8,835			14,201
Operating income (loss)	$	1,651	$	1,366		$	(72	)	$	(8,835	)	$	(5,890	)

	Consumer				Analytical Reference
At March 31, 2021	Products		Ingredients		Standards and		Corporate
(In thousands)	segment		segment		Services segment		and other		Total
Total assets	$	13,353	$	4,692	$	822	$	50,126	$	68,993

	Consumer				Analytical Reference
At December 31, 2020	Products		Ingredients		Standards and		Corporate
(In thousands)	segment		segment		Services segment		and other		Total
Total assets	$	11,567	$	3,701	$	802	$	22,288	$	38,358

Disaggregation of Revenue

We disaggregate our revenue from contracts with customers by type of goods or services for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. See details in the tables below.

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Three Months Ended March 31, 2021 (In thousands)	Consumer Products Segment		Ingredients Segment		Analytical Reference Standards and Services Segment		Total
TRU NIAGEN , Consumer Product	$	12,437	$	-	$	-	$	12,437
NIAGEN Ingredient		-		1,203		-		1,203
Subtotal NIAGEN Related	$	12,437	$	1,203	$	-	$	13,640
Other Ingredients		-		112		-		112
Reference Standards		-		-		800		800
Consulting and Other		-		-		131		131
Subtotal Other Goods and Services	$	-	$	112	$	931	$	1,043
Total Net Sales	$	12,437	$	1,315	$	931	$	14,683

Three Months Ended March 31, 2020 (In thousands)	Consumer Products Segment		Ingredients Segment		Analytical Reference Standards and Services Segment		Total
TRU NIAGEN , Consumer Product	$	11,144	$	-	$	-	$	11,144
NIAGEN Ingredient		-		1,961		-		1,961
Subtotal NIAGEN Related	$	11,144	$	1,961	$	-	$	13,105
Other Ingredients		-		514		-		514
Reference Standards		-		-		673		673
Consulting and Other		-		-		53		53
Subtotal Other Goods and Services	$	-	$	514	$	726	$	1,240
Total Net Sales	$	11,144	$	2,475	$	726	$	14,345

Disclosure of Major Customers

Major customers who accounted for more than 10% of the Company’s total sales were as follows:

	Three months ended
Major Customers	Mar. 31, 2021			Mar. 31, 2020
A.S. Watson Group - Related Party		10.6	%		12.7	%
Life Extension	*				10.4	%

* Represents less than 10%.

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Major accounts which had more than 10% of the Company’s total trade receivables were as follows:

	Percentage of the Company's Total Trade Receivables
Major Customers	At March 31, 2021			At December 31, 2020
A.S. Watson Group - Related Party		29.0	%		31.9	%
Matakana Health		17.3	%		11.1	%
Life Extension		16.0	%		17.7	%
Amazon Marketplaces		15.7	%		12.0	%

* Represents less than 10%.    

Note 12. Commitments and Contingencies

Legal proceedings

1. Elysium Health, LLC

(A) California Action

On December 29, 2016, ChromaDex, Inc. filed a complaint in the United States District Court for the Central District of California, naming Elysium Health, Inc. (together with Elysium Health, LLC, “Elysium”) as defendant (the “Complaint”). On January 25, 2017, Elysium filed an answer and counterclaims in response to the Complaint (together with the Complaint, the “California Action”). Over the course of the California Action, the parties have each filed amended pleadings several times and have each engaged in several rounds of motions to dismiss and one round of motion for judgment on the pleadings with respect to various claims. Most recently, on November 27, 2018, ChromaDex, Inc. filed a fifth amended complaint that added an individual, Mark Morris, as a defendant. Elysium and Morris (“the Defendants”) moved to dismiss on December 21, 2018. The court denied Defendants’ motion on February 4, 2019. Defendants filed their answer to ChromaDex, Inc.’s fifth amended complaint on February 19, 2019. ChromaDex, Inc. filed an answer to Elysium’s restated counterclaims on March 5, 2019. Discovery closed on August 9, 2019.

On August 16, 2019, the parties filed motions for partial summary judgment as to certain claims and counterclaims. The parties filed opposition briefs on August 28, 2019, and reply briefs on September 4, 2019. On October 9, 2019, among other things, the court vacated the previously scheduled trial date, ordered supplemental briefing with respect to certain issues related to summary judgment. Elysium filed its opening supplemental brief on October 30, 2019, ChromaDex filed its opening supplemental brief on November 18, 2019, and Elysium filed a reply brief on November 27, 2019, and the court heard argument on January 13, 2020. On January 16, 2020, the court granted both parties’ motions for summary judgment in part and denied both in part. On ChromaDex’s motion, the court granted summary judgment in favor of ChromaDex on Elysium’s counterclaims for (i) breach of contract related to manufacturing NIAGEN® according to the defined standard, selling NIAGEN and ingredients that are substantially similar to pterostilbene to other customers, distributing the NIAGEN® product specifications, and failing to provide information concerning the quality and identity of NIAGEN®, and (ii) breach of the implied covenant of good faith and fair dealing. The court denied summary judgment on Elysium’s counterclaims for (i) fraudulent inducement of the Trademark License and Royalty Agreement, dated February 3, 2014, by and between ChromaDex, Inc. and Elysium (the “License Agreement”), (ii) patent misuse, and (iii) unjust enrichment. On Elysium’s motion, the court granted summary judgment in favor of Elysium on ChromaDex’s claim for damages related to $110,000 in avoided costs arising from documents that Elysium used in violation of the Supply Agreement, dated February 3, 2014, by and between ChromaDex, Inc. and Elysium, as amended (the “NIAGEN® Supply Agreement”). The court denied summary judgment on Elysium’s counterclaim for breach of contract related to certain refunds or credits to Elysium. The court also denied summary judgment on ChromaDex’s breach of contract claim against Morris and claims for disgorgement of $8.3 million in Elysium’s resale profits, $600,000 for a price discount received by Elysium, and $684,781 in Morris’s compensation.

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Following the court’s January 16, 2020 order, the claims that ChromaDex, Inc. presently asserts in the California Action, among other allegations, are that (i) Elysium breached the Supply Agreement, dated June 26, 2014, by and between ChromaDex, Inc. and Elysium (the “pTeroPure® Supply Agreement”), by failing to make payments to ChromaDex, Inc. for purchases of pTeroPure® and by improper disclosure of confidential ChromaDex, Inc. information pursuant to the pTeroPure® Supply Agreement, (ii) Elysium breached the NIAGEN® Supply Agreement, by failing to make payments to ChromaDex, Inc. for purchases of NIAGEN®, (iii) Defendants willfully and maliciously misappropriated ChromaDex, Inc. trade secrets concerning its ingredient sales business under both the California Uniform Trade Secrets Act and the Federal Defend Trade Secrets Act, (iv) Morris breached two confidentiality agreements he signed by improperly stealing confidential ChromaDex, Inc. documents and information, (v) Morris breached his fiduciary duty to ChromaDex, Inc. by lying to and competing with ChromaDex, Inc. while still employed there, and (vi) Elysium aided and abetted Morris’s breach of fiduciary duty. ChromaDex, Inc. is seeking damages and interest for Elysium’s alleged breaches of the NIAGEN® Supply Agreement and pTeroPure® Supply Agreement and Morris’s alleged breaches of his confidentiality agreements, compensatory damages and interest, punitive damages, injunctive relief, and attorney’s fees for Defendants’ alleged willful and malicious misappropriation of ChromaDex, Inc.’s trade secrets, and compensatory damages and interest, disgorgement of all benefits received, and punitive damages for Morris’s alleged breach of his fiduciary duty and Elysium’s aiding and abetting of that alleged breach.

The claims that Elysium presently alleges in the California Action are that (i) ChromaDex, Inc. breached the NIAGEN® Supply Agreement by not issuing certain refunds or credits to Elysium, (ii) ChromaDex, Inc. fraudulently induced Elysium into entering into the License Agreement, (iv) ChromaDex, Inc.’s conduct constitutes misuse of its patent rights, and (v) ChromaDex, Inc. was unjustly enriched by the royalties Elysium paid pursuant to the License Agreement. Elysium is seeking damages for ChromaDex, Inc.’s alleged breaches of the NIAGEN® Supply Agreement, and compensatory damages, punitive damages, and/or rescission of the License Agreement and restitution of any royalty payments conveyed by Elysium pursuant to the License Agreement, and a declaratory judgment that ChromaDex, Inc. has engaged in patent misuse.

On January 17, 2020, Elysium moved to substitute its counsel. The same day, the court ordered hearing on that motion for January 21, 2020, and granted Elysium’s motion at the hearing. On January 23, 2020, the court issued a scheduling order that, among other things, set trial on the remaining claims to begin on May 12, 2020. On March 19, 2020, in light of the global COVID-19 pandemic and ongoing private mediation efforts, the parties jointly stipulated to adjourn the trial date. The court vacated the trial date on March 20, 2020. The court held a telephonic status conference on June 9, 2020, during which the court indicated that it will reschedule the jury trial as soon as conditions permit. On November 4, 2020, the parties submitted a joint status report indicating that they will propose a new trial date as soon as the court announces that it will resume jury trials. On November 18, 2020, the court set trial to begin on September 21, 2021.

On December 11, 2020, Elysium filed a “Notice of Correction of Depositions” related to the depositions of its chief executive officer, Eric Marcotulli, and chief operating officer, Daniel Alminana, both taken in March 2019. On March 8, 2021, based in part on information that Elysium submitted under seal with that notice, ChromaDex, Inc. filed a motion for sanctions or, in the alternative, reconsideration of the court’s January 16, 2020 order regarding summary judgment, in which ChromaDex, Inc. moved to dismiss Elysium’s third, fourth, and fifth counterclaims. Elysium’s opposition brief was filed on March 22, 2021. ChromaDex, Inc. filed its reply brief on March 29, 2021. On April 27, 2021, the court denied ChromaDex, Inc’s motion for terminating sanctions, but concluded that the evidence at issue in the motion will be admissible at trial.

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(B) Southern District of New York Action

On September 27, 2017, Elysium Health Inc. (“Elysium Health”) filed a complaint in the United States District Court for the Southern District of New York, against ChromaDex, Inc. (the “Elysium SDNY Complaint”). Elysium Health alleged in the Elysium SDNY Complaint that ChromaDex, Inc. made false and misleading statements in a citizen petition to the Food and Drug Administration it filed on or about August 18, 2017. Among other allegations, Elysium Health averred that the citizen petition made Elysium Health’s product appear dangerous, while casting ChromaDex, Inc.’s own product as safe. The Elysium SDNY Complaint asserted four claims for relief: (i) false advertising under the Lanham Act, 15 U.S.C. § 1125(a); (ii) trade libel; (iii) deceptive business practices under New York General Business Law § 349; and (iv) tortious interference with prospective economic relations. On October 26, 2017, ChromaDex, Inc. moved to dismiss the Elysium SDNY Complaint on the grounds that, inter alia, its statements in the citizen petition are immune from liability under the Noerr-Pennington Doctrine, the litigation privilege, and New York’s Anti-SLAPP statute, and that the Elysium SDNY Complaint failed to state a claim. Elysium Health opposed the motion on November 2, 2017. ChromaDex, Inc. filed its reply on November 9, 2017.

On October 26, 2017, ChromaDex, Inc. filed a complaint in the United States District Court for the Southern District of New York against Elysium Health (the “ChromaDex SDNY Complaint”). ChromaDex, Inc. alleges that Elysium Health made material false and misleading statements to consumers in the promotion, marketing, and sale of its health supplement product, Basis, and asserts five claims for relief: (i) false advertising under the Lanham Act, 15 U.S.C. §1125(a); (ii) unfair competition under 15 U.S.C. § 1125(a); (iii) deceptive practices under New York General Business Law § 349; (iv) deceptive practices under New York General Business Law § 350; and (v) tortious interference with prospective economic advantage. On November 16, 2017, Elysium Health moved to dismiss for failure to state a claim. ChromaDex, Inc. opposed the motion on November 30, 2017 and Elysium Health filed a reply on December 7, 2017.

On November 3, 2017, the Court consolidated the Elysium SDNY Complaint and the ChromaDex SDNY Complaint actions under the caption In re Elysium Health-ChromaDex Litigation, 17-cv-7394, and stayed discovery in the consolidated action pending a Court-ordered mediation. The mediation was unsuccessful. On September 27, 2018, the Court issued a combined ruling on both parties’ motions to dismiss. For ChromaDex’s motion to dismiss, the Court converted the part of the motion on the issue of whether the citizen petition is immune under the Noerr-Pennington Doctrine into a motion for summary judgment, and requested supplemental evidence from both parties, which were submitted on October 29, 2018. The Court otherwise denied the motion to dismiss. On January 3, 2019, the Court granted ChromaDex, Inc.’s motion for summary judgment under the Noerr-Pennington Doctrine and dismissed all claims in the Elysium SDNY Complaint. Elysium moved for reconsideration on January 17, 2019. The Court denied Elysium’s motion for reconsideration on February 6, 2019, and issued an amended final order granting ChromaDex, Inc.’s motion for summary judgment on February 7, 2019.

The Court granted in part and denied in part Elysium’s motion to dismiss, sustaining three grounds for ChromaDex’s Lanham Act claims while dismissing two others, sustaining the claim under New York General Business Law § 349, and dismissing the claims under New York General Business Law § 350 and for tortious interference. Elysium filed an answer and counterclaims on October 10, 2018, alleging claims for (i) false advertising under the Lanham Act, 15 U.S.C. §1125(a); (ii) unfair competition under 15 U.S.C. § 1125(a); and (iii) deceptive practices under New York General Business Law § 349. ChromaDex answered Elysium’s counterclaims on November 2, 2018.

ChromaDex, Inc. filed an amended complaint on March 27, 2019, adding new claims against Elysium Health for false advertising and unfair competition under the Lanham Act, 15 U.S.C. § 1125(a). On April 10, 2019, Elysium Health answered the amended complaint and filed amended counterclaims, also adding new claims against ChromaDex, Inc. for false advertising and unfair competition under the Lanham Act, 15 U.S.C. § 1125(a). On July 1, 2019, Elysium Health filed further amended counterclaims, adding new claims under the Copyright Act §§ 106 & 501. On February 9, 2020, ChromaDex, Inc. filed a motion for leave to amend its complaint to add additional claims against Elysium Health for false advertising and unfair competition. On February 10, 2020, Elysium Health filed a motion for leave to amend its counterclaims to identify allegedly false and misleading statements in ChromaDex’s advertising. Those motions were both granted after respective stipulations. On March 12, 2020, Elysium Health answered the second amended complaint. On March 13, 2020, ChromaDex, Inc. filed an answer and objection to Elysium Health’s third amended counterclaims.

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On December 14, 2020, Elysium Health filed a motion to supplement and amend its counterclaims to add claims regarding alleged advertising related to COVID, to add an allegation about a change to the ChromaDex website, and to remove its copyright infringement claim under the Copyright Act. On January 19, 2021, the Court denied Elysium Health’s motion to add claims regarding alleged advertising related to COVID. The Court granted the unopposed requests to add an allegation about a change to ChromaDex’s website and to remove Elysium’s Copyright Act claim. Pursuant to the Court’s order, Elysium filed fourth amended counterclaims on April 21, 2021.

All discovery closed on April 23, 2021 and the deadline to submit the Joint Pretrial Report is June 22, 2021. The Court vacated a previously scheduled trial date because of COVID-19, and the Court has informed the Parties that trial will be rescheduled for November or December 2021.

The Company is unable to predict the outcome of these matters and, at this time, cannot reasonably estimate the possible loss or range of loss with respect to the legal proceedings discussed herein. As of March 31, 2021, ChromaDex, Inc. did not accrue a potential loss for the California Action or the Elysium SDNY Complaint because ChromaDex, Inc. believes that the allegations are without merit and thus it is not probable that a liability has been incurred.

(C) Delaware - Patent Infringement Action

On September 17, 2018, ChromaDex, Inc. and Trustees of Dartmouth College filed a patent infringement complaint in the United States District Court for the District of Delaware against Elysium Health, Inc. The complaint alleges that Elysium’s BASIS® dietary supplement violates U.S. Patents 8,197,807 (the “‘807 Patent”) and 8,383,086 (the “‘086 Patent”) that comprise compositions containing isolated nicotinamide riboside held by Dartmouth and licensed exclusively to ChromaDex, Inc. On October 23, 2018, Elysium filed an answer to the complaint. The answer asserts various affirmative defenses and denies that Plaintiffs are entitled to any relief.

On November 7, 2018, Elysium filed a motion to stay the patent infringement proceedings pending resolution of (1) the inter partes review of the ‘807 Patent and the ‘086 Patent before the Patent Trial and Appeal Board (“PTAB”) and (2) the outcome of the litigation in the California Action. ChromaDex, Inc. filed an opposition brief on November 21, 2018 detailing the issues with Elysium’s motion to stay. In particular, ChromaDex, Inc. argued that given claim 2 of the ‘086 Patent was only included in the PTAB’s inter partes review for procedural reasons the PTAB was unlikely to invalidate claim 2 and therefore litigation in Delaware would continue regardless. In addition, ChromaDex, Inc. argued that the litigation in the California Action is unlikely to have a significant effect on the ongoing patent litigation. After the PTAB released its written decision upholding claim 2 of the ‘086 Patent, proving right ChromaDex, Inc.’s prediction, ChromaDex, Inc. informed the Delaware court of the PTAB’s decision on January 17, 2019. On June 19, 2019, the Delaware court granted in part and denied in part Elysium’s motion, ordering that the case was stayed pending the resolution of Elysium’s patent misuse counterclaim in the California Action.

On November 1, 2019, ChromaDex, Inc. filed a motion to lift the stay due to changed circumstances in the California Action, among other reasons. Briefing on the motion was completed on November 22, 2019. On January 6, 2020, the Delaware court issued an oral order instructing the parties to submit a joint status report after the January 13, 2020 motions hearing in the California Action. The joint status report was submitted on January 30, 2020. On February 4, 2020, the Delaware court issued an order granting ChromaDex, Inc.’s motion to lift the stay and setting a scheduling conference for March 10, 2020. On March 19, 2020, the Delaware court entered a scheduling order, which, among other things, set the claim-construction hearing for December 17, 2020 and trial for the week of September 27, 2021. On April 17, 2020, ChromaDex, Inc. served infringement contentions. Elysium filed a Second Amended Answer on July 10, 2020.

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On April 24, 2020, ChromaDex, Inc. moved for leave to amend the complaint to add Healthspan Research, LLC as a plaintiff. On May 5, 2020, Elysium filed its opposition to ChromaDex, Inc.’s motion for leave to amend and moved to dismiss ChromaDex, Inc. for alleged lack of standing. ChromaDex, Inc. filed its opposition to Elysium’s motion to dismiss and reply in support of its motion to amend on May 19, 2020. Elysium filed its reply in support of its motion to dismiss on May 26, 2020. The Court held a hearing on the motion for leave to amend the complaint and Elysium’s motion to dismiss on September 16, 2020. On December 15, 2020, the Court entered orders (i) granting in part and denying in part Elysium’s motion to dismiss ChromaDex, Inc. for alleged lack of standing; and (ii) denying ChromaDex, Inc.’s motion for leave to amend. ChromaDex, Inc. filed a motion for reargument on December 29, 2020. Elysium filed a response to the motion for reargument on January 28, 2021. ChromaDex, Inc. filed a motion for leave to file a reply on February 8, 2021. Elysium filed a response to the motion for leave to file a reply on February 12, 2021. ChromaDex, Inc. filed a reply to the motion for leave to file a reply on February 19, 2021. The Court granted the motion for leave to file the reply on April 26, 2021, and denied the motion for reargument on April 27, 2021.

On July 22, 2020 the parties filed a Joint Claim Construction Chart and respective motions for claim construction. The parties filed a Joint Claim Construction Brief on November 5, 2020. The Court held a Markman hearing on claim-construction issues on December 17, 2020. The Court entered a claim-construction ruling on January 5, 2021.

Fact discovery closed on January 26, 2021. Opening expert reports were served on February 9, 2021. Responsive expert reports were served on March 9, 2021. Reply expert reports were served on March 30, 2021. Both parties filed dispositive and Daubert motions on April 27, 2021.

Trial is scheduled for September 27-30, 2021.

2. Other

(A) Employee Dispute

On September 25, 2020, the Company received a demand letter from a former employee, alleging a series of employment-related claims against the Company after the employee was laid off as part of a company restructuring. The employee alleges she was harassed and, ultimately, terminated in retaliation for taking intermittent leave, under the Family and Medical Leave Act. No lawsuit has been filed to date. The Company believes these claims are without merit and is seeking to amicably resolve the matter pre-lawsuit. The Company does not anticipate that the ultimate resolution of this matter will be material to the Company’s operations, financial condition or cash flows.

(B) Rejuvenation Therapeutics

On September 15, 2020, the Company received a letter from a customer, Rejuvenation Therapeutics Corp. (“Rejuvenation”), and has received subsequent correspondence, requesting a full refund of approximately $1.6 million of NIAGEN® it purchased, alleging breaches of the supply agreement between the parties. The Company believes these claims are without merit and is seeking to amicably resolve the matter pre-lawsuit. As of March 31, 2021, the Company has recorded a return liability of approximately $0.5 million, which the Company has offered to settle in good faith. The Company does not anticipate that the ultimate resolution of this matter will be material to the Company’s operations, financial condition or cash flows.

(C) Thorne Research, Inc.

On or around September 28, 2020, Thorne Research, Inc. (“Thorne”) provided notice to ChromaDex, Inc. that it intended to terminate its March 25, 2019 Supply Agreement and subsequent amendments with ChromaDex, Inc., effective as of December 31, 2020. A discussion between ChromaDex, Inc. and Thorne followed, and Thorne asserted that it could challenge the ‘086 Patent in an inter partes review (“IPR”) proceeding on the basis of prior art, but would be willing to enter into a mutual existence agreement that would permit Thorne to source NR from a third party. Thorne did not offer substantive information supporting a prior art claim or about the nature of the threatened IPR.

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On December 1, 2020, Thorne filed a petition for IPR of the ‘086 Patent. Dartmouth’s preliminary response to the petition was filed on on March 15, 2021. On February 1, 2021, Thorne filed a petition for IPR of the ‘807 Patent. Dartmouth’s preliminary response to the petition is due on May 18, 2021.

From time to time we are involved in legal proceedings arising in the ordinary course of our business. We believe that there is no other litigation pending that is likely to have, individually or in the aggregate, a material adverse effect on our financial condition or results of operations.

Contingencies

(A) In September 2019, the Company received a letter from a licensor stating that the Company owed the licensor $1.6 million plus interest of sublicense fees as a result of the Company entering into the supply agreement with a customer. After reviewing the relevant facts and circumstances, the Company believes that the Company does not owe any sublicense fees to the licensor and has corresponded with the licensor to resolve the matter. The Company does not believe that the ultimate resolution of this matter will be material to the Company’s results of operations, financial condition or cash flows.

(B) On November 17, 2020, the Company received a warning letter (“the Letter”) from the United States Food and Drug Administration (“FDA”) and Federal Trade Commission (“FTC”). The Letter references statements issued by the Company relating to preclinical and clinical research results involving nicotinamide riboside and COVID-19. The statements were included in press releases and referenced in social media posts.

On November 18, 2020, the Company provided a response to the Letter stating that the Company disagrees with the assertion in the Letter that the Company’s products are intended to mitigate, prevent, treat, diagnose or cure COVID-19 in violation of certain sections of the FD&C Act or that they were unsubstantiated under the FTC Act, but rather accurately reflected the  state of the science and the results of scientific research. Nonetheless, the Company also responded that it had deleted social media references to the studies and removed related press releases from its website.

On April 30, 2021, the Company received an additional warning letter (the “Second Letter”) from only the FTC.  The Second Letter references the original Letter, and cites additional statements issued by the Company and certain officers and advisors of the Company relating to nicotinamide riboside and scientific studies related to COVID-19.  The Second Letter asserts that such statements contain coronavirus-related prevention or treatment claims and are deceptive in violation of the Federal Trade Commission Act.

On May 4, 2021, the Company provided a response to the Second Letter stating that it had removed the social posts from its accounts identified in the Second Letter and requested that third parties remove the post from their accounts that were identified in the Second Letter. The Company stated that the press release identified in the Second Letter is appropriate and not a deceptive act or practice under applicable law. The Company affirmed its belief in the need to accurately report on the scientific results of its studies to its investors, and welcomed the opportunity to discuss its R&D program with the FTC, and receive guidance on future releases.

The Company does not believe that the ultimate resolution of this matter will be material to the Company’s results of operations, financial condition or cash flows.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain statements in this Management's Discussion and Analysis (“MD&A”), other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “would,” “expect,” “intend,” “could,” “estimate,” “should,” “anticipate,” or “believe,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. Readers should carefully review the risk factors and related notes set forth below in Part II, Item 1A, “Risk Factors” and included under Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission on March 12, 2021 (our “Annual Report”).

The following MD&A is intended to help readers understand the results of our operation and financial condition, and is provided as a supplement to, and should be read in conjunction with, our Interim Unaudited Financial Statements and the accompanying Notes to Interim Unaudited Financial Statements under Part 1, Item 1 of this Quarterly Report on Form 10-Q.

Growth and percentage comparisons made herein generally refer to the three months ended March 31, 2021 compared with the three months ended March 31, 2020 unless otherwise noted. Unless otherwise indicated or unless the context otherwise requires, all references in this document to “we,” “us,” “our,” the “Company,” “ChromaDex” and similar expressions refer to ChromaDex Corporation, and depending on the context, its 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 2021, 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 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.

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ChromaDex is among the world leaders in the emerging NAD+ space. ChromaDex has amassed more than 225 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.

Impact of COVID-19

The COVID-19 pandemic continues to drive global uncertainty and disruption, which has created headwinds for our business. Our ecommerce business continues to perform relatively well in this challenging environment.

Our 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.

Global supply chains continue to be impacted by COVID-19, including challenges with transportation, logistics and production lead-times.  In the first quarter of 2021, we experienced delays due to global packaging shortages for our consumer products across our supply chain.  These have been 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 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.

Financial Condition and Results of Operations

The discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The preparation of these financial statements requires making estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported revenues, if any, and expenses during the reporting periods. On an ongoing basis, we evaluate such estimates and judgments, including those described in greater detail below. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

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On February 20, 2021, the Company entered into a Securities Purchase Agreement with EverFund pursuant to which the Company agreed to sell and issue approximately 3.8 million shares of common stock at a purchase price of $6.50 per share (the “financing”). On February 23, 2021, the Company closed the Financing and received proceeds of $24.9 million, net of offering costs.

In June 2020, the Company entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley FBR, Inc. (“B. Riley FBR”) and Raymond James & Associates, Inc. (“Raymond James” and together with B. Riley FBR, the “Sales Agents”) under which the Company may offer and sell shares of its common stock having an aggregate offering price of up to $50.0 million from time to time through the Sales Agents (the “ATM Facility”). As of March 31, 2021, the Company had not sold any shares of its common stock pursuant to the ATM Facility.

As of March 31, 2021, the Company had approximately $44.7 million of cash and cash equivalents on hand. We anticipate that our current cash, cash equivalents, and available line of credit up to $7.0 million from Western Alliance Bank will be sufficient to meet our projected operating plans for at least the next twelve months. We may, however, seek additional capital in the next twelve months, both to meet our projected operating plans after the next twelve months and/or to fund our longer term strategic objectives. In June 2020, we filed a $125.0 million registration statement on Form S-3 with the Commission, utilizing a “shelf” registration process. Under this shelf registration process, we may sell securities from time to time, including up to $50.0 million pursuant to the ATM Facility.

Additional capital may come from other public and/or private stock or debt offerings, borrowings under lines of credit or other sources. These additional funds may not be available on favorable terms, or at all. Further, if we issue equity or debt securities to raise additional funds, our existing stockholders may experience dilution and the new equity or debt securities we issue may have rights, preferences and privileges senior to those of our existing stockholders. In addition, if we raise additional funds through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to our products or proprietary technologies, or to grant licenses on terms that are not favorable to us. If we cannot raise funds on acceptable terms, we may not be able to develop or enhance our products, obtain the required regulatory clearances or approvals, achieve long term strategic objectives, take advantage of future opportunities, or respond to competitive pressures or unanticipated customer requirements. Any of these events could adversely affect our ability to achieve our development and commercialization goals, which could have a material and adverse effect on our business, results of operations and financial condition. Further, as a result of the COVID-19 pandemic and actions taken to slow its spread, the global credit and financial markets have experienced extreme volatility, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. If equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive.

Our net sales and net loss for the three-month periods ending on March 31, 2021 and March 31, 2020 were as follows:

	Three months ending
(In thousands)	Mar. 31, 2021			Mar. 31, 2020
Net sales	$	14,683		$	14,345
Net loss		(7,381	)		(5,902	)
Basic and diluted loss per common share	$	(0.12	)	$	(0.10	)

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Net Sales

Net sales consist of gross sales less discounts and returns.

	Three months ending
(In thousands)	Mar. 31, 2021		Mar. 31, 2020		Change
Net sales:
Consumer Products	$	12,437	$	11,144		12	%
Ingredients		1,315		2,475		-47	%
Analytical reference standards and services		931		726		28	%
Total net sales	$	14,683	$	14,345		2	%

Total net sales increased by 2% for the three-month period ended March 31, 2021, compared to the comparable period in 2020.

· The Company's TRU NIAGEN® sales for the consumer products segment continue to increase after the Company's strategic shift towards consumer products in 2017.

· The decrease in sales for the ingredients segment is largely due to decreased sales to our NIAGEN® ingredient customers. In 2021, the Company did not ship NIAGEN® to Thorne Research Inc., a former customer who filed a petition on December 1, 2020 for IPR of the ‘086 Patent which ChromaDex Inc. exclusively licenses from Dartmouth College. For more information, see Note 12, Commitments and Contingencies, Legal Proceedings of the Notes to Consolidated Financial Statements, included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

· The increase in sales for the analytical reference standards and services is largely due to increased demand from the customers. In 2020, the Company experienced lower sales of analytical reference standards due to the effects of COVID-19.

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Cost of Sales

Cost of sales include raw materials, labor, overhead, and delivery costs.

	Three months ending
	Mar. 31, 2021					Mar. 31, 2020
(In thousands)	Amount		% of net sales			Amount		% of net sales
Cost of sales:
Consumer Products	$	4,203		34	%	$	4,302		39	%
Ingredients		563		43	%		1,056		43	%
Analytical reference standards and services		683		73	%		676		93	%
Total cost of sales	$	5,449		37	%	$	6,034		42	%

Cost of sales, as a percentage of net sales, decreased by 5% for the three-month period ended March 31, 2021, compared to the comparable period in 2020.

· Cost of sales, as a percentage of net sales, for the consumer products segment decreased by 5% for the three-month period ended March 31, 2021, compared to the comparable period in 2020. Product mix, cost savings initiatives and overall scale on our supply chain drove the decrease in cost of sales.

· Cost of sales, as a percentage of net sales, for the ingredients segment was flat at 43% for the three-month period ended March 31, 2021, compared to the comparable period in 2020.

· Cost of sales, as a percentage of net sales for the analytical reference standards and services segment, decreased 20% for the three-month period ended March 31, 2021, compared to the comparable period in 2020. The increase in sales of analytical reference standards led to a higher labor and overhead utilization rate, which resulted in our cost of sales decreasing as a percentage of net sales.

Gross Profit

Gross profit is net sales less the cost of sales and is affected by a number of factors including business and product mix, competitive pricing and costs of products, labor, overhead, services and delivery.

	Three months ending
(In thousands)	Mar. 31, 2021		Mar. 31, 2020		Change
Gross profit:
Consumer Products	$	8,234	$	6,842		20	%
Ingredients		752		1,419		-47	%
Analytical reference standards and services		248		50		396	%
Total gross profit	$	9,234	$	8,311		11	%

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· The consumer products segment posted gross profit of $8.2 million for the three-month period ending March 31, 2021, an increase of 20% compared to the comparable period in 2020. The increased gross profit was due to higher sales, product mix, cost savings initiatives and scale on our supply chain operations.

· The ingredients segment posted gross profit of $0.8 million for the three-month period ending March 31, 2021, a decrease of 47% compared to the comparable period in 2020. The decreased gross profit for the ingredients segment was largely due to lower sales.

· The increased gross profit for the analytical reference standards and services segment was largely due to the increased sales. Fixed supply chain labor and overhead costs make up a substantial portion of the costs and these fixed labor and overhead costs did not increase in proportion to sales, yielding higher profit margin.

Operating Expenses-Sales and Marketing

Sales and marketing expenses consist of salaries, advertising, public relations and marketing expenses.

	Three months ending
(In thousands)	Mar. 31, 2021		Mar. 31, 2020			Change
Sales and marketing expenses:
Consumer Products	$	6,111	$	4,409			39	%
Ingredients		10		(84	)		-112	%
Analytical reference standards and services		137		122			12	%
Total sales and marketing expenses	$	6,258	$	4,447			41	%

· For the consumer products segment, the increase during the three-month period ended March 31, 2021 is largely due to direct marketing expenses associated with social media, public relations and other customer awareness and acquisition programs, as well as increased staffing.

· For the ingredients segment, selling and marketing expenses were approximately $10,000 during the three-month period ended March 31, 2021. During the first quarter of 2020, we reversed approximately $114,000 of certain accrued commission expense, as we were no longer obligated to pay the commission.

· For the analytical reference standards and services segment, the selling and marketing expenses increased by 12% during the three-month period ended March 31, 2021. During the three-month period ended March 31, 2021, we increased our sales and marketing efforts to increase the sales of our analytical reference standards business.

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Operating Expenses-Research and Development

Research and development expenses consist primarily of clinical trials, regulatory approvals, product development and process development expenses.

	Three months ending
(In thousands)	Mar. 31, 2021		Mar. 31, 2020		Change
Research and development expenses:
Consumer Products	$	751	$	782		-4	%
Ingredients		73		137		-47	%
Total research and development expenses	$	824	$	919		-10	%

· We allocate the research and development expenses related to our NIAGEN® branded ingredient to the consumer products and ingredients segment, based on revenues recorded. Overall, we decreased our research and development efforts during the three-month period ended March 31, 2021 largely due to the timing of projects as we evaluate and realign the priorities of our ongoing research and development efforts of our flagship ingredient, NIAGEN® nicotinamide riboside.

Operating Expenses-General and Administrative

General and administrative expenses consist of general company administration, legal, royalties, IT, accounting and executive management expenses.

	Three months ending
(In thousands)	Mar. 31, 2021		Mar. 31, 2020		Change
General and administrative	$	9,514	$	8,835		8	%

· The increase in general and administrative expenses for the three-month period ended March 31, 2021, compared to the comparable period in 2020 was largely due to an increase in legal expenses. Our legal expenses increased to approximately $5.0 million in the three-month period ended March 31, 2021, compared to approximately $2.4 million in the comparable period in 2020 due to higher ligation-related expenses.

· For the three-month period ended March 31, 2021, we did not incur significant severance and restructuring expenses while we incurred approximately $1.0 million in the comparable period in 2020.

· For the three-month period ended March 31, 2021, our share-based compensation expense recorded as general and administrative expense was $0.7 million compared to $1.5 million in the comparable period in 2020.

Income Taxes

Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. At March 31, 2021 and March 31, 2020, we maintained a full valuation allowance against the entire deferred income tax balance which resulted in an effective tax rate of approximately 0% for the three-month periods ended March 31, 2021, and March 31, 2020, respectively. As defined in ASC 740, Income Taxes, future realization of the tax benefit will depend on the existence of sufficient taxable income, including the expectation of continued future taxable income.

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Depreciation and Amortization

Depreciation expense for the three-month period ended March 31, 2021 was approximately $0.2 million as compared to $0.2 million for the three-month period ended March 31, 2020. We depreciate our assets on a straight-line basis, based on the estimated useful lives of the respective assets.

Amortization expense of intangible assets for the three-month period ended March 31, 2021 was approximately $0.1 million as compared to $0.1 million for the three-month period ended March 31, 2020. We amortize intangible assets using a straight-line method, generally over 10 years. For licensed patent rights, the useful lives are 10 years or the remaining term of the patents underlying licensing rights, whichever is shorter. The useful lives of subsequent milestone payments that are capitalized are the remaining useful life of the initial licensing payment that was capitalized.

Amortization expense of right of use assets for the three-month period ended March 31, 2021 was approximately $0.1 million as compared to $0.1 million for the three-month period ended March 31, 2020.

Liquidity and Capital Resources

From inception through March 31, 2021, we have incurred aggregate losses of approximately $149.2 million. These losses are primarily due to expenses associated with the development and expansion of our operations and investments to protect our intellectual property, including litigation-related expenses. These operations have been financed through capital contributions, the issuance of common stock and warrants through private placements, and the issuance of debt.

Our board of directors periodically reviews our capital requirements in light of our proposed business plan. Our future capital requirements will remain dependent upon a variety of factors, including cash flow from operations, the ability to increase sales, increasing our gross profits from current levels, reducing selling and administrative expenses as a percentage of net sales, continued development of customer relationships, and our ability to market our new products successfully. However, based on our results from operations, we may determine that we need additional financing to implement our business plan. There can be no assurance that any such financing will be available on terms favorable to us or at all. Without adequate financing we may have to delay or terminate product and service expansion and curtail certain selling, general and administrative expenses. Any inability to raise additional financing would have a material adverse effect on us.

Pursuant to the Financing, on February 23, 2021 we received proceeds of $24.9 million, net of offering costs.

While we anticipate that our current cash, cash equivalents, and available line of credit up to $7.0 million from Western Alliance Bank will be sufficient to meet our projected operating plans for at least the next twelve months, we may seek additional funds, either through additional equity or debt financings or collaborative agreements or from other sources. In June 2020, we filed a $125.0 million registration statement on Form S-3 with the Commission, utilizing a “shelf” registration process. Under this shelf registration process, we may sell securities from time to time, including up to $50.0 million pursuant to the ATM Facility.

As a result of the COVID-19 pandemic and actions taken to slow its spread, the global credit and financial markets have experienced extreme volatility, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. If equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive.

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Net cash used in operating activities

Net cash used in operating activities for the three months ended March 31, 2021 was approximately $5.4 million as compared to approximately $5.2 million for the three months ended March 31, 2020. Along with the net loss, an increase in trade receivables and an increase in inventories were the largest uses of cash during the three-month period ended March 31, 2021, partially offset by an increase in accounts payable, an increase in accrued expenses and noncash share-based compensation expense. Net cash used in operating activities for the three months ended March 31, 2020 largely reflects the net loss, a decrease in allowance for doubtful trade receivables and a decrease in accounts payable, partially offset by a decrease in trade receivables and noncash share-based compensation expense.

We expect our operating cash flows to fluctuate significantly in future periods as a result of fluctuations in our operating results, shipment timetables, trade receivable collections, inventory management, and the timing of our payments, among other factors.

Net cash used in investing activities

Net cash used in investing activities was approximately $46,000 for the three months ended March 31, 2021, compared to approximately $20,000 for the three months ended March 31, 2020. Net cash used in investing activities for the three months ended March 31, 2021 mainly consisted of purchases of leasehold improvements and equipment. Net cash used in investing activities for the three months ended March 31, 2020 consisted of purchases of leasehold improvements and equipment and investment in other long-term assets.

Net cash provided by financing activities

Net cash provided by financing activities was approximately $33.4 million for the three months ended March 31, 2021, compared to approximately $37,000 for the three months ended March 31, 2020. Net cash provided by financing activities for the three months ended March 31, 2021 primarily consisted of proceeds from the issuance of common stock pursuant to the Financing and the exercise of stock options. Net cash provided by financing activities for the three months ended March 31, 2020 consisted of proceeds from the exercise of stock options, partially offset by principal payments on finance leases.

Contractual Obligations and Commitments

During the three months ended March 31, 2021, there were no material changes outside of the ordinary course of business in the specified contractual obligations disclosed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as contained in our Annual Report, other than as disclosed in “Item 1 Financial Statements” of this Quarterly Report on Form 10-Q.

Off-Balance Sheet Arrangements

During the three months ended March 31, 2021, we had no material off-balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, with the supervision of our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Quarterly Report on Form 10-Q. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Based on our evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2021, our disclosure controls and procedures were not effective as a result of the material weakness in our internal control over financial reporting discussed below.

The material weakness in internal control over financial reporting resulted from a deficiency in our disclosure controls and procedures which could have resulted in the Company not disclosing a material potential loss requiring a qualitative disclosure and recording a liability in consolidated financial statements under ASC 450 - Contingencies. Specifically, the Company failed to disclose in its Quarterly Report on Form 10-Q for the period ended September 30, 2020 that the Company received a letter in September 2020 from a customer requesting a full refund of approximately $1.6 million of NIAGEN® it purchased, alleging breaches of the supply agreement between the parties, and failed to record a liability in its financial statements for such quarter.

The Company is still in the process of analyzing and addressing the material weakness. The material weakness will not be considered remediated until the applicable remedial control operates for a sufficient period of time and management has concluded, through testing, that this control is operating effectively. We expect that the remediation of this material weakness will be completed prior to the end of year 2021.

Our Chief Executive Officer and Chief Financial Officer believe that, notwithstanding the material weakness discussed above, the condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented.

Changes in Internal Control over Financial Reporting

An evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of any change in our internal control over financial reporting (as defined in Rule 13a−15(f) promulgated under the Exchange Act) that occurred during our last fiscal quarter and that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Other than addressing the material weakness as discussed above, there were no changes in internal control over financial reporting that occurred during the Company’s first fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings

For a description of our legal proceedings, see Note 12, Commitments and Contingencies, Legal Proceedings of the Notes to Consolidated Financial Statements, included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Item 1A. RISK FACTORS

Investing in our common stock involves a high degree of risk. Current investors and potential investors should consider carefully the risks and uncertainties described below and in our Annual Report, together with all other information contained in this Quarterly Report on Form 10-Q and our Annual Report, including our financial statements, the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” before making investment decisions with respect to our common stock. If any of the following risks actually occur, our business, financial condition, results of operations and future growth prospects would likely be materially and adversely affected. Under these circumstances, the trading price and value of our common stock could decline, and you may lose all or part of your investment. The risks and uncertainties described in this Quarterly Report on Form 10-Q and in our Annual Report are not the only ones facing our Company. Additional risks and uncertainties of which we are not presently aware, or that we currently consider immaterial, may also impair our business operations. The risk factors set forth below that are marked with an asterisk (*) contain changes to the similarly titled risk factors included in Part I, Item 1A of our Annual Report.

Risks Related to our Company and our Business

*The COVID-19 pandemic has adversely affected, and is expected to continue to pose risks to our business, results of operations, financial condition and cash flows, and other epidemics or outbreaks of infectious diseases may have a similar impact.

As previously disclosed, we face risks related to the ongoing COVID-19 pandemic. COVID-19 has spread across the globe since 2020 and is impacting economic activity worldwide. COVID-19 has caused disruption and volatility in the global capital markets, and has caused an economic slowdown. The COVID-19 pandemic and its associated economic uncertainty may negatively impact our sales volumes in 2021. In response to COVID-19, national and local governments around the world have instituted certain measures, including travel bans, prohibitions on group events and gatherings, shutdowns of certain businesses, curfews, shelter-in-place orders and recommendations to practice social distancing. The duration of these measures is unknown, may be extended and additional measures may be imposed.

Among the potential effects of COVID-19 include, but are not limited to, the following:

· Reduced consumer and investor confidence, instability in the credit and financial markets, volatile corporate profits, and reduced business and consumer spending, which may adversely affect our results of operations by reducing our sales, margins and/or net income as a result of a slowdown in customer orders.

· Reduced demand for our products due to store closures and reduced operating hours of our customers.

· Disruptions in supply chain, leading to inadequate levels of inventory that may lower our sales.

For example, our retail business, including sales to A.S. Watson group and other partners in international markets, has been impacted by the effects of COVID-19, due to store closures and reduced operating hours.

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To the extent the COVID-19 pandemic adversely affects our business, results of operations, financial condition and cash flows, it may also heighten many of the other risks described in this section. The ultimate impact of COVID-19 on our business, results of operations, financial condition and cash flows is dependent on future developments, including the duration of the pandemic and the related length of its impact on the global economy, which are uncertain and cannot be predicted at this time.

*We have a history of operating losses, may need additional financing to meet our future long-term capital requirements and may be unable to raise sufficient capital on favorable terms or at all.

We have recorded a net loss of approximately $7.4 million for the three months ended March 31, 2021 and we have a history of losses and may continue to incur operating and net losses for the foreseeable future. We incurred net losses of approximately $19.9 million and $32.1 million for the years ended December 31, 2020 and December 31, 2019, respectively. As of March 31, 2021, our accumulated deficit was approximately $149.2 million. We have not achieved profitability on an annual basis. We may not be able to reach a level of revenue to continue to achieve and sustain profitability. If our revenues grow slower than anticipated, or if operating expenses exceed expectations, then we may not be able to achieve and sustain profitability in the near future or at all, which may depress our stock price.

As of March 31, 2021, our cash and cash equivalents totaled approximately $44.7 million. While we anticipate that our current cash, cash equivalents, cash to be generated from operations and available line of credit up to $7.0 million from Western Alliance Bank will be sufficient to meet our projected operating plans through at least the next twelve months, we may require additional funds, either through additional equity or debt financings, including pursuant to the At Market Issuance Sales Agreement, dated as of June 12, 2020, with B. Riley FBR, Inc. and Raymond James & Associates, Inc. (the “ATM Facility”), or collaborative agreements or from other sources. We have no commitments to obtain such additional financing, and we may not be able to obtain any such additional financing on terms favorable to us, or at all. Further, as a result of the COVID-19 pandemic and actions taken to slow its spread, the global credit and financial markets have experienced extreme volatility, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. There can be no assurance that further deterioration in credit and financial markets and confidence in economic conditions will not occur. If equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult to obtain, more costly and/or more dilutive. If adequate financing is not available, the Company will further delay, postpone or terminate product and service expansion and curtail certain selling, general and administrative operations. The inability to raise additional financing may have a material adverse effect on the future performance of the Company.

Our capital requirements will depend on many factors.

Our capital requirements will depend on many factors, including:

• the revenues generated by sales of our products; 

• the costs associated with expanding our sales and marketing efforts, including efforts to hire independent agents and sales representatives and obtain required regulatory approvals and clearances; 

• the expenses we incur in developing and commercializing our products, including the cost of obtaining and maintaining regulatory approvals; and 

• unanticipated general and administrative expenses, including expenses involved with our ongoing litigation with Elysium.

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Because of these factors, we may seek to raise additional capital within the next twelve months both to meet our projected operating plans after the next twelve months and to fund our longer term strategic objectives. Additional capital may come from public and private equity or debt offerings, borrowings under lines of credit or other sources. These additional funds may not be available on favorable terms, or at all. There can be no assurance we will be successful in raising these additional funds. Furthermore, if we issue equity or debt securities to raise additional funds, our existing stockholders may experience dilution and the new equity or debt securities we issue may have rights, preferences and privileges senior to those of our existing stockholders. In addition, if we raise additional funds through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to our products or proprietary technologies, or grant licenses on terms that are not favorable to us. If we cannot raise funds on acceptable terms, we may not be able to develop or enhance our products, obtain the required regulatory clearances or approvals, execute our business plan, take advantage of future opportunities, or respond to competitive pressures or unanticipated customer requirements. Any of these events could adversely affect our ability to achieve our development and commercialization goals, which could have a material and adverse effect on our business, results of operations and financial condition.

Our ability to protect our intellectual property and proprietary technology through patents and other means is uncertain and may be inadequate, which would have a material and adverse effect on us.

Our success depends significantly on our ability to protect our proprietary rights to the technologies used in our products. We rely on patent protection, as well as a combination of copyright, trade secret and trademark laws and nondisclosure, confidentiality and other contractual restrictions to protect our proprietary technology, including our licensed technology. However, these legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep any competitive advantage. For example, our pending United States and foreign patent applications may not issue as patents in a form that will be advantageous to us or may issue and be subsequently successfully challenged by others and invalidated. In addition, our pending patent applications include claims to material aspects of our products and procedures that are not currently protected by issued patents. Both the patent application process and the process of managing patent disputes can be time consuming and expensive. Competitors may be able to design around our patents or develop products which provide outcomes which are comparable or even superior to ours. Steps that we have taken to protect our intellectual property and proprietary technology, including entering into confidentiality agreements and intellectual property assignment agreements with some of our officers, employees, consultants and advisors, may not provide us with meaningful protection for our trade secrets or other proprietary information in the event of unauthorized use or disclosure or other breaches of the agreements. Furthermore, the laws of foreign countries may not protect our intellectual property rights to the same extent as do the laws of the United States.

In the event a competitor infringes our licensed or pending patent or other intellectual property rights, enforcing those rights may be costly, uncertain, difficult and time consuming. Even if successful, litigation to enforce our intellectual property rights or to defend our patents against challenge could be expensive and time consuming and could divert our management’s attention. We may not have sufficient resources to enforce our intellectual property rights or to defend our patents rights against a challenge. The failure to obtain patents and/or protect our intellectual property rights could have a material and adverse effect on our business, results of operations and financial condition.

Our patents and licenses may be subject to challenge on validity grounds, and our patent applications may be rejected.

We rely on our patents, patent applications, licenses and other intellectual property rights to give us a competitive advantage. Whether a patent is valid, or whether a patent application should be granted, is a complex matter of science and law, and therefore we cannot be certain that, if challenged, our patents, patent applications and/or other intellectual property rights would be upheld. If one or more of those patents, patent applications, licenses and other intellectual property rights are invalidated, rejected or found unenforceable, that could reduce or eliminate any competitive advantage we might otherwise have had.

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We may become subject to claims of infringement or misappropriation of the intellectual property rights of others, which could prohibit us from developing our products, require us to obtain licenses from third parties or to develop non-infringing alternatives and subject us to substantial monetary damages.

Third parties could, in the future, assert infringement or misappropriation claims against us with respect to products we develop. Whether a product infringes a patent or misappropriates other intellectual property involves complex legal and factual issues, the determination of which is often uncertain. Therefore, we cannot be certain that we have not infringed the intellectual property rights of others. There may be third-party patents or patent applications with claims to materials, formulations, methods of manufacture or methods for use related to the use or manufacture of our products, and our potential competitors may assert that some aspect of our product infringes their patents. Because patent applications may take years to issue, there also may be applications now pending of which we are unaware that may later result in issued patents upon which our products could infringe. There also may be existing patents or pending patent applications of which we are unaware upon which our products may inadvertently infringe.

Any infringement or misappropriation claim could cause us to incur significant costs, place significant strain on our financial resources, divert management’s attention from our business and harm our reputation. If the relevant patents in such claim were upheld as valid and enforceable and we were found to infringe them, we could be prohibited from manufacturing or selling any product that is found to infringe unless we could obtain licenses to use the technology covered by the patent or are able to design around the patent. We may be unable to obtain such a license on terms acceptable to us, if at all, and we may not be able to redesign our products to avoid infringement, which could materially impact our revenue. A court could also order us to pay compensatory damages for such infringement, plus prejudgment interest and could, in addition, treble the compensatory damages and award attorney fees. These damages could be substantial and could harm our reputation, business, financial condition and operating results. A court also could enter orders that temporarily, preliminarily or permanently enjoin us and our customers from making, using, or selling products, and could enter an order mandating that we undertake certain remedial activities. Depending on the nature of the relief ordered by the court, we could become liable for additional damages to third parties.

The prosecution and enforcement of patents licensed to us by third parties are not within our control. Without these technologies, our products may not be successful and our business would be harmed if the patents were infringed on or misappropriated without action by such third parties.

We have obtained licenses from third parties for patents and patent application rights related to the products we are developing, allowing us to use intellectual property rights owned by or licensed to these third parties. We do not control the maintenance, prosecution, enforcement or strategy for many of these patents or patent application rights and as such are dependent in part on the owners of the intellectual property rights to maintain their viability. If any third-party licensor is unable to successfully maintain, prosecute or enforce the licensed patents and/or patent application rights related to our products, we may become subject to infringement or misappropriate claims or lose our competitive advantage. Without access to these technologies or suitable design-around or alternative technology options, our ability to conduct our business could be impaired significantly.

*We are currently engaged in substantial and complex litigation with Elysium Health, Inc. and Elysium Health LLC (collectively, "Elysium"), the outcome of which could materially harm our business and financial results.

The litigation includes multiple complaints and counterclaims by us and Elysium in venues in California and New York, as well as a patent infringement complaint filed by the Company and Trustees of Dartmouth College. For further details on this litigation, please refer to Part II, Item 1 of this Quarterly Report on Form 10-Q.

The litigation is substantial and complex, and it has caused and could continue to cause us to incur significant costs, as well as distract our management over an extended period. The litigation may substantially disrupt our business and we cannot assure you that we will be able to resolve the litigation on terms favorable to us. If we are unsuccessful in resolving the litigation on favorable terms to us, we may be forced to pay compensatory and punitive damages and restitution for any royalty payments that we received from Elysium, which payments could materially harm our business, or be subject to other remedies, including injunctive relief. We cannot predict the outcome of our litigation with Elysium, which could have any of the results described above or other results that could materially adversely affect our business.

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*Interruptions in our relationships or declines in our business with major customers could materially harm our business and financial results.

A.S. Watson Group accounted for approximately 11% of our sales during the quarter ended March 31, 2021. Any interruption in our relationship or decline in our business with this customer or other customers upon whom we become highly dependent could cause harm to our business. Factors that could influence our relationship with our customers upon whom we may become highly dependent include:

• our ability to maintain our products at prices that are competitive with those of our competitors;

• our ability to maintain quality levels for our products sufficient to meet the expectations of our customers;

• our ability to produce, ship and deliver a sufficient quantity of our products in a timely manner to meet the needs of our customers;

• our ability to continue to develop and launch new products that our customers feel meet their needs and requirements, with respect to cost, timeliness, features, performance and other factors;

• our ability to provide timely, responsive and accurate customer support to our customers; and

• the ability of our customers to effectively deliver, market and increase sales of their own products based on ours.

Our future success largely depends on sales of our TRU NIAGEN® product.

In connection with our strategic shift from an ingredient and testing company to a consumer-focused company, we expect to generate a significant percentage of our future revenue from sales of our TRU NIAGEN® product. As a result, the market acceptance of TRU NIAGEN® is critical to our continued success, and if we are unable to expand market acceptance of TRU NIAGEN®, our business, results of operations, financial condition, liquidity and growth prospects would be materially adversely affected.

Our TRU NIAGEN® products are not approved by the United States Food and Drug Administration or any foreign regulatory authority to mitigate, prevent, treat, diagnose or cure COVID-19 or any other disease or condition.

In November 2020, we received a warning letter (the “Letter”) from the FDA and Federal Trade Commission (“FTC”) and in April 2021 we received an additional warning letter from only the FTC. For more information, see Note 12, Commitments and Contingencies, Contingencies of the Notes to Consolidated Financial Statements, included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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Our TRU NIAGEN® products are not approved by the FDA or any foreign regulatory authority to mitigate, prevent, treat, diagnose or cure COVID-19 or any other disease or condition, and are not intended for such use, and may never be approved for such use by the FDA or any foreign regulatory authority.

Decline in the state of the global economy and financial market conditions could adversely affect our ability to conduct business and our results of operations.

Global economic and financial market conditions, including disruptions in the credit markets and the impact of the global economic deterioration may materially impact our customers and other parties with whom we do business. For example, the COVID-19 pandemic and actions taken to slow its spread, have caused the global credit and financial markets to experience extreme volatility, including diminished liquidity and credit availability, declines in consumer confidence, declines in economic growth, increases in unemployment rates and uncertainty about economic stability. These conditions could negatively affect our future sales of our ingredient lines as many consumers consider the purchase of nutritional products discretionary. Decline in general economic and financial market conditions could materially adversely affect our financial condition and results of operations. Specifically, the impact of these volatile and negative conditions may include decreased demand for our products and services, a decrease in our ability to accurately forecast future product trends and demand, and a negative impact on our ability to timely collect receivables from our customers. The foregoing economic conditions may lead to increased levels of bankruptcies, restructurings and liquidations for our customers, scaling back of research and development expenditures, delays in planned projects and shifts in business strategies for many of our customers. Such events could, in turn, adversely affect our business through loss of sales.

We may need to increase the size of our organization, and we can provide no assurance that we will successfully expand operations or manage growth effectively.

Our significant increase in the scope and the scale of our product launches, including the hiring of additional personnel, has resulted in significantly higher operating expenses. As a result, we anticipate that our operating expenses will continue to increase. Expansion of our operations may also cause a significant demand on our management, finances and other resources. Our ability to manage the anticipated future growth, should it occur, will depend upon a significant expansion of our accounting and other internal management systems and the implementation and subsequent improvement of a variety of systems, procedures and controls. There can be no assurance that significant problems in these areas will not occur. Any failure to expand these areas and implement and improve such systems, procedures and controls in an efficient manner at a pace consistent with our business could have a material adverse effect on our business, financial condition and results of operations. There can be no assurance that our attempts to expand our marketing, sales, manufacturing and customer support efforts will be successful or will result in additional sales or profitability in any future period. As a result of the expansion of our operations and the anticipated increase in our operating expenses, as well as the difficulty in forecasting revenue levels, we expect to continue to experience significant fluctuations in our results of operations.

Changes in our business strategy, including entering the consumer product market, or restructuring of our businesses may increase our costs or otherwise affect the profitability of our businesses.

As changes in our business environment occur we may adjust our business strategies to meet these changes or we may otherwise decide to restructure our operations or businesses or assets. In addition, external events including changing technology, changing consumer patterns and changes in macroeconomic conditions may impair the value of our assets. When these changes or events occur, we may incur costs to change our business strategy and may need to write down the value of assets. In any of these events, our costs may increase, we may have significant charges associated with the write-down of assets or returns on new investments may be lower than prior to the change in strategy or restructuring. For example, if we are not successful in developing our consumer product business, our sales may decrease and our costs may increase.

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The success of our consumer product and ingredient business is linked to the size and growth rate of the vitamin, mineral and dietary supplement market and an adverse change in the size or growth rate of that market could have a material adverse effect on us.

An adverse change in the size or growth rate of the vitamin, mineral and dietary supplement market could have a material adverse effect on our business. Underlying market conditions are subject to change based on economic conditions, consumer preferences and other factors that are beyond our control, including media attention and scientific research, which may be positive or negative.

The future growth and profitability of our consumer product business will depend in large part upon the effectiveness and efficiency of our marketing efforts and our ability to select effective markets and media in which to market and advertise.

Our consumer products business success depends on our ability to attract and retain customers, which significantly depends on our marketing practices. Our future growth and profitability will depend in large part upon the effectiveness and efficiency of our marketing efforts, including our ability to:

• create greater awareness of our brand;

• identify the most effective and efficient levels of spending in each market, media and specific media vehicle;

• determine the appropriate creative messages and media mix for advertising, marketing and promotional expenditures;

• effectively manage marketing costs (including creative and media) to maintain acceptable customer acquisition costs;

• acquire cost-effective television advertising;

• select the most effective markets, media and specific media vehicles in which to market and advertise; and

• convert consumer inquiries into actual orders.

Unfavorable publicity or consumer perception of our products and any similar products distributed by other companies could have a material adverse effect on our business.

We believe the nutritional supplement market is highly dependent upon consumer perception regarding the safety, efficacy and quality of nutritional supplements generally, as well as of products distributed specifically by us. Consumer perception of our products can be significantly influenced by scientific research or findings, regulatory investigations, litigation, national media attention and other publicity regarding the consumption of nutritional supplements. We cannot assure you that future scientific research, findings, regulatory proceedings, litigation, media attention or other favorable research findings or publicity will be favorable to the nutritional supplement market or any product, or consistent with earlier publicity. Future research reports, findings, regulatory proceedings, litigation, media attention or other publicity that are perceived as less favorable than, or that question, such earlier research reports, findings or publicity could have a material adverse effect on the demand for our products and consequently on our business, results of operations, financial condition and cash flows.

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Our dependence upon consumer perceptions means that adverse scientific research reports, findings, regulatory proceedings, litigation, media attention or other publicity, if accurate or with merit, could have a material adverse effect on the demand for our products, the availability and pricing of our ingredients, and our business, results of operations, financial condition and cash flows. Further, adverse public reports or other media attention regarding the safety, efficacy and quality of nutritional supplements in general, or our products specifically, or associating the consumption of nutritional supplements with illness, could have such a material adverse effect. Any such adverse public reports or other media attention could arise even if the adverse effects associated with such products resulted from consumers’ failure to consume such products appropriately or as directed and the content of such public reports and other media attention may be beyond our control.

We may incur material product liability claims, which could increase our costs and adversely affect our reputation, revenues and operating income.

As a consumer product and ingredient supplier we market and manufacture products designed for human and animal consumption, we are subject to product liability claims if the use of our products is alleged to have resulted in injury. Our products consist of vitamins, minerals, herbs and other ingredients that are classified as food ingredients, dietary supplements, or natural health products, and, in most cases, are not necessarily subject to pre-market regulatory approval in the United States. Some of our products contain innovative ingredients that do not have long histories of human consumption. Previously unknown adverse reactions resulting from human consumption of these ingredients could occur. In addition, the products we sell are produced by third-party manufacturers. As a marketer of products manufactured by third parties, we also may be liable for various product liability claims for products we do not manufacture. We may, in the future, be subject to various product liability claims, including, among others, that our products include inadequate instructions for use or inadequate warnings concerning possible side effects and interactions with other substances. A product liability claim against us could result in increased costs and could adversely affect our reputation with our customers, which, in turn, could have a materially adverse effect on our business, results of operations, financial condition and cash flows.

We acquire ingredients for our products from foreign suppliers, and may be negatively affected by the risks associated with international trade and importation issues.

We acquire ingredients for a number of our products from suppliers outside of the United States. Accordingly, the acquisition of these ingredients is subject to the risks generally associated with importing raw materials, including, among other factors, delays in shipments, changes in economic and political conditions, quality assurance, health epidemics affecting the region of such suppliers, including COVID-19, nonconformity to specifications or laws and regulations, tariffs, trade disputes and foreign currency fluctuations. While we have a supplier certification program and audit and inspect our suppliers’ facilities as necessary both in the United States and internationally, we cannot assure you that raw materials received from suppliers outside of the United States will conform to all specifications, laws and regulations. There have in the past been quality and safety issues in our industry with certain items imported from overseas. We may incur additional expenses and experience shipment delays due to preventative measures adopted by the U.S. governments, our suppliers and our company.

The insurance industry has become more selective in offering some types of coverage and we may not be able to obtain insurance coverage in the future.

The insurance industry has become more selective in offering some types of insurance, such as product liability, product recall, property and directors’ and officers’ liability insurance. Our current insurance program is consistent with both our past level of coverage and our risk management policies. However, we cannot assure you that we will be able to obtain comparable insurance coverage on favorable terms, or at all, in the future. Certain of our customers as well as prospective customers require that we maintain minimum levels of coverage for our products. Lack of coverage or coverage below these minimum required levels could cause these customers to materially change business terms or to cease doing business with us entirely.

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If we experience product recalls, we may incur significant and unexpected costs, and our business reputation could be adversely affected.

We may be exposed to product recalls and adverse public relations if our products are alleged to be mislabeled or to cause injury or illness, or if we are alleged to have violated governmental regulations. A product recall could result in substantial and unexpected expenditures, which would reduce operating profit and cash flow. In addition, a product recall may require significant management attention. Product recalls may hurt the value of our brands and lead to decreased demand for our products. Product recalls also may lead to increased scrutiny by federal, state or international regulatory agencies of our operations and increased litigation and could have a material adverse effect on our business, results of operations, financial condition and cash flows.

*We depend on key personnel, the loss of any of which could negatively affect our business.

We depend greatly on Frank L. Jaksch Jr., Robert N. Fried, Kevin M. Farr, Lisa H. Harrington and Fadi Karam, who are our Executive Chairman of the Board, Chief Executive Officer, Chief Financial Officer, General Counsel and Chief Marketing Officer, respectively. We also depend greatly on other key employees, including key scientific and marketing personnel. In general, only highly qualified and trained scientists have the necessary skills to develop our products and provide our services. Only marketing personnel with specific experience and knowledge in health care are able to effectively market our products. In addition, some of our manufacturing, quality control, safety and compliance, information technology, sales and e-commerce related positions are highly technical as well. We face intense competition for these professionals from our competitors, customers, marketing partners and other companies throughout the industries in which we compete. Our success will depend, in part, upon our ability to attract and retain additional skilled personnel, which will require substantial additional funds. There can be no assurance that we will be able to find and attract additional qualified employees or retain any such personnel. Our inability to hire qualified personnel, the loss of services of our key personnel, or the loss of services of executive officers or key employees that may be hired in the future may have a material and adverse effect on our business.

Our operating results may fluctuate significantly as a result of a variety of factors, many of which are outside of our control.

We are subject to the following factors, among others, that may negatively affect our operating results:

• the announcement or introduction of new products by our competitors; 

• our ability to upgrade and develop our systems and infrastructure to accommodate growth; 

• the decision by significant customers to reduce purchases; 

• disputes and litigation with competitors;

• our ability to attract and retain key personnel in a timely and cost-effective manner; 

• technical difficulties; 

• the amount and timing of operating costs and capital expenditures relating to the expansion of our business, operations and infrastructure; 

• regulation by federal, state or local governments; and 

• general economic conditions as well as economic conditions specific to the healthcare industry. 

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For example, our operating results may be harmed by the effect of the COVID-19 pandemic on global economic conditions. As a result of our limited operating history and the nature of the markets in which we compete, it is extremely difficult for us to make accurate forecasts. We have based our current and future expense levels largely on our investment plans and estimates of future events although certain of our expense levels are, to a large extent, fixed. Assuming our products reach the market, we may be unable to adjust spending in a timely manner to compensate for any unexpected revenue shortfall. Accordingly, any significant shortfall in revenues relative to our planned expenditures would have an immediate adverse effect on our business, results of operations and financial condition. Further, as a strategic response to changes in the competitive environment, we may from time to time make certain pricing, service or marketing decisions that could have a material and adverse effect on our business, results of operations and financial condition. Due to the foregoing factors, our revenues and operating results are and will remain difficult to forecast.

We face significant competition, including changes in pricing.

The markets for our products and services are both competitive and price sensitive. Many of our competitors have significant financial, operations, sales and marketing resources and experience in research and development. Competitors could develop new technologies that compete with our products and services or even render our products obsolete. If a competitor develops superior technology or cost-effective alternatives to our products and services, our business could be seriously harmed.

The markets for some of our products are also subject to specific competitive risks because these markets are highly price competitive. Our competitors have competed in the past by lowering prices on certain products. If they do so again, we may be forced to respond by lowering our prices. This would reduce sales revenues and increase losses. Failure to anticipate and respond to price competition may also impact sales and aggravate losses.

We believe that customers in our markets display a significant amount of loyalty to their supplier of a particular product. To the extent we are not the first to develop, offer and/or supply new products, customers may buy from our competitors or make materials themselves, causing our competitive position to suffer.

Many of our competitors are larger and have greater financial and other resources than we do.

Our products compete and will compete with other similar products produced by our competitors. These competitive products could be marketed by well-established, successful companies that possess greater financial, marketing, distributional, personnel and other resources than we possess. Using these resources, these companies can implement extensive advertising and promotional campaigns, both generally and in response to specific marketing efforts by competitors, and enter into new markets more rapidly to introduce new products. In certain instances, competitors with greater financial resources also may be able to enter a market in direct competition with us, offering attractive marketing tools to encourage the sale of products that compete with our products or present cost features that consumers may find attractive.

We may never develop any additional products to commercialize.

We have invested a substantial amount of our time and resources in developing various new products. Commercialization of these products will require additional development, clinical evaluation, regulatory approval, significant marketing efforts and substantial additional investment before they can provide us with any revenue. Despite our efforts, these products may not become commercially successful products for a number of reasons, including but not limited to:

• we may not be able to obtain regulatory approvals for our products, or the approved indication may be narrower than we seek; 

• our products may not prove to be safe and effective in clinical trials; 

• we may experience delays in our development program; 

• any products that are approved may not be accepted in the marketplace; 

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• we may not have adequate financial or other resources to complete the development or to commence the commercialization of our products or will not have adequate financial or other resources to achieve significant commercialization of our products; 

• we may not be able to manufacture any of our products in commercial quantities or at an acceptable cost; 

• rapid technological change may make our products obsolete; 

• we may be unable to effectively protect our intellectual property rights or we may become subject to claims that our activities have infringed the intellectual property rights of others; and 

• we may be unable to obtain or defend patent rights for our products. 

In addition, we may never achieve technical feasibility under the supply agreement with Nestec Ltd., and therefore our sales and profit expectations resulting from this agreement may be reduced.

We may not be able to partner with others for technological capabilities and new products and services.

Our ability to remain competitive may depend, in part, on our ability to continue to seek partners that can offer technological improvements and improve existing products and services that are offered to our customers. We are committed to attempting to keep pace with technological change, to stay abreast of technology changes and to look for partners that will develop new products and services for our customer base. We cannot assure prospective investors that we will be successful in finding partners or be able to continue to incorporate new developments in technology, to improve existing products and services, or to develop successful new products and services, nor can we be certain that newly developed products and services will perform satisfactorily or be widely accepted in the marketplace or that the costs involved in these efforts will not be substantial.

If we fail to maintain adequate quality standards for our products and services, our business may be adversely affected and our reputation harmed.

Dietary supplement, nutraceutical, food and beverage, functional food, analytical laboratories, pharmaceutical and cosmetic customers are often subject to rigorous quality standards to obtain and maintain regulatory approval of their products and the manufacturing processes that generate them. A failure to maintain, or, in some instances, upgrade our quality standards to meet our customers’ needs, could cause damage to our reputation and potentially substantial sales losses.

We may be subject to damages resulting from claims that we, our employees, or our independent contractors have wrongfully used or disclosed alleged trade secrets of others.

Some of our employees were previously employed at other dietary supplement, nutraceutical, food and beverage, functional food, analytical laboratories, pharmaceutical and cosmetic companies. We may also hire additional employees who are currently employed at other such companies, including our competitors. Additionally, consultants or other independent agents with which we may contract may be or have been in a contractual arrangement with one or more of our competitors. We may be subject to claims that these employees or independent contractors have used or disclosed such other party’s trade secrets or other proprietary information. Litigation may be necessary to defend against these claims. Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to our management. If we fail to defend such claims, in addition to paying monetary damages, we may lose valuable intellectual property rights or personnel. A loss of key personnel or their work product could hamper or prevent our ability to market existing or new products, which could severely harm our business.

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*Litigation may harm our business.

Substantial, complex or extended litigation could cause us to incur significant costs and distract our management. For example, lawsuits by employees, stockholders, collaborators, distributors, customers, competitors or others could be very costly and substantially disrupt our business. Disputes from time to time with such companies, organizations or individuals are not uncommon, and we cannot assure you that we will always be able to resolve such disputes or on terms favorable to us. As further described in Part II, Item 1 of this Quarterly Report on Form 10-Q, we are currently involved in substantial and complex litigation. Unexpected results could cause us to have financial exposure in these matters in excess of recorded reserves and insurance coverage, requiring us to provide additional reserves to address these liabilities, therefore impacting profits.

Our sales and results of operations for our analytical reference standards and services segment depend on our customers’ research and development efforts and their ability to obtain funding for these efforts.

Our analytical reference standards and services segment customers include researchers at pharmaceutical and biotechnology companies, chemical and related companies, academic institutions, government laboratories and private foundations. Fluctuations in the research and development budgets of these researchers and their organizations could have a significant effect on the demand for our products. Our customers determine their research and development budgets based on several factors, including the need to develop new products, the availability of governmental and other funding, competition and the general availability of resources. As we continue to expand our international operations, we expect research and development spending levels in markets outside of the United States will become increasingly important to us.

Research and development budgets fluctuate due to changes in available resources, spending priorities, general economic conditions, institutional and governmental budgetary limitations and mergers of pharmaceutical and biotechnology companies. Our business could be harmed by any significant decrease in life science and high technology research and development expenditures by our customers. In particular, a small portion of our sales has been to researchers whose funding is dependent on grants from government agencies such as the United States National Institute of Health, the National Science Foundation, the National Cancer Institute and similar agencies or organizations. Government funding of research and development is subject to the political process, which is often unpredictable. Other departments, such as Homeland Security or Defense, or general efforts to reduce the United States federal budget deficit could be viewed by the government as a higher priority. Any shift away from funding of life science and high technology research and development or delays surrounding the approval of governmental budget proposals may cause our customers to delay or forego purchases of our products and services, which could seriously damage our business.

Some of our customers receive funds from approved grants at a particular time of year, many times set by government budget cycles. In the past, such grants have been frozen for extended periods or have otherwise become unavailable to various institutions without notice. The timing of the receipt of grant funds may affect the timing of purchase decisions by our customers and, as a result, cause fluctuations in our sales and operating results.

Demand for our products and services are subject to the commercial success of our customers’ products, which may vary for reasons outside our control.

Even if we are successful in securing utilization of our products in a customer’s manufacturing process, sales of many of our products and services remain dependent on the timing and volume of the customer’s production, over which we have no control. The demand for our products depends on regulatory approvals and frequently depends on the commercial success of the customer’s supported product. Regulatory processes are complex, lengthy, expensive, and can often take years to complete.

We may bear financial risk if we underprice our contracts or overrun cost estimates.

In cases where our contracts are structured as fixed price or fee-for-service with a cap, we bear the financial risk if we initially underprice our contracts or otherwise overrun our cost estimates. Such underpricing or significant cost overruns could have a material adverse effect on our business, results of operations, financial condition and cash flows.

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We rely on single or a limited number of third-party suppliers for the raw materials required to produce our products.

Our dependence on a limited number of third-party suppliers or on a single supplier, and the challenges we may face in obtaining adequate supplies of raw materials, involve several risks, including limited control over pricing, availability, health epidemics affecting the region of such suppliers (including the coronavirus), quality and delivery schedules. We cannot be certain that our current suppliers will continue to provide us with the quantities of these raw materials that we require or satisfy our anticipated specifications and quality requirements. Due to COVID-19, there may be delays in shipments from our suppliers. Any supply interruption in limited or sole sourced raw materials could materially harm our ability to manufacture our products until a new source of supply, if any, could be identified and qualified. We may be unable to find a sufficient alternative supply channel in a reasonable time or on commercially reasonable terms. Any performance failure on the part of our suppliers could delay the development and commercialization of our products, or interrupt production of then existing products that are already marketed, which would have a material adverse effect on our business. For example, W.R. Grace & Co.-Conn. (“Grace”) is the exclusive manufacturer to us for the supply of NR. There is no guarantee that we will be able to continue to contract with Grace for the supply of NR, or that such terms will be favorable to us.

We may not be successful in acquiring complementary businesses or products on favorable terms.

As part of our business strategy, we intend to consider acquisitions of similar or complementary businesses or products. No assurance can be given that we will be successful in identifying attractive acquisition candidates or completing acquisitions on favorable terms. In addition, any future acquisitions will be accompanied by the risks commonly associated with acquisitions. These risks include potential exposure to unknown liabilities of acquired companies or to acquisition costs and expenses, the difficulty and expense of integrating the operations and personnel of the acquired companies, the potential disruption to the business of the combined company and potential diversion of our management's time and attention, the impairment of relationships with and the possible loss of key employees and clients as a result of the changes in management, the incurrence of amortization expenses and write-downs and dilution to the shareholders of the combined company if the acquisition is made for stock of the combined company. In addition, successful completion of an acquisition may depend on consents from third parties, including regulatory authorities and private parties, which consents are beyond our control. There can be no assurance that products, technologies or businesses of acquired companies will be effectively assimilated into the business or product offerings of the combined company or will have a positive effect on the combined company's revenues or earnings. Further, the combined company may incur significant expense to complete acquisitions and to support the acquired products and businesses. Any such acquisitions may be funded with cash, debt or equity, which could have the effect of diluting or otherwise adversely affecting the holdings or the rights of our existing stockholders.

If we experience a significant disruption in our information technology systems or if we fail to implement new systems and software successfully, our business could be adversely affected.

We depend on information systems throughout our company to control our manufacturing processes, process orders, manage inventory, process and bill shipments and collect cash from our customers, respond to customer inquiries, contribute to our overall internal control processes, maintain records of our property, plant and equipment, and record and pay amounts due vendors and other creditors. Due to COVID-19, most of our employees have been working remotely from home and we have depended on communication tools and remote connections to our information technology systems to conduct business virtually. If we were to experience a prolonged disruption in our information systems that involve interactions amongst employees as well as with customers and suppliers, it could result in the loss of sales and customers and/or increased costs, which could adversely affect our overall business operation.

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If we are unable to maintain sales, marketing and distribution capabilities or maintain arrangements with third parties to sell, market and distribute our products, our business may be harmed.

To achieve commercial success for our products, we must sell our product lines and/or technologies at favorable prices. In addition to being expensive, maintaining such a sales force is time-consuming. Qualified direct sales personnel with experience in the natural products industry are in high demand, and there can be no assurance that we will be able to hire or retain an effective direct sales team. Similarly, qualified independent sales representatives both within and outside the United States are in high demand, and we may not be able to build an effective network for the distribution of our product through such representatives. There can be no assurance that we will be able to enter into contracts with representatives on terms acceptable to us. Furthermore, there can be no assurance that we will be able to build an alternate distribution framework should we attempt to do so.

We may also need to contract with third parties in order to market our products. To the extent that we enter into arrangements with third parties to perform marketing and distribution services, our product revenue could be lower and our costs higher than if we directly marketed our products. Furthermore, to the extent that we enter into co-promotion or other marketing and sales arrangements with other companies, any revenue received will depend on the skills and efforts of others, and we do not know whether these efforts will be successful. If we are unable to establish and maintain adequate sales, marketing and distribution capabilities, independently or with others, we will not be able to generate product revenue, and may not become profitable.

Our business could be negatively impacted by cyber security threats.

In the ordinary course of our business, we use our data centers and our networks to store and access our proprietary business information. We face various cyber security threats, including cyber security attacks to our information technology infrastructure and attempts by others to gain access to our proprietary or sensitive information. Due to COVID-19, there may be additional cyber security threats as most of our employees work from home, utilizing network connections outside of the Company premises. Information security risks have significantly increased in recent years in part due to the proliferation of new technologies and the increased sophistication and activities of organized crime, hackers, data and related privacy breaches, terrorists and other external parties, including foreign private parties and state actors. Despite the implementation of preventative and detective security measures, our internal computer systems and those of our current and any future contractors, consultants, collaborators and third-party service providers, are vulnerable to damage or interruption from a variety of sources, including computer viruses, unauthorized access, accidental acts or omissions by those with authorized access, natural disasters, terrorism, war, telecommunication and electrical failure, and cybersecurity threats (including the deployment of harmful malware, ransomware, denial-of-service attacks, supply chain attacks, social engineering, and other means to affect service reliability and threaten the confidentiality, integrity, and availability of information). The procedures and controls we use to monitor these threats and mitigate our exposure may not be sufficient to prevent all cyber security incidents. The result of these incidents could include disrupted operations, lost opportunities, misstated financial data, liability for stolen assets or information, theft of our intellectual property, loss of data and other personally identifiable information, increased costs arising from the implementation of additional security protective measures, litigation and reputational damage. Any remedial costs or other liabilities related to cyber security incidents may not be fully insured or indemnified by other means. Additionally, some of the federal, state and foreign government requirements include obligations of companies to notify individuals of security breaches involving particular personally identifiable information, which could result from breaches experienced by us or by our vendors, contractors, or organizations with which we have formed strategic relationships. Notifications and follow-up actions related to a security breach could impact our reputation, cause us to incur significant costs, including legal expenses and remediation costs.

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Compliance with global privacy and data security requirements could result in additional costs and liabilities to us or inhibit our ability to collect and, if applicable, process data globally, and the failure to comply with such requirements could have a material adverse effect on our business, financial condition or results of operations.

The regulatory framework for the collection, use, safeguarding, sharing, transfer and other processing of information worldwide is rapidly evolving and is likely to remain uncertain for the foreseeable future. For example, the European Union’s General Data Protection Regulation (“GDPR”) imposes strict obligations on the processing of personal data, including, without limitation, personal health data, and the free movement of such data. The GDPR applies to any company established in the European Union as well as any company outside the European Union that processes personal data in connection with the offering of goods or services to individuals in the European Union or the monitoring of their behavior. The GDPR provides data protection obligations for processors and controllers of personal data, including, for example, obligations relating to: processing health and other sensitive data; obtaining consent of individuals; providing notice to individuals regarding data processing activities; responding to data subject requests; taking certain measures when engaging third-party processors; notifying data subjects and regulators of data breaches; implementing safeguards to protect the security and confidentiality of personal data; and transferring personal data to countries outside the European Union, including the U.S. The GDPR imposes fines for breaches of data protection requirements and provides other remedies for parties who suffer harm as a result of a data breach. Furthermore, the vote in the United Kingdom in favor of exiting the European Union, referred to as Brexit, has complicated data protection regulation in the United Kingdom. As of January 1, 2021, the GDPR has been converted into United Kingdom law and the United Kingdom is now a “third country” under the GDPR. The United Kingdom and European Union agreed to an extendable four-month period as of January 1, 2021 during which the United Kingdom will be treated like an European Union member state in relation to transfers of personal data to the United Kingdom. However, following the expiration of the specified period, there will be an increasing scope for divergence in application, interpretation and enforcement of the data protection law as between the United Kingdom and the European Economic Area (“EEA”). The GDPR and other changes in laws or regulations associated with the enhanced protection of certain types of sensitive data, such as healthcare data or other personal information from our clinical trials, could require us to change our business practices or lead to government enforcement actions, private litigation or significant penalties against us and could have a material adverse effect on our business, financial condition or results of operations.

Similarly, European data protection laws also generally prohibit the transfer of personal data from Europe, including the EEA, United Kingdom and Switzerland, to the United States and most other countries unless the parties to the transfer have implemented specific safeguards to protect the transferred personal data. One of the primary safeguards used for transfers of personal data from the European Union to the United States, namely, the Privacy Shield framework administered by the U.S. Department of Commerce, was recently invalidated by a decision of the European Union’s highest court. The same decision also cast doubt on the ability to use one of the primary alternatives to the Privacy Shield, namely, the European Commission’s Standard Contractual Clauses, to lawfully transfer personal data from Europe to the United States and most other countries. At present, there are few if any viable alternatives to the Privacy Shield and the Standard Contractual Clauses. To the extent that we were to rely on the EU-U.S. Privacy Shield Framework or the Standard Contractual Clauses, we will not be able to do so in the future, which could increase our costs and limit our ability to process personal data from the European Union.

Additionally, the California Consumer Privacy Act (the “CCPA”), creates new individual privacy rights for consumers and places increased privacy and security obligations on entities handling personal data of consumers. Among other things, the CCPA requires covered companies to provide new disclosures to California consumers, and provides such consumers new ways to opt-out of certain sales of personal information. The CCPA provides for penalties for violations, as well as other remedies for parties who suffer harm as a result of a data breach, which may increase data breach litigation. Moreover, effective starting on January 1, 2023, the California Privacy Rights Act (“CPRA”) will significantly modify the CCPA, including by expanding consumers’ rights with respect to certain sensitive personal information. The CPRA also creates a new state agency that will be vested with authority to implement and enforce the CCPA and the CPRA. Likewise, new legislation proposed or enacted in Illinois, Massachusetts, Nevada, New Jersey, New York, Rhode Island, Virginia, Washington and other states, imposes, or has the potential to impose, additional obligations on companies that collect, store, use, retain, disclose, transfer and otherwise process confidential, sensitive and personal information. The CCPA, CPRA and other proposed or enacted state laws may increase our compliance costs and potential liability. We expect that there will continue to be new proposed laws and regulations concerning data privacy and security, and we cannot yet determine the impact such future laws, regulations and standards may have on our business.

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*Our failure to establish and maintain effective internal control over financial reporting could result in material misstatements in our financial statements, our failure to meet our reporting obligations and cause investors to lose confidence in our reported financial information, which in turn could cause the trading price of our common stock to decline.

Maintaining effective internal control over financial reporting is necessary for us to produce reliable financial statements. Our management previously identified a material weakness in our internal control over financial reporting and concluded that the material weakness has not been remediated and our disclosure controls and procedures were not effective as of March 31, 2021. The material weakness in internal control over financial reporting resulted from a deficiency in our disclosure controls and procedures which could have resulted in us not disclosing a material potential loss requiring a qualitative disclosure and recording a liability in our consolidated financial statements under ASC 450 - Contingencies. If not remediated, or if we identify further material weaknesses in our internal controls, our failure to establish and maintain effective disclosure controls and procedures and internal control over financial reporting could result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations, each of which could have a material adverse effect on our financial condition and the trading price of our common stock.

We are subject to financial and operating covenants in our business financing agreement with Western Alliance Bank (the “Credit Agreement”) and any failure to comply with such covenants, or obtain waivers in the event of non-compliance, could limit our borrowing availability under the Credit Agreement, resulting in our being unable to borrow under the Credit Agreement and materially adversely impact our liquidity. In addition, our operations may not provide sufficient cash to meet the repayment obligations of debt incurred under the Credit Agreement.

The Credit Agreement contains affirmative and restrictive covenants, including covenants regarding delivery of financial statements, maintenance of inventory, payment of taxes, maintenance of insurance, dispositions of property, business combinations or acquisitions and incurrence of additional indebtedness, among other customary covenants, in each case subject to limited exceptions.

There can be no assurance that we will be able to comply with the financial and other covenants in the Credit Agreement, and the effects of COVID-19 may make it more difficult for us to comply with such covenants. Our failure to comply with these covenants could cause us to be unable to borrow under the Credit Agreement and may constitute an event of default which, if not cured or waived, could result in the acceleration of the maturity of any indebtedness then outstanding under the Credit Agreement, which would require us to pay all amounts then outstanding. If we are unable to repay those amounts, Western Alliance Bank could proceed against the collateral granted to them to secure that debt, which would seriously harm our business. Such an event could materially adversely affect our financial condition and liquidity. Additionally, such events of non-compliance could impact the terms of any additional borrowings and/or any credit renewal terms. Any failure to comply with such covenants may be a disclosable event and may be perceived negatively. Such perception could adversely affect the market price for our common stock and our ability to obtain financing in the future.

Risks Related to Regulatory Approval of Our Products and Other Government Regulations

We are subject to regulation by various federal, state and foreign agencies that require us to comply with a wide variety of regulations, including those regarding the manufacture of products, advertising and product label claims, the distribution of our products and environmental matters. Failure to comply with these regulations could subject us to fines, penalties and additional costs.

Some of our operations are subject to regulation by various United States federal agencies and similar state and international agencies, including the Department of Commerce, the FDA, the FTC, the Department of Transportation and the Department of Agriculture. These regulations govern a wide variety of product activities, from design and development to labeling, manufacturing, handling, sales and distribution of products. If we fail to comply with any of these regulations, we may be subject to fines or penalties, have to recall products and/or cease their manufacture and distribution, which would increase our costs and reduce our sales. As disclosed above, we received the Letter from the FDA and FTC in November 2020, and the Second Letter from the FTC in April 2021.

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We are also subject to various federal, state, local and international laws and regulations that govern the handling, transportation, manufacture, use and sale of substances that are or could be classified as toxic or hazardous substances. Some risk of environmental damage is inherent in our operations and the products we manufacture, sell, or distribute. Any failure by us to comply with the applicable government regulations could also result in product recalls or impositions of fines and restrictions on our ability to carry on with or expand in a portion or possibly all of our operations. If we fail to comply with any or all of these regulations, we may be subject to fines or penalties, have to recall products and/or cease their manufacture and distribution, which would increase our costs and reduce our sales.

Government regulations of our customer’s business are extensive and are constantly changing. Changes in these regulations can significantly affect customer demand for our products and services.

The process by which our customers’ industries are regulated is controlled by government agencies and depending on the market segment can be very expensive, time consuming, and uncertain. Changes in regulations or the enforcement practices of current regulations could have a negative impact on our customers and, in turn, our business. At this time, it is unknown how the FDA will interpret and to what extent it will enforce GMPs, and other regulations that will likely affect many of our customers. These uncertainties may have a material impact on our results of operations, as lack of enforcement or an interpretation of the regulations that lessens the burden of compliance for the dietary supplement marketplace may cause a reduced demand for our products and services.

Changes in government regulation or in practices relating to the pharmaceutical, dietary supplement, food and cosmetic industry could decrease the need for the services we provide.

Governmental agencies throughout the world, including in the United States, strictly regulate the pharmaceutical, dietary supplement, food and cosmetic industries. Changes in regulation, such as a relaxation in regulatory requirements or the introduction of simplified drug approval procedures, or an increase in regulatory requirements that we have difficulty satisfying or that make our services less competitive, could eliminate or substantially reduce the demand for our services. Also, if the government makes efforts to contain drug costs and pharmaceutical and biotechnology company profits from new drugs, our customers may spend less, or reduce their spending on research and development. If health insurers were to change their practices with respect to reimbursements for pharmaceutical products, our customers may spend less, or reduce their spending on research and development.

If we should in the future become required to obtain regulatory approval to market and sell our goods we will not be able to generate any revenues until such approval is received.

The pharmaceutical industry is subject to stringent regulation by a wide range of authorities. While we believe that, given our present business, we are not currently required to obtain regulatory approval to market our goods because, among other things, we do not (i) produce or market any clinical devices or other products, or (ii) sell any medical products or services to the customer, we cannot predict whether regulatory clearance will be required in the future and, if so, whether such clearance will at such time be obtained for any products that we are developing or may attempt to develop. Should such regulatory approval in the future be required, our goods may be suspended or may not be able to be marketed and sold in the United States until we have completed the regulatory clearance process as and if implemented by the FDA. Satisfaction of regulatory requirements typically takes many years, is dependent upon the type, complexity and novelty of the product or service and would require the expenditure of substantial resources.

If regulatory clearance of a good that we propose to propose to market and sell is granted, this clearance may be limited to those particular states and conditions for which the good is demonstrated to be safe and effective, which would limit our ability to generate revenue. We cannot ensure that any good that we develop will meet all of the applicable regulatory requirements needed to receive marketing clearance. Failure to obtain regulatory approval will prevent commercialization of our goods where such clearance is necessary. There can be no assurance that we will obtain regulatory approval of our proposed goods that may require it.

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Risks Related to the Securities Markets and Ownership of our Equity Securities

The market price of our common stock may be volatile and adversely affected by several factors.

The market price of our common stock could fluctuate significantly in response to various factors and events, including, but not limited to:

· our ability to integrate operations, technology, products and services;

· our ability to execute our business plan;

· our operating results are below expectations;

· our issuance of additional securities, including debt or equity or a combination thereof,;

· announcements of technological innovations or new products by us or our competitors;

· acceptance of and demand for our products by consumers;

· media coverage regarding our industry or us;

· litigation;

· disputes with or our inability to collect from significant customers;

· loss of any strategic relationship;

· industry developments, including, without limitation, changes in healthcare policies or practices;

· economic and other external factors, including effects of the COVID-19 pandemic;

· reductions in purchases from our large customers;

· period-to-period fluctuations in our financial results; and

· whether an active trading market in our common stock develops and is maintained.

In addition, the securities markets have from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock.

We have not paid cash dividends in the past and do not expect to pay cash dividends in the foreseeable future. Any return on investment may be limited to the value of our common stock.

We have never paid cash dividends on our capital stock and do not anticipate paying cash dividends on our capital stock in the foreseeable future. The payment of dividends on our capital stock will depend on our earnings, financial condition and other business and economic factors affecting us at such time as the board of directors may consider relevant. If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if the common stock price appreciates.

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Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.

Our federal net operating losses (“NOL”s) generated in taxable years beginning on or prior to December 31, 2017 could expire unused. Under the Tax Cuts and Jobs Act, as modified by the CARES Act, federal NOLs incurred in taxable years beginning after December 31, 2017, may be carried forward indefinitely, but the deductibility of such federal NOLs in tax years beginning after December 31, 2020, is limited to 80% of taxable income. It is uncertain if and to what extent various states will conform to the Tax Cuts and Jobs Act or the CARES Act. In addition, under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change (by value) in its equity ownership over a three-year period, the corporation’s ability to use its pre-change NOL carryforwards and other pre-change tax attributes (such as research tax credits) to offset its post-change income or taxes may be limited. We may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control. As a result, if we earn net taxable income, our ability to use our pre-ownership change NOL carryforwards to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. In addition, at the state level, there may be periods during which the use of NOLs is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed. For example, California imposed limits on the usability of California state net operating losses to offset taxable income in tax years beginning after 2019 and before 2023.

*We have a significant number of outstanding options and unvested restricted stock units. Future sales of these shares could adversely affect the market price of our common stock.

As of March 31, 2021, we had outstanding options for an aggregate of approximately 10.2 million shares of common stock at a weighted average exercise price of $4.27 per share and unvested restricted stock units of approximately 0.1 million shares. The holders may sell many of these shares in the public markets from time to time, without limitations on the timing, amount or method of sale. As and when our stock price rises, if at all, more outstanding options will be in-the-money and the holders may exercise their options and sell a large number of shares. This could cause the market price of our common stock to decline.

Our amended and restated bylaws, as amended (our “Bylaws”) provide that the Court of Chancery of the State of Delaware is the exclusive forum for certain disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our Bylaws provide that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for the following types of actions or proceedings under Delaware statutory or common law: (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors or officers to our company or our stockholders, (iii) any action asserting a claim against our company arising pursuant to any provision of the Delaware General Corporation Law or our amended and restated certificate of incorporation or Bylaws, or (iv) any action asserting a claim against our company governed by the internal affairs doctrine. This choice of forum provision does not apply to suits brought to enforce a duty or liability created by the Securities Act of 1933, as amended, or the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction.

This choice of forum provision may limit a stockholder’s ability to bring certain claims in a judicial forum that it finds favorable for disputes with us or any of our directors, officers, other employees or stockholders, which may discourage lawsuits with respect to such claims, although our stockholders will not be deemed to have waived our compliance with federal securities laws and the rules and regulations thereunder. If a court were to find this choice of forum provision to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could adversely affect our business and financial condition.

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General Risks

We may become involved in securities class action litigation that could divert management’s attention and harm our business.

The stock market in general, and the stocks of early stage companies in particular, have experienced extreme price and volume fluctuations. These fluctuations have often been unrelated or disproportionate to the operating performance of the companies involved. If these fluctuations occur in the future, the market price of our shares could fall regardless of our operating performance. In the past, following periods of volatility in the market price of a particular company’s securities, securities class action litigation has often been brought against that company. If the market price or volume of our shares suffers extreme fluctuations, then we may become involved in this type of litigation, which would be expensive and divert management’s attention and resources from managing our business.

As a public company, we may also from time to time make forward-looking statements about future operating results and provide some financial guidance to the public markets. Projections may not be made in a timely manner or we might fail to reach expected performance levels and could materially affect the price of our shares. Any failure to meet published forward-looking statements that adversely affect the stock price could result in losses to investors, stockholder lawsuits or other litigation, sanctions or restrictions issued by the Securities and Exchange Commission.

Changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition or results of operations.

New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could adversely affect our business operations and financial performance. Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us. For example, legislation enacted in 2017, informally titled the Tax Cuts and Jobs Act, enacted many significant changes to the U.S. tax laws. Future guidance from the Internal Revenue Service and other tax authorities with respect to the Tax Cuts and Jobs Act may affect us, and certain aspects of the Tax Cuts and Jobs Act could be repealed or modified in future legislation. For example, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), modified certain provisions of the Tax Cuts and Jobs Act. In addition, it is uncertain if and to what extent various states will conform to the Tax Cuts and Jobs Act, the CARES Act, or any newly enacted federal tax legislation. Changes in corporate tax rates, the realization of net deferred tax assets relating to our operations, the taxation of foreign earnings, and the deductibility of expenses under the Tax Cuts and Jobs Act or future reform legislation could have a material impact on the value of our deferred tax assets, could result in significant one-time charges, and could increase our future U.S. tax expense.

Our shares of common stock may be thinly traded, so you may be unable to sell at or near ask prices or at all.

We cannot predict the extent to which an active public market for our common stock will develop or be sustained. This situation may be attributable to a number of factors, including the fact that we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community who generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we have become more seasoned and viable. As a consequence, there may be periods of several days or weeks when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot assure you that a broader or more active public trading market for our common stock will develop or be sustained, or that current trading levels will be sustained or not diminish.

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Stockholders may experience significant dilution if future equity offerings are used to fund operations or acquire complementary businesses.

If future operations or acquisitions are financed through the issuance of additional equity securities, stockholders could experience significant dilution. Securities issued in connection with future financing activities or potential acquisitions may have rights and preferences senior to the rights and preferences of our common stock. In addition, the issuance of shares of our common stock upon the exercise of outstanding options or warrants may result in dilution to our stockholders.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On February 20, 2021, the Company entered into a Securities Purchase Agreement with EverFund (the “Financing”) pursuant to which the Company agreed to sell and issue approximately 3.8 million shares of the Company’s Common Stock, par value $0.001 per share at a price of $6.50 per share. On February 23, 2021, the Company closed the Financing and received proceeds of $24.9 million, net of offering costs. The shares issued pursuant to the Financing were not registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws. The Company relied on the exemption from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof and Rule 506 of Regulation D thereunder.

Item 3. Defaults upon Senior Securities

None.

Item 4. MINE SAFETY DISCLOSURES

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit No.	Description of Exhibits
2.1	Agreement and Plan of Merger, dated as of May 21, 2008, by and among Cody Resources, Inc., CDI Acquisition, Inc. and ChromaDex, Inc., as amended on June 10, 2008 (incorporated by reference to, and filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K (File No. 333-140056) filed with the Commission on June 24, 2008) (1)
2.2	Asset Purchase Agreement, dated as of August 21, 2017, by and among Covance Laboratories Inc., ChromaDex, Inc., ChromaDex Analytics, Inc., and ChromaDex Corporation (incorporated by reference from, and filed as Exhibit 2.2 to the Company’s Quarterly Report on Form 10-Q (File No. 001-37752) filed with the Commission on November 9, 2017)*
2.3	Amendment to Asset Purchase Agreement, dated as of September 5, 2017, by and among Covance Laboratories Inc., ChromaDex, Inc., ChromaDex Analytics, Inc., and ChromaDex Corporation (incorporated by reference from, and filed as Exhibit 2.2 to the Company’s Quarterly Report on Form 10-Q (File No. 001-37752) filed with the Commission on November 9, 2017)
3.1	Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to, and filed as Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K (File No. 001-37752) filed with the Commission on March 15, 2018)
3.2	Bylaws of the Registrant (incorporated by reference to, and filed as Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (File No. 333-140056) filed with the Commission on June 24, 2008)
3.3	Certificate of Amendment to the Amended and Restated Certificate of Incorporation of the Registrant (incorporated by reference to, and filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 000-53290) filed with the Commission on April 12, 2016)
3.4	Amendment to Bylaws of the Registrant (incorporated by reference to, and filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (File No. 001-37752) filed with the Commission on July 19, 2016)
4.1	Form of Stock Certificate representing shares of the Registrant’s Common Stock (incorporated by reference to, and filed as Exhibit 4.1 to the Registrant’s Annual Report on Form 10-K (File No. 000-53290) filed with the Commission on April 3, 2009)
4.2	Investor’s Rights Agreement, effective as of December 31, 2005, by and between The University of Mississippi Research Foundation and the Registrant (incorporated by reference to, and filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K (File No. 333-140056) filed with the Commission on June 24, 2008)
4.3	Tag-Along Agreement effective as of December 31, 2005, by and among the Registrant, Frank Louis Jaksch, Snr. & Maria Jaksch, Trustees of the Jaksch Family Trust, Margery Germain, Lauren Germain, Emily Germain, Lucie Germain, Frank Louis Jaksch, Jr., and the University of Mississippi Research Foundation (incorporated by reference to, and filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K (File No. 333-140056) filed with the Commission on June 24, 2008)

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4.4	Form of Stock Certificate representing shares of the Registrant’s Common Stock effective as of January 1, 2016 (incorporated by reference to, and filed as Exhibit 4.4 to the Registrant’s Annual Report on Form 10-K (File No. 001-37752) filed with the Commission on March 17, 2016)
4.5	Form of Stock Certificate representing shares of the Registrant’s Common Stock effective as of December 10, 2018 (incorporated by reference to, and filed as Exhibit 4.5 to the Registrant’s Annual Report on Form 10-K (File No. 001-37752) filed with the Commission on March 7, 2019)
4.6	Registration Rights Agreement, dated as of May 9, 2019, by and among the Registrant and the parties thereto (incorporated by reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on May 10, 2019)
4.7	Registration Rights Agreement, dated as of August 15, 2019, by and among the Registrant and the parties thereto (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on August 15, 2019)
4.8	Registration Rights Agreement, dated as of April 27, 2020, by and among the Registrant and the parties thereto (incorporated by reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on April 29, 2020)
4.9	Registration Rights Agreement, dated February 20, 2021, by and among the Company and the Purchaser (incorporated by reference to Exhibit 99.2 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 22, 2021)
10.1	Securities Purchase Agreement, dated February 20, 2021, by and between the Company and the Purchaser (incorporated by reference to Exhibit 99.1 to the Registrant’s Current Report on Form 8-K filed with the SEC on February 22, 2021)
10.2	Executive Employment Agreement, dated November 13, 2020, by and between Lisa H. Harrington and the Registrant❖
10.3	Consultant Agreement, dated March 15, 2021, by and between Mark Friedman and the Registrant❖
10.4	Consent to Business Financing Agreement, dated January 14, 2021, by and among Western Alliance Bank and ChromaDex Corporation❖
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(A) of the Securities Exchange Act of 1934, as amended❖
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(A) of the Securities Exchange Act of 1934, as amended❖
32.1	Certification pursuant to 18 U.S.C. Section 1350 (as adopted pursuant to Section 906 of the Sarbanes−Oxley Act of 2002)❖
101.INS	Inline XBRL Instance Document- the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

❖	Filed herewith.
(1)	Plan and related Forms were assumed by ChromaDex Corporation pursuant to Agreement and Plan of Merger, dated as of May 21, 2008, among ChromaDex Corporation (formerly Cody Resources, Inc.), CDI Acquisition, Inc. and ChromaDex, Inc.
*	This exhibit has been granted confidential treatment and has been filed separately with the Commission. The confidential portions of this exhibit have been omitted and are marked by an asterisk.

56

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	CHROMADEX CORPORATION
Date: May 6, 2021		/s/ KEVIN M. FARR
		Kevin M. Farr
		Chief Financial Officer
		(principal financial and accounting officer and duly authorized on behalf of the registrant)

57

EX-10.2

EXHIBIT 10.2

CHROMADEX CORPORATION

EXECUTIVE EMPLOYMENT AGREEMENT

  for

Lisa Hatton Harrington

This Executive Employment Agreement (this “Agreement”) is entered into as of November 13, 2020 (the “Effective Date”), by and between Lisa Hatton Harrington (“Executive”) and ChromaDex Corporation, a Delaware corporation (the “Company”).

1.Employment by the Company.  

1.1Position. Commencing on December 3, 2020, Executive shall serve as the Company’s General Counsel. During the term of Executive’s employment with the Company, Executive will devote Executive’s commercially reasonable efforts and substantially all of Executive’s business time and attention to the business of the Company, except for approved paid and unpaid time off and reasonable periods of illness or other incapacities permitted by the Company’s general employment policies and applicable law.

1.2Duties and Location. Executive shall perform such duties as are customarily associated with the position of General Counsel and such other duties, commensurate with her position, as are assigned to Executive by Mark Friedman, or the Company’s Board of Directors (the “Board”). If in the future Mark Friedman should depart from the Company, Executive shall have the title General Counsel and Corporate Secretary, and Executive shall report directly to the CEO of the Company. Executive’s primary office location shall be in the Los Angeles, California area. The Company reserves the right to reasonably require Executive to perform Executive’s duties with Company employees or representatives of third parties, and to require reasonable business travel.

1.3Policies and Procedures. The employment relationship between the parties shall be governed by the general employment policies and practices of the Company, except that when the terms of this Agreement differ from or are in conflict with the Company’s general employment policies or practices, this Agreement shall control.

2.Compensation.

2.1Base Salary. Executive will receive an initial base salary at the annual rate of three-hundred eighteen thousand dollars and 00/100 ($318,000.00) (USD) less standard payroll deductions and withholdings and payable in accordance with the Company’s regular payroll schedule. The base salary may be increased from time to time. The initial base salary, as increased or decreased, shall be referred to as “Base Salary.”

2.2Annual Bonus. In addition to base salary, Executive will be eligible to earn discretionary annual incentive compensation (the “Performance Bonus”), calculated and paid commensurate with other executive officers of the Company, but in no event to exceed forty percent (40%) of Executive’s Base Salary unless approved by the Board (or the Compensation Committee thereof). The Performance Bonus, if earned, will be paid on an annual basis, less standard payroll deductions and withholdings, after the close of the fiscal year and after determination by the Board (or the Compensation Committee thereof), but not later than April 1 of the following calendar year. No Performance Bonus amount is guaranteed and, in addition to the other conditions for earning such Performance Bonus, Executive must remain an employee in good standing of the Company (or have been terminated without Cause or have resigned for Good Reason) on the scheduled annual Performance Bonus payment date in order to earn any Performance Bonus, except as otherwise provided herein.

2.3Stock Options. Subject to the approval of the Board, the Company will grant Executive options (pursuant to the terms of the Company’s 2017 Equity Incentive Plan, as amended (the “Plan”), and applicable law) (the “Options”) to purchase two hundred and fifty thousand (250,000) shares of the Company’s common stock for an exercise price equal to the fair market value on the date of the grant subject to Executive’s Continuous Service (as defined by the Plan) on each such vesting date, except as otherwise provided herein. One-third of the shares subject to the Option shall vest on the one year anniversary of the vesting commencement date of the Option, and the remaining shares subject to the Option shall vest in a series of 24 equal monthly installments thereafter, subject to Executive’s Continuous Service (as defined in the Plan) on each such vesting date. Notwithstanding anything to the contrary set forth in the Plan or any award agreement, if the Company consummates a Change in Control (as that term is defined in the Plan) and subject to (i) Executive’s Continuous Service through the date of the consummation of the Change in Control or (ii) termination of the Executive’s Continuous Service by the Company without Cause or by the Executive for Good Reason within 90 days prior to the consummation of a Change in Control, Executive shall vest immediately prior to such Change in Control as to 100% of her otherwise unvested time based equity awards (the “Single Trigger Acceleration”), provided, however, that in exchange for the Single Trigger Acceleration, the Company may require Executive to execute and deliver to the Company a signed and dated general release of all known and unknown claims in substantially the form attached hereto as Exhibit A (the “Release”) within the applicable deadline set forth therein. The Company will register the shares subject to the Option on a Registration Statement on Form S-8 as soon as reasonably practicable after the Effective Date.

2.4Additional Stock Options. Any additional stock options, stock grants, stock units or equivalents to be granted to you will be calculated and issued commensurate with other executive officers of the Company, subject to the approval of the Compensation Committee. Notwithstanding anything the contrary contained herein, Employee may, at the Company’s sole discretion, receive additional stock options, stock grants, stock units or the equivalent on a pro-rated annual basis.

2.5 Long Term Incentive Eligibility. Executive shall be immediately eligible for full consideration of Company’s Long Term Incentive Annual Grant Framework (the “LTI Framework”). In accordance with the LTI Framework, Executive may be awarded seventy percent (70%) of her Base Salary, as adjusted by Black Sholes Calculation. For clarity, Executive is eligible to receive the first LTI Framework award in 2021.

3.Standard Company Benefits. Executive shall, in accordance with Company policy and the terms and conditions of the applicable Company benefit plan documents, be eligible to participate in the benefit and fringe benefit programs provided by the Company to its senior executive officers. Any such benefits shall be subject to the terms and conditions of the governing benefit plans and policies and may be changed by the Company in its discretion.

4.Expenses. The Company will reimburse Executive for reasonable travel, entertainment or other expenses incurred by Executive in furtherance or in connection with the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy as in effect.

5.Proprietary Information Obligations.

5.1Proprietary Information Agreement. As a condition of employment, and in consideration for the benefits provided for in this Agreement, Executive shall sign and comply with the Company’s Employee Confidential Information and Invention Assignment Agreement (the “Proprietary Information Agreement”) attached hereto as Exhibit B. In addition, Executive agrees to abide by the Company’s internally published policies and procedures, as may be modified and internally published from time to time within the Company’s discretion.

5.2Third-Party Agreements and Information. Executive represents and warrants that Executive’s employment by the Company does not directly conflict with any prior employment or consulting agreement or other agreement with any third party, and that Executive will perform Executive’s duties to the Company without violating any such agreement. Executive represents and warrants that Executive does not possess confidential information arising out of prior employment, consulting, or other third party relationships, that would be used in connection with Executive’s employment by the Company, except as expressly authorized by that third party. During Executive’s employment by the Company, Executive will use in the performance of Executive’s duties only information that is generally known and used by persons with training and experience comparable to Executive’s own, common knowledge in the industry, otherwise legally in the public domain, or obtained or developed by the Company or by Executive in the course of Executive’s work for the Company.

6.Outside Activities and Non-Competition During Employment.

6.1Outside Activities. Throughout Executive’s employment with the Company, Executive may engage in civic and not-for-profit activities, so long as such activities do not materially interfere with the performance of Executive’s duties hereunder or present a conflict of interest with the Company or its affiliates. Executive may engage in consulting activities or serve on the board of directors of another company so long as such activities are not competitive with the Company and do not interfere with, or diminish, Executive’s attention to Company business. Subject to the restrictions set forth herein, and only with prior written disclosure to and consent of the Board, Executive may engage in other types of business or public activities. The Board may rescind such consent, if the Board determines, in its sole discretion, that such activities compromise or threaten to compromise the Company’s or its affiliates’ business interests or conflict or compete with Executive’s duties to the Company or its affiliates.

6.2Non-Competition During Employment. Except as otherwise provided in this Agreement, during Executive’s employment with the Company, Executive will not, without the prior written consent of the Board, directly or indirectly serve as an officer, director, stockholder, employee, partner, proprietor, investor, joint venture, associate, representative or consultant of any person or entity engaged in, or planning or preparing to engage in, business activity competitive with any line of business engaged in (or planned to be engaged in) by the Company; provided, however, that Executive may purchase or otherwise acquire up to (but not more than) one percent (1%) of any class of securities of any enterprise (without participating in the activities of such enterprise) if such securities are listed on any national or regional securities exchange.

7.Termination of Employment; Severance.

7.1At-Will Employment. Executive’s employment relationship is at-will. Either Executive or the Company may terminate the employment relationship at any time, with or without Cause (as defined below) or advance notice (other than the notice requirements expressly set forth in Section 12).

7.2Termination Without Cause or Resignation for Good Reason. In the event Executive’s employment with the Company is terminated by the Company without Cause (and other than as a result of Executive’s death or Disability (as defined below)) or Executive resigns her employment for Good Reason, then provided such termination or resignation constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder, a “ Separation from Service ”), and provided that Executive satisfies the Release Requirement in Section 8 below, the Company shall provide Executive with the following “ Severance Benefits ”:

7.2.1Severance Payments. Severance pay in the form of continuation of Executive’s Base Salary for a period of twelve (12) months following termination, subject to required payroll deductions and tax withholdings (the “Severance Payments”). Subject to Section 8 below, the Severance Payments shall be made on the Company’s regular payroll schedule in effect following Executive’s termination date; provided, however that any such payments that are otherwise scheduled to be made prior to the Release Effective Date (as defined below) shall instead accrue and be made on the first administratively practicable payroll date following the Release Effective Date.

7.2.2Health Care Continuation Coverage Payments.

(i)COBRA Premiums. If Executive timely elects continued coverage under COBRA, the Company will pay Executive’s COBRA premiums to continue Executive’s coverage (including coverage for Executive’s eligible dependents, if applicable) (“COBRA Premiums”) through the period starting on the first of the month immediately following the termination date and ending twelve (12) months after the termination date (the “COBRA Premium Period”); provided, however, that the Company’s provision of such COBRA Premium benefits will immediately cease if during the COBRA Premium Period Executive becomes eligible for group health insurance coverage through a new employer or Executive ceases to be eligible for COBRA continuation coverage for any reason, including plan termination. In the event Executive becomes covered under another employer’s group health plan or otherwise ceases to be eligible for COBRA during the COBRA Premium Period, Executive must immediately notify the Company of such event.

7.2.3Equity Acceleration upon Termination. 

(a) Notwithstanding anything to the contrary set forth in the Plan or any award agreement, effective as of Executive’s employment termination date, the vesting and exercisability of the then unvested time-based vesting equity awards that would have otherwise become vested had Executive performed Continuous Service through the twelve (12) month anniversary of Executive’s employment termination date then held by Executive shall accelerate and become immediately vested and exercisable, if applicable, by Executive upon such termination and shall remain exercisable, if applicable, following Executive’s termination as set forth in the applicable equity award documents. With respect to any performance-based vesting equity award, such award shall continue to be governed in all respects by the terms of the applicable equity award documents.

(b) Upon any such termination, Executive shall have two (2) years to exercise any options or stock appreciation rights, but no later than ten (10) years from the date of grant or the date when the options or stock appreciation rights would otherwise terminate under the Plan other than as a result of termination of employment (e.g., if all of the Company’s options are accelerated and terminate if not exercised in connection with a Change in Control (as that term is defined in the Plan), then Executive’s options will also terminate if not exercised in connection with the Change in Control).

7.2.4Pro Rata Bonus. Executive shall be eligible to receive, based on the good faith determination of the Board or the Compensation Committee thereof, a pro rata Performance Bonus based on actual results and Executive’s period of employment during the fiscal year in which termination occurred (the “Pro Rata Bonus”), on the date when other bonuses are paid for the fiscal year.

7.2.5No Mitigation or Offset. The Executive shall have no obligation to mitigate the obligations hereunder, and the amounts due hereunder shall not be offset by any amounts otherwise earned by Executive.

7.2.6Involuntary Termination in Connection with a Change in Control. If Executive’s employment is terminated within 18 months of an acquisition, merger, sale, change in control over the Company’s day to day operations, or a dissolution of the Company (a “Change in Control” and “Change in Control Termination”), provided that you remain in compliance with the terms of this Agreement, the Company shall provide you with the following Change in Control Severance Benefits:

(a)

Accelerated Vesting. Effective as of the later of your Change in Control Termination, or the effective date of the Change in Control, the vesting and exercisability of all outstanding stock options and other equity awards covering the Company’s common stock that are held by you as of immediately prior to the Change in Control Termination shall accelerate vesting in full (the “Full Accelerated Vesting Benefit”);

(b)

Payment of severance-related benefits set forth in this Agreement, included but not limited to those set forth in sections 7.2.1 and 7.2.2.

7.3Termination for Cause; Resignation Without Good Reason; Death or Disability. Executive will not be eligible for, or entitled to any severance benefits, including (without limitation) the Severance Benefits listed in Section 7.2 above, if the Company terminates Executive’s employment for Cause, Executive resigns Executive’s employment without Good Reason, or Executive’s employment terminates due to Executive’s death or Disability, provided that the Executive, in the case of death or Disability termination, shall be eligible to receive a Pro Rata Bonus.

8.Conditions to Receipt of Severance Benefits. To be eligible for any of the Severance Benefits pursuant to Section 7.2 above, Executive must satisfy the following release requirement (the “ Release Requirement ”): return to the Company a signed and dated Release within the applicable deadline set forth therein, but in no event later than forty-five (45) calendar days following Executive’s termination date, and permit the Release to become effective and irrevocable in accordance with its terms (such effective date of the Release, the “ Release Effective Date ”). No Severance Benefits will be provided hereunder prior to the Release Effective Date. Accordingly, if Executive refuses to sign and deliver to the Company an executed Release or signs and delivers to the Company the Release but exercises Executive’s right, if any, under applicable law to revoke the Release (or any portion thereof), then Executive will not be entitled to any severance, payment or benefit under this Agreement.

9.Accrued Amounts. On any termination, the Executive shall promptly receive earned but unpaid Base Salary, accrued but unused vacations and unreimbursed expenses (in accordance with the Company’s applicable expense reimbursement policies), and shall be entitled to any amounts due under any benefit or fringe plan or program in accordance with the provisions of the plan or program.

10.Section 409A. It is intended that all of the severance benefits and other payments payable under this Agreement satisfy, to the greatest extent possible, the exemptions from the application of Code Section 409A provided under Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9), and this Agreement will be construed to the greatest extent possible as consistent with those provisions, and to the extent not so exempt, this Agreement (and any definitions hereunder) will be construed in a manner that complies with Section 409A. For purposes of Code Section 409A (including, without limitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), Executive’s right to receive any installment payments under this Agreement (whether severance payments, reimbursements or otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment hereunder shall at all times be considered a separate and distinct payment. Any reference to termination or similar words shall mean a separation from service under the meaning of Code Section 409A. Notwithstanding any provision to the contrary in this Agreement, if Executive is deemed by the Company at the time of Executive’s Separation from Service to be a “specified employee” for purposes of Code Section 409A(a)(2)(B)(i), and if any of the payments upon Separation from Service set forth herein and/or under any other agreement with the Company are deemed to be “deferred compensation”, then to the extent delayed commencement of any portion of such payments is required in order to avoid a prohibited distribution under Code Section 409A(a)(2)(B)(i) and the related adverse taxation under Section 409A, such payments shall not be provided to Executive prior to the earliest of (i) the expiration of the six-month and one day period measured from the date of Executive’s Separation from Service with the Company, (ii) the date of Executive’s death or (iii) such earlier date as permitted under Section 409A without the imposition of adverse taxation. Upon the first business day following the expiration of such applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section 10 shall be paid in a lump sum to Executive, and any remaining payments due shall be paid as otherwise provided herein or in the applicable agreement. No interest shall be due on any amounts so deferred. If any severance benefits provided under this Agreement constitutes “deferred compensation” under Section 409A, for purposes of determining the schedule for payment of the severance benefits, the effective date of the Release will be the sixtieth (60th) date following the Separation From Service, regardless of when the Release actually becomes effective. To the extent required to avoid accelerated taxation and/or tax penalties under Code Section 409A, amounts reimbursable to Executive under this Agreement shall be paid to Executive on or before the last day of the year following the year in which the expense was incurred, amounts shall not be subject to liquidation or exchange for another benefit, and the amount of expenses eligible for reimbursement (and in-kind benefits provided to Executive) during any one year may not effect amounts reimbursable or provided in any subsequent year. The Company makes no representation that any or all of the payments described in this Agreement will be exempt from or comply with Code Section 409A.

11.Section 280G; Limitations on Payment.

11.1If any payment or benefit Executive will or may receive from the Company or otherwise (a “280G Payment ”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “ Excise Tax ”), then any such 280G Payment provided pursuant to this Agreement (a “ Payment ”) shall be equal to the Reduced Amount. The “ Reduced Amount ” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount (i.e., the amount determined by clause (x) or by clause (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence, the reduction shall occur in the manner (the “ Reduction Method ”) that results in the greatest after tax economic benefit for Executive. If more than one method of reduction will result in the same after tax economic benefit, the items so reduced will be reduced pro rata (the “ Pro Rata Reduction Method ”).  

11.2 Notwithstanding any provision of Section 11.1 to the contrary, if the Reduction Method or the Pro Rata Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest after tax economic benefit for Executive as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events ( e.g. , being terminated without Cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are “deferred compensation” within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.

11.3 Unless Executive and the Company agree on an alternative accounting firm or law firm, the accounting firm engaged by the Company for general tax compliance purposes as of the day prior to the effective date of the Change in Control transaction shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control transaction, the Company shall appoint a nationally recognized accounting or law firm to make the determinations required by this Section 11. The Company shall bear all expenses with respect to the determinations by such accounting or law firm required to be made hereunder. The Company shall use commercially reasonable efforts to cause the accounting or law firm engaged to make the determinations hereunder to provide its calculations, together with detailed supporting documentation, to Executive and the Company within fifteen (15) calendar days after the date on which Executive’s right to a 280G Payment becomes reasonably likely to occur (if requested at that time by Executive or the Company) or such other time as requested by Executive or the Company.

11.4 If Executive receives a Payment for which the Reduced Amount was determined pursuant to clause (x) of Section 11.1 and the Internal Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, Executive agrees, to the extent not in violation of the Sarbanes Oxley Act, to promptly return to the Company a sufficient amount of the Payment (after reduction pursuant to clause (x) of Section 11.1) so that no portion of the remaining Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y) of Section 11.1, Executive shall have no obligation to return any portion of the Payment pursuant to the preceding sentence.

12. Definitions.

12.1 Cause. For the purposes of this Agreement, “Cause” means the occurrence of any one or more of the following: (i) Executive’s conviction of or plea of guilty or nolo contendere to any felony; (ii) Executive’s willful and continued failure or refusal to follow lawful and reasonable instructions of the Company or the Board or lawful, reasonable, material and internally published policies and regulations of the Company; (iii) Executive’s willful and continued failure to faithfully and diligently perform the assigned duties of Executive’s employment with the Company (other than on account of illness or excused absence); (iv) unethical or fraudulent conduct by Executive that materially discredits the Company or is materially detrimental to the reputation, character and standing of the Company; or (v) Executive’s material breach of this Agreement or the Proprietary Information Agreement. An event described in Section 12.1(ii) through Section 12.1(v) herein shall not be treated as “Cause” until after Executive has been given written notice of such event, failure, conduct or breach and Executive fails to cure such event, failure, conduct or breach within 30 calendar days from such written notice; provided, however, that such 30 calendar day cure period shall not be required if the event, failure, conduct or breach is incapable of being cured.

12.2 Good Reason. For purposes of this Agreement, Executive shall have “Good Reason” for resignation from employment with the Company if any of the following actions are taken by the Company without Executive’s prior written consent: (i) a reduction in Executive’s Base Salary, other than a reduction by less than ten percent (10%) of the Executive’s highest Base Salary pursuant to a salary reduction program applicable generally to the Company’s senior executives; (ii) a material reduction in Executive’s duties (including responsibilities and/or authorities) or reporting lines; (iii) a relocation of Executive’s principal place of employment to a place that increases Executive’s one-way commute by more than thirty (30) miles as compared to Executive’s then-current principal place of employment immediately prior to such relocation; (iv) change of title, and/or any other change that would remove Executive from the executive committee or otherwise change Executive’s stature within the Company; (v) a material breach of this Agreement; or (vi) unlawful harassment or discrimination toward Executive. In order for Executive to resign for Good Reason, each of the following requirements must be met: (w) Executive must provide written notice to the Company’s Board within 30 days after the first occurrence of the event giving rise to Good Reason setting forth the basis for Executive’s resignation, (x) Executive must allow the Company at least calendar 30 days from receipt of such written notice to cure such event, (y) such event is not reasonably cured by the Company within such 30 calendar day period (the “ Cure Period ”), and (z) Executive must resign from all positions Executive then holds with the Company not later than calendar 30 days after the expiration of the Cure Period.

12.3 Disability. For purposes of this Agreement, “Disability” means that Executive is unable to perform the essential functions of her position (notwithstanding the provision of any reasonable accommodation) by reason of any medically determinable physical or mental impairment which has lasted for a period of one hundred and twenty (120) days during any consecutive six (6) month period.

13.Dispute Resolution. To ensure the rapid and economical resolution of disputes that may arise in connection with Executive’s employment with the Company, Executive and the Company agree that any and all disputes, claims, or causes of action, in law or equity, including but not limited to statutory claims, arising from or relating to the enforcement, breach, performance, or interpretation of this Agreement, Executive’s employment with the Company, or the termination of Executive’s employment with the Company, will be resolved pursuant to the Federal Arbitration Act, 9 U.S.C. §1-16, and to the fullest extent permitted by law, by final, binding and confidential arbitration conducted in Los Angeles, California by JAMS, Inc. (“ JAMS ”) or its successors by a single arbitrator. Both Executive and the Company acknowledge that by agreeing to this arbitration procedure, they each waive the right to resolve any such dispute through a trial by jury or judge or administrative proceeding. Any such arbitration proceeding will be governed by JAMS’ then applicable rules and procedures for employment disputes, which will be provided to Executive upon request. In any such proceeding, the arbitrator shall: (i) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (ii) issue a written arbitration decision including the arbitrator’s essential findings and conclusions and a statement of the award. Executive and the Company each shall be entitled to all rights and remedies that either would be entitled to pursue in a court of law. Nothing in this Agreement is intended to prevent either the Company or Executive from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration pursuant to applicable law. The Company shall pay all filing fees in excess of those which would be required if the dispute were decided in a court of law, and shall pay the arbitrator’s fees and any other fees or costs unique to arbitration. The parties shall pay their own legal fees. Any awards or orders in such arbitrations may be entered and enforced as judgments in the federal and state courts of any competent jurisdiction.

14.General Provisions.  

14.1 Notices. Any notices provided must be in writing and will be deemed effective upon the earlier of personal delivery (including personal delivery by fax) or the next day after sending by overnight carrier, to the Company at its primary office location and to Executive at the address as listed on the Company payroll.

14.2 Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction to the extent possible in keeping with the intent of the parties.

14.3 Waiver. Any waiver of any breach of any provisions of this Agreement must be in writing to be effective, and it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.

14.4 Complete Agreement. This Agreement, together with the Proprietary Information Agreement, the Indemnity Agreement (as defined below) and to the extent referenced in this Agreement, the Plan and applicable award agreement, constitutes the entire agreement between Executive and the Company with regard to the subject matter hereof and is the complete, final, and exclusive embodiment of the Company’s and Executive’s agreement with regard to this subject matter. This Agreement is entered into without reliance on any promise or representation, written or oral, other than those expressly contained herein, and it supersedes and replaces any other agreements or promises made to Executive by anyone concerning Executive’s employment terms, compensation or benefits, whether oral or written (including but not limited any agreements or promises with or from the Company or any of its affiliates or predecessors). It cannot be modified or amended except in a writing signed by a duly authorized officer of the Company, with the exception of those changes expressly reserved to the Company’s discretion in this Agreement.

14.5 Counterparts. This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but both of which taken together will constitute one and the same Agreement.

14.6 Headings. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.

14.7 Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any of Executive’s duties hereunder, Executive may not assign any of Executive’s rights hereunder without the written consent of the Company, which shall not be withheld unreasonably, and the Company may not assign this Agreement, except to an Affiliate (as defined in the Plan) or to a successor in connection with a Change in Control.

14.8 Tax Withholding. All payments and awards contemplated or made pursuant to this Agreement will be subject to withholdings of applicable taxes in compliance with all relevant laws and regulations of all appropriate government authorities. Executive acknowledges and agrees that the Company has neither made any assurances nor any guarantees concerning the tax treatment of any payments or awards contemplated by or made pursuant to this Agreement. Executive has had the opportunity to retain a tax and financial advisor and fully understands the tax and economic consequences of all payments and awards made pursuant to this Agreement.

14.9 Choice of Law. All questions concerning the construction, validity and interpretation of this Agreement will be governed by the laws of the State of California.

14.10 Indemnification Agreement. Executive will become a party to the Company’s standard form of indemnity agreement for directors and officers as filed as an exhibit to the Company’s most recent Annual Report on Form 10-K (the “Indemnity Agreement”).

IN WITNESS WHEREOF, this Agreement shall be effective as of the Effective Date.

CHROMADEX CORPORATION
By:	/s/ David Kroes
	David Kroes
	Senior Vice President, People Matter(s)
EXECUTIVE
By:	/s/ Lisa Harrington
	Lisa Hatton Harrington

EXHIBIT A

SEPARATION DATE RELEASE AGREEMENT

(To be signed on or after the Separation Date)

1.Consideration. I understand that my employment with and services for ChromaDex Corporation (the "Company") terminated effective __________ (the "Separation Date"). The Company has agreed that if I timely sign, date and return this Release Agreement ("Release Agreement"), I do not revoke it, and I comply in all material respects with the terms of the Proprietary Information Agreement (as defined below), the Company will provide me with certain "Severance Benefits" pursuant to the terms and conditions of Sections 7 and 8 of that certain Executive Employment Agreement between myself and the Company dated _______________ (the "Employment Agreement"). I understand that I am not entitled to such "Severance Benefits" unless I timely sign this Release Agreement and allow it to become effective pursuant to Section 4 below.

2.General Release. In exchange for the consideration to be provided to me under the Employment Agreement that I am not otherwise entitled to receive, I hereby generally and completely release, acquit and forever discharge the Company, and its parent, subsidiary, and affiliated entities, along with its predecessors and successors and, in their capacity in such roles, its directors, officers, members, managers, employees, shareholders, stockholders, partners, agents, attorneys, insurers, affiliates and assigns (collectively, the "Released Parties"), of and from any and all claims, liabilities and obligations, both known and unknown, that arise from or are in any way related to events, acts, conduct, or omissions occurring at any time prior to and including the date that I sign this Release Agreement (collectively, the "Released Claims"). The Released Claims include, but are not limited to: (a) all claims arising out of or in any way related to my employment with or services for the Company or its affiliates, or the termination of my employment or services; (b) all claims related to my compensation or benefits from the Company or its affiliates, including salary, bonuses, commissions, other incentive compensation, vacation pay and the redemption thereof, expense reimbursements, fringe benefits, stock, stock options, or any other ownership or equity interests in the Company or its affiliates; (c) all claims for breach of contract, wrongful termination, and breach of the implied covenant of good faith and fair dealing; (d) all tort claims, including but not limited to claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (e) all federal, state, and local statutory claims, including but not limited to claims for discrimination, harassment, retaliation, attorneys' fees, penalties, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990 (as amended), the federal Age Discrimination in Employment Act of 1967 (as amended) (the "ADEA"), the federal Family and Medical Leave Act ("FMLA"); the California Fair Employment and Housing Act (as amended), and the California Labor Code.

3.Excluded Claims. The Released Claims do not include (the "Excluded Claims"): (a) any rights or claims for indemnification or directors and officers liability insurance I may otherwise have; (b) any rights which cannot be waived as a matter of law; (c) any claims arising from breach of this Release Agreement; (d) any rights to the Severance Benefits pursuant to the terms and conditions of Sections 7 and 8 of the Employment Agreement; (e) any rights to the Pro-Rata Bonus pursuant to Section 7.2.4 and 7.3 of the Employment Agreement; (f) any claims for accrued, vested benefits under any employee benefit plan of the Company or its affiliates subject to the terms and conditions of such plan or pursuant to applicable law; and (g) any rights I have in connection with my interest as a stockholder or option holder of the Company. In addition, nothing in this Release Agreement prevents me from filing a charge or complaint with the Equal Employment Opportunity Commission or any similar state or local fair employment law agency, the Department of Labor, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local governmental agency or commission (collectively, the "Government Agencies"). This Release Agreement does not limit my ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agencies. While this Release Agreement does not limit my right to receive an award for information provided to the Securities and Exchange Commission, I understand and agree that, to maximum extent permitted by law, I am otherwise waiving any and all rights I may have to individual relief based on any claims that I have released and any rights I have waived by signing this Release Agreement. I represent and warrant that, other than the Excluded Claims, I am not aware of any claims I have or might have against any of the Released Parties that are not included in the Released Claims.

4. ADEA Waiver. I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under the ADEA ("ADEA Waiver"). I also acknowledge that the consideration given for the ADEA Waiver is in addition to anything of value to which I was already entitled. I further acknowledge that I have been advised by this writing, as required by the ADEA, that:(a) my ADEA Waiver does not apply to any rights or claims that arise after the date I sign this Release Agreement; (b) I should consult with an attorney prior to signing this Release Agreement; (c) I have twenty-one (21) calendar days to consider this Release Agreement (although I may choose to voluntarily sign it sooner); (d) I have seven (7) calendar days following the date I sign this Release Agreement to revoke it; and (e) the Release Agreement will not be effective until the date upon which the revocation period has expired unexercised, which will be the eighth (8^th) calendar day after I sign this Release Agreement (the "Release Effective Date").

5.Waiver of Unknown Claims. In releasing claims unknown to me at present, I am waiving all rights and benefits under the following provision of Section 1542 of the California Civil Code, and any law or legal principle of similar effect in any domestic or international jurisdiction: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor."

6.Other Agreements and Representations. I further represent and agree: (a) that I will comply with my continuing obligations pursuant to the terms of my executed Employee Confidential Information and Invention Assignment Agreement (the "Proprietary Information Agreement"), and (b) that I have been paid all wages earned owed and for all hours worked, I have received all the leave and leave benefits and protections for which I am eligible, pursuant to FMLA, California law, or any applicable law or Company policy, and I have not suffered any on-the-job injury for which I have not already filed a workers' compensation claim.

This Release Agreement, together with the Employment Agreement and the Proprietary Information Agreement, constitutes the complete, final and exclusive embodiment of the entire agreement between the Company and me with regard to the subject matter hereof. I am not relying on any promise or representation by the Company that is not expressly stated herein. This Release Agreement may only be modified by a writing signed by both me and a duly authorized officer of the Company.

UNDERSTOOD AND AGREED:

_________________________________
Signature

_________________________________
Name

_________________________________

Date

Exhibit B

EMPLOYEE CONFIDENTIAL INFORMATION AND

INVENTION ASSIGNMENT AGREEMENT

In consideration of my employment or continued employment by ChromaDex Corporation, its direct and indirect subsidiaries, parents, affiliates, predecessors, successors and assigns (together “Company”), and the compensation and benefits provided to me now and during my employment with Company, I hereby enter into this Employee Confidential Information and Invention Assignment Agreement (the “Agreement”) and agree as follows:

1.CONFIDENTIAL INFORMATION PROTECTIONS.  1.1Recognition of Company’s Rights; Nondisclosure. I understand and acknowledge that my employment by Company creates a relationship of confidence and trust with respect to Company’s Confidential Information (as defined below) and that Company has a protectable interest therein. At all times during and after my employment, I will hold in confidence and will not disclose, use, lecture upon, or publish any of Company’s Confidential Information, except as such disclosure, use or publication may be required in connection with my work for Company, or unless an officer of Company expressly authorizes such disclosure. I will obtain Company’s written approval before publishing or submitting for publication any material (written, oral, or otherwise) that discloses and/or incorporates any Confidential Information. I hereby assign to Company any rights I may have or acquire in such Confidential Information and recognize that all Confidential Information shall be the sole and exclusive property of Company and its assigns. I will take all reasonable precautions to prevent the inadvertent accidental disclosure of Confidential Information. Notwithstanding the foregoing, pursuant to 18 U.S.C. Section 1833(b), I shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (1) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. 1.2Confidential Information. The term “Confidential Information” shall mean any and all confidential knowledge, data or information of Company. By way of illustration but not limitation, “Confidential Information” includes (a) trade secrets, inventions, mask works, ideas, processes, formulas, software in source or object code versions, data, programs, other works of authorship, know-how, improvements, discoveries, developments, designs and techniques and any other proprietary technology and all Intellectual Property Rights therein (collectively, “Inventions”);

products, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, margins, discounts, credit terms, pricing and billing policies, quoting procedures, methods of obtaining business, forecasts, future plans and potential strategies, financial projections and business strategies, operational plans, financing and capital-raising plans, activities and agreements, internal services and operational manuals, methods of conducting Company business, suppliers and supplier information, and purchasing; (c) information regarding customers and potential customers of Company, including customer lists, names, representatives, their needs or desires with respect to the types of products or services offered by Company, proposals, bids, contracts and their contents and parties, the type and quantity of products and services provided or sought to be provided to customers and potential customers of Company and other non-public information relating to customers and potential customers; (d) information regarding any of Company’s business partners and their services, including names; representatives, proposals, bids, contracts and their contents and parties, the type and quantity of products and services received by Company, and other non-public information relating to business partners; (e) information regarding personnel, employee lists, compensation, and employee skills; and (f) any other non-public information which a competitor of Company could use to the competitive disadvantage of Company. Notwithstanding the foregoing, it is understood that, at all such times, I am free to use information which is generally known in the trade or industry through no breach of this Agreement or other act or omission by me. Further, notwithstanding the foregoing or anything to the contrary in this Agreement or any other agreement between the Company and me, nothing in this Agreement shall limit my right to discuss my employment or report possible violations of law or regulation with any federal government agency or similar state or local agency or to discuss the terms and conditions of my employment with others to the extent expressly permitted by Section 7 of the National Labor Relations Act.

1.3Third Party Information. I understand, in addition, that Company has received and in the future will receive from third parties their confidential and/or

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(b) information regarding research, development, new proprietary knowledge, data or information (“Third Party Information”) subject to a duty on Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. During my employment and thereafter, I will hold Third Party Information in confidence and will not disclose to anyone (other than Company personnel who need to know such information in connection with their work for Company) or use, except in connection with my work for Company, Third Party Information unless expressly authorized by an officer of Company in writing. 1.4No Improper Use of Information of Prior Employers and Others. During my employment by Company, I will not improperly use or disclose confidential information or trade secrets, if any, of any former employer or any other person to whom I have an obligation of confidentiality, and I will not bring onto the premises of Company any unpublished documents or any property belonging to any former employer or any other person to whom I have an obligation of confidentiality unless consented to in writing by that former employer or person.	and agree that if I use any Excluded Inventions or any Other Inventions in the scope of my employment, or if I include any Excluded Inventions or Other Inventions in any product or service of Company, or if my rights in any Excluded Inventions or Other Inventions may block or interfere with, or may otherwise be required for, the exercise by Company of any rights assigned to Company under this Agreement, I will immediately so notify Company in writing. Unless Company and I agree otherwise in writing as to particular Excluded Inventions or Other Inventions, I hereby grant to Company, in such circumstances (whether or not I give Company notice as required above), a non-exclusive, perpetual, transferable, fully-paid and royalty-free, irrevocable and worldwide license, with rights to sublicense through multiple levels of sublicensees, to reproduce, make derivative works of, distribute, publicly perform, and publicly display in any form or medium, whether now known or later developed, make, have made, use, sell, import, offer for sale, and exercise any and all present or future rights in, such Excluded Inventions and Other Inventions. To the extent that any third parties have rights in any such Other Inventions, I hereby represent and warrant that such third party or parties have validly and irrevocably granted to me the right to grant the license stated above.
2.ASSIGNMENTS OF INVENTIONS.
2.1Definitions. As used in this Agreement, the term “Intellectual Property Rights” means all trade secrets, Copyrights, trademarks, mask work rights, patents and other intellectual property rights recognized by the laws of any jurisdiction or country; the term “Copyright” means the exclusive legal right to reproduce, perform, display, distribute and make derivative works of a work of authorship (as a literary, musical, or artistic work) recognized by the laws of any jurisdiction or country; and the term “Moral Rights” means all paternity, integrity, disclosure, withdrawal, special and any other similar rights recognized by the laws of any jurisdiction or country. 2.2Excluded Inventions and Other Inventions. Attached hereto as Attachment 1 is a list describing all existing Inventions, if any, that may relate to Company’s business or actual or demonstrably anticipated research or development and that were made by me or acquired by me prior to the commencement of my employment with, and which are not to be assigned to, Company (“Excluded Inventions”). If no such list is attached, I represent and agree that it is because I have no rights in any existing Inventions that may relate to Company’s business or actual or demonstrably anticipated research or development. For purposes of this Agreement, “Other Inventions” means Inventions in which I have or may have an interest, as of the commencement of my employment or thereafter, other than Company Inventions (defined below) and Excluded Inventions. I acknowledge Property Rights with respect thereto).	2.3Assignment of Company Inventions. Inventions assigned to Company, or to a third party as directed by Company pursuant to Section 2.6, are referred to in this Agreement as “Company Inventions.” Subject to Section 2.4 (Unassigned or Nonassignable Inventions) and except for Excluded Inventions set forth in Attachment 1 and Other Inventions, I hereby assign to Company all my right, title, and interest in and to any and all Inventions (and all Intellectual Property Rights with respect thereto) made, conceived, reduced to practice, or learned by me, either alone or with others, during the period of my employment by Company. To the extent required by applicable Copyright laws, I agree to assign in the future (when any copyrightable Inventions are first fixed in a tangible medium of expression) my Copyright rights in and to such Inventions. Any assignment of Company Inventions (and all Intellectual Property Rights with respect thereto) hereunder includes an assignment of all Moral Rights. To the extent such Moral Rights cannot be assigned to Company and to the extent the following is allowed by the laws in any country where Moral Rights exist, I hereby unconditionally and irrevocably waive the enforcement of such Moral Rights, and all claims and causes of action of any kind against Company or related to Company’s customers, with respect to such rights. I further acknowledge and agree that neither my successors-in-interest nor legal heirs retain any Moral Rights in any Company Inventions (and any Intellectual

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2.4Unassigned or Nonassignable Inventions. I recognize that this Agreement will not be deemed to require assignment of any Invention that is covered under California Labor Code section 2870(a) (the “Specific Inventions Law”), as detailed on Attachment 2.   2.5Obligation to Keep Company Informed. During the period of my employment and for one (1) year after termination of my employment, I will promptly and fully disclose to Company in writing all Inventions authored, conceived, or reduced to practice by me, either alone or jointly with others. In addition, I will promptly disclose to Company all patent applications filed by me or on my behalf within one (1) year after termination of employment. At the time of each such disclosure, I will advise Company in writing of any Inventions that I believe fully qualify for protection under the provisions of the Specific Inventions Law; and I will at that time provide to Company in writing all evidence necessary to substantiate that belief. Company will keep in confidence and will not use for any purpose or disclose to third parties without my consent any confidential information disclosed in writing to Company pursuant to this Agreement relating to Inventions that qualify fully for protection under the Specific Inventions Law. I will preserve the confidentiality of any Invention that does not fully qualify for protection under the Specific Inventions Law.   2.6Government or Third Party. I agree that, as directed by Company, I will assign to a third party, including without limitation the United States, all my right, title, and interest in and to any particular Company Invention.   2.7Ownership of Work Product. I agree that Company will exclusively own all work product that is made by me (solely or jointly with others) within the scope of my employment, and I hereby irrevocably and unconditionally assign to Company all right, title, and interest worldwide in and to such work product. I acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of my employment and which are protectable by Copyright are “works made for hire,” pursuant to United States Copyright Act (17 U.S.C., Section 101). I understand and agree that I have no right to publish on, submit for publishing, or use for any publication any work product protected by this Section, except as necessary to perform services for Company.   2.8Enforcement of Intellectual Property Rights and Assistance. I will assist Company in every proper way to obtain, and from time to time enforce, United States and foreign Intellectual Property Rights and Moral Rights relating to Company Inventions in any and all countries. To that end I will execute, verify and deliver such documents and perform such other acts (including appearances as a witness) as Company may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining and enforcing such Intellectual Property Rights and the assignment thereof. In addition, I will execute, verify and deliver assignments of such Intellectual Property Rights to Company or its designee, including the United States or any third party designated by Company. My obligation to assist Company with respect to Intellectual Property Rights relating to such Company Inventions in any and all countries will continue beyond the termination of my employment, but Company will compensate me at a reasonable rate after my termination for the time actually spent by me at Company's request on such assistance. In the event Company is unable for any reason, after reasonable effort, to secure my signature on any document needed in connection with the actions specified in this paragraph, I hereby irrevocably designate and appoint Company and its duly authorized officers and agents as my agent and attorney in fact, which appointment is coupled with an interest, to act for and in my behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of the preceding paragraph with the same legal force and effect as if executed by me. I hereby waive and quitclaim to Company any and all claims, of any nature whatsoever, which I now or may hereafter have for infringement of any Intellectual Property Rights assigned under this Agreement to Company.   2.9Incorporation of Software Code. I agree that I will not incorporate into any Company software or otherwise deliver to Company any software code licensed under the GNU General Public License or Lesser General Public License or any other license that, by its terms, requires or conditions the use or distribution of such code on the disclosure, licensing, or distribution of any source code owned or licensed by Company except in strict compliance with Company’s policies regarding the use of such software.    3.RECORDS. I agree to keep and maintain adequate and current records (in the form of notes, sketches, drawings and in any other form that is required by Company) of all Confidential Information developed by me and all Company Inventions made by me during the period of my employment at Company, which records will be available to and remain the sole property of Company at all times.

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4.DUTY OF LOYALTY DURING EMPLOYMENT. I agree that during the period of my employment by Company I will not, without Company's express written consent, directly or indirectly (a) engage in any other employment or (b) engage in any other activities that are competitive with, or would otherwise conflict with, my employment by Company.   5.NO SOLICITATION OF EMPLOYEES, CONSULTANTS, OR CONTRACTORS. I agree that during the period of my employment and for the one (1) year period after the date my employment ends for any reason, including but not limited to voluntary termination by me or involuntary termination by Company, I will not, as an officer, director, employee, consultant, owner, partner, or in any other capacity, either directly or through others, except on behalf of Company solicit, induce, encourage, or participate in soliciting, inducing or encouraging any employee, consultant, or independent contractor of Company to terminate his, her or its relationship with Company, even if I did not initiate the discussion or seek out the contact.   6.REASONABLENESS OF RESTRICTIONS. I agree that I have read this entire Agreement and understand it. I agree that this Agreement does not prevent me from earning a living or pursuing my career. I agree that the restrictions contained in this Agreement are reasonable, proper, and necessitated by Company’s legitimate business interests. I represent and agree that I am entering into this Agreement freely and with knowledge of its contents with the intent to be bound by the Agreement and the restrictions contained in it.   7.NO CONFLICTING AGREEMENT OR OBLIGATION. I represent that my employment by Company does not and will not breach any agreement with any former employer or third party, including any noncompete agreement or any agreement to keep in confidence or refrain from using information acquired by me prior to my employment by Company. I further represent that I have not entered into, and will not enter into, any agreement, either written or oral, in conflict with my obligations under this Agreement.    8.RETURN OF COMPANY PROPERTY. Subject to the nondisclosure requirements of Section 1.1 above, upon termination of my employment or upon Company’s request at any other time, I will deliver to Company any and all of Company’s property and equipment and any and all drawings, notes, memoranda, specifications, devices, formulas and documents, together with all copies thereof, and any other material containing or disclosing any Company Inventions, Third Party Information or Confidential Information of Company. I agree that I will not copy, delete, or alter any information contained upon my Company computer or Company equipment before I return it to Company. In addition, if I have used any personal computer, server, or e-mail system to receive, store, review, prepare or transmit any Company information, including but not limited to, Confidential Information, I agree to provide Company with a computer-useable copy of all such Confidential Information and then permanently delete and expunge such Confidential Information from those systems; and I agree to provide Company access to my system as reasonably requested to verify that the necessary copying and/or deletion is completed. I further agree that any property situated on Company’s premises and owned by Company, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company’s personnel at any time with or without notice.   9.LEGAL AND EQUITABLE REMEDIES.    9.1I agree that it may be impossible to assess the damages caused by my violation of this Agreement or any of its terms. I agree that any threatened or actual violation of this Agreement or any of its terms will constitute immediate and irreparable injury to Company, and Company will have the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief, without bond and without prejudice to any other rights and remedies that Company may have for a breach or threatened breach of this Agreement.    9.2In the event Company enforces this Agreement through a court or arbitration order, I agree that the restrictions of Sections 5 will remain in effect for a period of twelve (12) months from the effective date of the order enforcing the Agreement.    10.NOTICES. Any notices required or permitted under this Agreement will be given to Company at its headquarters location at the time notice is given, and to me at my address as listed on Company payroll, or at such other address as Company or I may designate by written notice to the other. Notice will be effective upon receipt or refusal of delivery. If delivered by certified or registered mail, notice will be considered to have been given five (5) business days after it was mailed, as evidenced by the postmark. If delivered by courier or express mail service, notice will be considered to have been given on the delivery date reflected by the courier or express mail service receipt.    11.NOTIFICATION OF NEW EMPLOYER. If I leave the employ of Company, I consent to the notification of my new employer of my rights and obligations under this Agreement, by Company providing a copy of this Agreement or otherwise.

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12.GENERAL PROVISIONS.    12.1Governing Law. This Agreement will be governed by and construed according to the laws of the State of California as such laws are applied to agreements entered into and to be performed entirely within California between California residents.    12.2Severability. In case any one or more of the provisions, subsections, or sentences contained in this Agreement will, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect the other provisions of this Agreement, and this Agreement will be construed as if such invalid, illegal or unenforceable provision had never been contained in this Agreement. If moreover, any one or more of the provisions contained in this Agreement will for any reason be held to be excessively broad as to duration, geographical scope, activity or subject, it will be construed by limiting and reducing it, so as to be enforceable to the extent compatible with the applicable law as it will then appear.    12.3Successors and Assigns. This Agreement is for my benefit and the benefit of Company, its successors, assigns, parent corporations, direct and indirect subsidiaries, affiliates, and purchasers, and will be binding upon my heirs, executors, administrators and other legal representatives.    12.4Survival. This Agreement shall survive the termination of my employment, regardless of the reason, and the assignment of this Agreement by Company to any successor in interest or other assignee.   12.5Waiver. No waiver by Company of any breach of this Agreement will be a waiver of any preceding or succeeding breach. No waiver by Company of any right under this Agreement will be construed as a waiver of any other right. Company will not be required to give notice to enforce strict adherence to all terms of this Agreement.    12.6Export. I agree not to export, reexport, or transfer, directly or indirectly, any U.S. technical data acquired from Company or any products utilizing such data, in violation of the United States export laws or regulations.    12.7Entire Agreement. The obligations pursuant to Sections 1 and 2 of this Agreement will apply to any time during which I was previously engaged, or am in the future engaged, by Company as a consultant (except Subsection 2.4) or employee if no other agreement governs nondisclosure and assignment of inventions during such period. This Agreement is the final, complete and exclusive agreement of the parties with respect to the subject matter of this Agreement and supersedes and merges all prior discussions between us. No modification of or amendment to this Agreement, will be effective unless in writing and signed by the party to be charged. Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement.

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This Agreement shall be effective as of the first day of my employment with Company.

EMPLOYEE: I HAVE READ, UNDERSTAND, AND ACCEPT THIS AGREEMENT: /s/ Lisa Harrington	COMPANY: ACCEPTED AND AGREED: /s/ David Kroes
(Signature) By: Lisa Harrington	(Signature) By: David Kroes
Title: General Counsel	Title: Head of People Matter(s)
Date: 11/17/2020	Date: 11/17/2020
Address: 53 Sea Terrace                  Newport Coast, CA 92657	Address: 10900 Wilshire Blvd #600                   Los Angeles, CA 90024

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ATTACHMENT 1

PRIOR INVENTIONS

TO:	ChromaDex Corporation
FROM:	Lisa Harrington
DATE:	11/17/2020

SUBJECT: Prior Inventions 

1. Except as listed in Section 2 below, the following is a complete list of all inventions or improvements relevant to the subject matter of my employment by ChromaDex Corporation (“Company”) that have been made or conceived or first reduced to practice by me alone or jointly with others prior to my engagement by Company: 

☒	No inventions or improvements.
☐	See below:

☐ Additional sheets attached.

2. Due to a prior confidentiality agreement, I cannot complete the disclosure under Section 1 above with respect to inventions or improvements generally listed below, the intellectual property rights and duty of confidentiality with respect to which I owe to the following party(ies):

	Invention or Improvement	Party(ies)	Relationship
1.
2.
3.
☐	Additional sheets attached.

A-1

ATTACHMENT 2

LIMITED EXCLUSION NOTIFICATION

This is to notify you in accordance with Section 2872 of the California Labor Code that the foregoing Agreement between you and Company does not require you to assign or offer to assign to Company any Invention that you develop entirely on your own time without using Company’s equipment, supplies, facilities or trade secret information, except for those Inventions that either:

(a) Relate at the time of conception or reduction to practice to Company’s business, or actual or demonstrably anticipated research or development; or

(b) Result from any work performed by you for Company.

To the extent a provision in the foregoing Agreement purports to require you to assign an Invention otherwise excluded from the preceding paragraph, the provision is against the public policy of this state and is unenforceable.

This limited exclusion does not apply to any patent or Invention covered by a contract between Company and the United States or any of its agencies requiring full title to such patent or Invention to be in the United States.

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EX-10.3

EXHIBIT 10.3

CONSULTANT AGREEMENT

This Agreement is made as of this March 15, 2021 (“Effective Date”) by and between ChromaDex, Inc., with a notice address of 10900 Wilshire Blvd., Suite 600, Los Angeles, California 90024, (“ChromaDex”), and Mark Friedman, an individual, with a notice address of 5432 Hermitage Ave. #302, Valley Village, CA 90607 (“Consultant”). ChromaDex and Consultant are sometimes collectively referred to hereunder as “the Parties.”

WITNESSETH:

WHEREAS:  ChromaDex desires to have Consultant perform services, fully described in the Scope of Work attached hereto as Exhibit A (“Services”), and Consultant desires to perform such services.

NOW, THEREFORE, for and in consideration of the mutual covenants herein contained, receipt of which is hereby acknowledged, the parties hereto mutually agree as follows:

1. Period of Performance. This Agreement shall commence on the Effective Date, and shall continue for ninety (90) days, unless terminated earlier in accordance herewith (the “Initial Term”). The Parties may renew this Agreement for subsequent, one-month terms upon their written agreement (the “Renewal Term”).
 

2. Consideration and Payment. Consultant shall perform not less than forty (40) hours of work per month during the Term. In consideration for the Services, ChromaDex shall pay Consultant twelve-thousand dollars and 00/100 (12,000.00) (USD) per month during the Term. In the event Consultant exceeds forty (40) hours of work per month, ChromaDex shall pay Consultant three-hundred fifty dollars and 00/100 ($350.00) (USD) per hour for each additional hour of work performed. Payment shall be made monthly, within ten (10) days of receipt of invoice. The invoice should include the dates covered by the invoice and, if any additional hourly billing shall include a summary of the work performed. In addition, all stock option grants made to Consultant during his capacity as an employee shall continue to vest in accordance with the terms of such grants so long as Consultant provides Continuous Service (as those terms are defined by ChromaDex’s 2017 Equity Incentive Plan) to ChromaDex under the terms of this Agreement. At the time that Continuous Service ceases, so shall any and all vesting, and at which point the applicable post-service exercise period provided in each grant shall be effective. For the avoidance of doubt, Consultant’s performance of the Services under this Agreement shall constitute Continuous Service, as defined by ChromaDex’s 2017 Equity Incentive Plan.

3. Reimbursement of Expenses. Consultant shall be responsible for all routine expenses incurred by the Consultant, or his employees, under this Agreement, such as printer expenses, license fees, and insurance premiums, unless otherwise agreed to in writing. ChromaDex shall reimburse Consultant for reasonable communications and travel expenses incurred while performing Services under this Agreement in accordance with Company’s then current travel and expense policies. Consultant recognizes that the Services to be provided hereunder are discreet and finite in nature and are not intended to create and the parties do not contemplate a continuing relationship beyond completion of the specified Services.

4. Tool and Supplies. Unless otherwise agreed to in writing, Consultant shall be solely responsible for procuring, paying for and maintaining any computer equipment, software, paper, tools or other supplies necessary or appropriate for the performance of the Consultant’s Services hereunder. For avoidance of doubt, Consultant may continue to use the ChromaDex supplied laptop, tablet and cellular telephone during the Initial Term and any Renewal Term.

5. Technical Guidance. Generally, Consultant is expected to utilize his/her skills and expertise independently to complete the Services. To the extent technical guidance from ChromaDex may be necessary for the Consultant to complete the Services, the Consultant shall receive technical guidance only from Lisa Harrington or her designees, as authorized in writing. The ChromaDex representative responsible for approval of Consultant’s work shall be Lisa Harrington.

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6. Time of Performance. Consultant’s daily schedule and hours worked under this Agreement shall generally be subject to the Consultant’s discretion. The Parties acknowledge that, except as provided herein, this Agreement is not intended to restrict or limit the right of the Consultant to perform services/work for or on behalf of individuals or entities other than ChromaDex and that Consultant is free to do so. However, Consultant agrees to devote sufficient time as necessary to fulfill the purposes of this Agreement within the term of this Agreement.

7. Place of Work. Consultant shall render the Services primarily from Consultant’s place of business. ChromaDex shall not designate nor set aside any workspace at ChromaDex’s place of business for Consultant unless otherwise agreed to in writing. In the event Consultant performs any of the Services at ChromaDex’s place of business, Consultant agrees to comply with all applicable security and workplace regulations in effect at ChromaDex’s place of business for the duration of Consultant’s services/work there.

8. Independent Contractor. Consultant is, and throughout the term of this Agreement shall be, an independent contractor and not an employee or agent of ChromaDex. The Consultant shall not be entitled to nor receive any of the benefits normally provided to employees including, but not limited to, vacation, retirement benefits or benefits under any other ERISA qualified plan, health care benefits, sick time, unemployment or workers compensation benefits. By executing this Agreement, Consultant hereby waives his/her right to all such benefits including the right to file a claim for any employee benefits under the Employee Retirement Income Security Act, other applicable federal, state or local law, rules or regulations, or any ChromaDex policy, practice, procedure or program. Notwithstanding anything to the contrary contained herein, ChromaDex and Consultant agree that Consultant served as an employee of ChromaDex from January 22, 2018 to March 12, 2021 (the “Employment Period”), and that Consultant participated in ChromaDex’s medical, dental and vision benefits during the Employment Period. Provided that Consultant timely elects Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) continuation coverage for medical, dental and vision benefits, ChromaDex will cover the cost of the current benefit premium during the Initial Term and any Renewal Term. Except as set forth herein, ChromaDex shall neither have nor exercise control or direction whatsoever over the operations of Consultant or the manner and means by which Consultant performs the Services, and Consultant shall neither have nor exercise any control or direction whatsoever over the employees, agents or subcontractors hired by ChromaDex. Consultant represents and warrants that Consultant is self-employed in an independently established trade, occupation, or business; maintains and operates a business that is separate and independent from ChromaDex’s business; holds himself or herself out to the public as independently competent and available to provide applicable services similar to the Services; has obtained and/or expects to obtain clients or customers other than ChromaDex for whom Consultant performs services; and will perform work for ChromaDex that Consultant understands is outside the usual course of Client’s business.

9. Taxes. As an independent contractor, Consultant shall be responsible to pay, according to all applicable state, federal and local laws, his or her own income taxes or other taxes levied on payments made to the Consultant pursuant to this Agreement. If the Consultant is not a corporation, he or she understands that he/she may be liable for self-employment taxes. ChromaDex shall neither pay nor withhold federal, state or local income tax or payroll tax of any kind on behalf of the Consultant.

10. Warranty; Care of ChromaDex’s Intellectual Property and Confidential Information. Consultant represents and warrants that the execution, delivery and performance of this Agreement will not violate and/or conflict with any other agreement that the Consultant is a party to and that the Services to be performed by Consultant hereunder will be performed competently and in accordance with the standard of care usually and reasonably expected in performance of the Services. Consultant covenants to protect all property of ChromaDex including ChromaDex’s Confidential Information and Trade Secrets (as defined below) and its customers, vendors, and other affiliates and partners to which such Consultant has access, as a result of Consultant’s consulting under this Agreement, with the same level of care he/she would provide to his/her own property and confidential information, and in no event less than an objectively reasonable standard of care. This Section applies during and after termination of this Agreement based on obligations further set forth herein.

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11. Termination. During the Initial Term, either party may terminate this Agreement, with or without cause, upon thirty (30) days’ written notice. During the Renewal Term, either party may terminate this Agreement, with or without cause, upon five (5) days’ written notice. Upon termination, ChromaDex shall be solely responsible for paying Consultant the pro rata amount of the Services rendered as of the termination date, including expenses.

12. Insurance and Taxes. ChromaDex and Consultant will be responsible for maintaining their own separate insurance policies including, without limitation, Comprehensive General and Automobile Liability, Workmen’s Compensation and other necessary insurance coverage. The Consultant, as an independent agent, agrees that he/she will not to be entitled to file any claim for Workmen’s Compensation or any other claim under ChromaDex’s insurance policies and will be responsible for his/her own Workmen’s Compensation Insurance Coverage. The Consultant will also be responsible for payment of any State, local, or federal taxes resulting from work under this Agreement.

PLEASE NOTE: CHROMADEX IS REQUIRED TO SUBMIT TO THE INTERNAL REVENUE SERVICE AN ANNUAL FORM 1099 STATEMENT OF INCOME FOR ALL PAYMENTS TO CONSULTANTS, AND AS SUCH CONSULTANT MUST PROVIDE A TAX IDENTIFICATION NUMBER TO CHROMADEX.

13. Non-Disclosure of Trade Secrets and Confidential Information. ChromaDex agrees to provide Consultant with assistance and access to Confidential Information and Trade Secrets necessary to perform Consultant’s Services for ChromaDex. Consultant agrees, except as specifically required in the performance of Consultant’s duties for ChromaDex, that Consultant will not, during the course of the Agreement, or at any time thereafter, directly or indirectly use, disclose or disseminate to any other person, organization or entity or otherwise employ any Trade Secrets or Confidential Information for competitive purposes. For purposes of this Agreement, “Confidential Information and Trade Secrets” shall include confidential proprietary information and trade secrets of ChromaDex and its clients including by way of example, but not limited to, technical, scientific, experimental results, statistical information related to ChromaDex’s products and research; customer lists, business plans, marketing plans, financial information; designs, drawings, drafts, computer models, manuscripts, specifications, software, and coding methods. “Confidential Information and Trade Secrets” shall not include any data or information that has been voluntarily disclosed to the public by ChromaDex (except where such public disclosure has been made by Consultant or others without authorization) or that has been independently developed and disclosed by others, or that otherwise enters the public domain through lawful means. Consultant agrees to keep all Confidential Information and Trade Secrets in a secure place and agrees not to publish, communicate, use or disclose any such confidential information or trade secrets, directly or indirectly, for his or her own benefit or for the benefit of another, either during or after the term of this Agreement without the President of ChromaDex’s express written consent. Upon termination of this Agreement, the Consultant shall deliver all documents, records, data, information and all other materials, whether on paper or electronically recorded, produced or acquired during the performance of this Agreement, and all copies thereof, to ChromaDex. In addition, pursuant to 18 U.S.C. Section 1833(b), Consultant will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made: (1) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. For the avoidance of doubt, any statements or communications between Consultant and ChromaDex during the Initial Term or any Renewal Term shall constitute attorney-client communication, and shall be subject to attorney-client privilege.

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14. Rights in Inventions.

a. Assignment of IP Rights to ChromaDex. In performing the Services, Consultant hereby assigns to ChromaDex all rights in all inventions, developments and discoveries, including derivatives and improvements thereto, whether or not patentable, and all patent rights related to the foregoing including rights to make priority claims in any country (“Inventions”), and all suggestions, proposals, written works of authorship, and computer programs, and all copyrights whether or not registered related to the foregoing (collectively with Inventions, the “Work Product”), which Consultant authors, invents, discovers, develops, conceives or makes, either solely or jointly with others, while consulting with ChromaDex, or which involve Information or equipment, supplies, facilities, direct or indirect funding, or materials owned or provided by or on behalf of ChromaDex. The rights granted to ChromaDex in the Work Product include the right to disclose or publish, or not to do so, and to pursue patents and assert other intellectual property rights related thereto. Consultant will execute all documents and take all other actions as may be necessary (at no out-of-pocket expense to Consultant) to assign all rights to or otherwise vest good title to ChromaDex in all Work Product, and Consultant will not use any Information for Consultant’s own benefit or for that of any other business entity or person except as permitted in writing by ChromaDex.

b. Work-Made-For-Hire. Additionally, any work of authorship prepared by Consultant in connection with efforts under this Agreement or related to or arising from Information that Consultant has access to in connection with this Agreement, will be considered a work made for hire pursuant to this Agreement and be the sole and exclusive property of ChromaDex, free and clear of any claims by Consultant.

c. Disclosure Obligation of Consultant. Consultant will disclose promptly in writing (which writing may take the form of a patent application or similar document prepared by ChromaDex’s counsel with Consultant’s cooperation and assistance) to ChromaDex all Inventions and other Work Product developed, made, or conceived either solely or in collaboration with others under, or arising from or related to, this Agreement. Consultant hereby assigns to ChromaDex its, his, or her entire right, title, and interest in and to any and all such Inventions and other Work Product. Consultant hereby agrees to execute all such documents, testify in all legal or quasi-legal proceedings requested, and otherwise take all such action as may be required to effectuate or evidence such assignment and/or to cooperate with ChromaDex in filing applications, and pursuing and enforcing patents and copyright registrations in any and all countries. As such, Consultant hereby irrevocably appoints ChromaDex, and its duly authorized officers and agents, as Consultant’s attorney to execute and deliver any documents needed and to do all other lawfully permitted acts to secure such intellectual property rights with the same legal force and effect as if executed by Consultant.

15. Reasonable Restrictions. Consultant acknowledges that the restrictions imposed by this Agreement are reasonable and necessary to protect ChromaDex’s Confidential Information and Trade Secrets and intellectual property assets. When for any reason this Agreement terminates, Consultant hereby represents to ChromaDex that Consultant has the ability to earn a livelihood without violating such restrictions.

16. Injunctive Relief; Other Remedies. Consultant recognizes that the remedy at law for any breach or violation, or threatened breach or violation, by Consultant of this Agreement will be inadequate and ChromaDex would suffer continuing and irreparable injury to its business as a direct result of such violations. If Consultant breaches, or threatens to breach, any material obligation contained herein, then ChromaDex at its sole discretion will be entitled to institute and prosecute proceedings in any court of competent jurisdiction or in a binding arbitration, either in law or in equity, to obtain the specific performance thereof by Consultant or to enjoin Consultant from violating the provisions hereof. If court proceedings or an arbitration are instituted by reason of a breach or violation hereof the prevailing party will receive, in addition to any damages awarded, its reasonable attorney’s fees, court costs and related expenses.

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17. Representation. Consultant represents that there is no conflict of interest between its performance of this Agreement and any other agreement Consultant has with others. In the event Consultant believes that there is presently any such conflict, or any such conflict arises during this Agreement or extensions thereof, it will advise ChromaDex immediately in writing.

18. Non-Disparagement. Upon the expiration or termination of this Agreement (whichever is later), Consultant agrees not to disparage ChromaDex’s senior management in any manner likely to be harmful to its or their business, business reputation, or personal reputation. Upon the expiration or termination of this Agreement (whichever is later), ChromaDex agrees that its senior management shall refrain from making any written or oral statements to any person or entity which may reasonably be expected to impugn or degrade the character, reputation, integrity, ethics or business practices of the Consultant. Each party may respond accurately and fully to any request for information if required by legal process or in connection with a government investigation. In addition, nothing in this provision or this Agreement is intended to prohibit or restrain Consultant in any manner from making disclosures protected under the whistleblower provisions of federal or state law or regulation or other applicable law or regulation.

19. Cooperation. Consultant agrees to cooperate fully with ChromaDex in connection with its actual or contemplated defense, prosecution, or investigation of any claims or demands by or against third parties, or other matters arising from events, acts, or failures to act that occurred during the period of Consultant’s service for ChromaDex (whether as an employee or consultant). Such cooperation includes, without limitation, making oneself available to ChromaDex upon reasonable notice, without subpoena, to provide complete, truthful and accurate information in witness interviews, depositions, and trial testimony. ChromaDex will reimburse Consultant for reasonable out-of-pocket expenses Consultant incurs in connection with any such cooperation (including a reasonable hourly fee to be negotiated) and will make reasonable efforts to accommodate Consultant’s scheduling needs.

20. Indemnification by ChromaDex. ChromaDex agrees to indemnify, defend, and hold harmless Consultant from and against any third party claims which may arise under this Agreement, or in connection with Consultant’s performance of his Services. For the avoidance of doubt, ChromaDex shall indemnify, defend, and hold harmless Consultant from and against any and all third party claims concerning or relating to shareholder actions, derivative actions, actions related to ChromaDex’s required filings under the Securities Exchange Act of 1934, or such other third party claims arising in connection with Consultant’s Services under this Agreement.

21. Non-Assignment. Neither party may assign this Agreement, or any rights and duties hereunder, without written consent of the other; provided that ChromaDex may assign or otherwise transfer this Agreement to its affiliates and otherwise incident to the transfer, sale, acquisition, or merger of substantially all the assets of ChromaDex, or by operation of law.

22. Integration. This Agreement sets forth the entire and only agreement and understanding between ChromaDex and the Consultant relative to the subject matter hereof. Any representation, promise, or condition, whether oral or written, that is not incorporated herein shall not be binding upon either party. Thus, this Agreement supersedes any prior agreements between the parties regarding the subject matter hereof, oral or written. No waiver, modification, or amendment of the terms of this Agreement shall be effective unless made in writing and signed by an authorized representative of the party sought to be bound hereby.

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23. Severability. The sections of this Agreement will be enforceable to the fullest extent permissible under applicable law, but the unenforceability (or modification to conform to such law) of any provision(s) hereof will not render unenforceable or impair the remainder thereof. If any provision(s) hereof are deemed invalid, illegal, or unenforceable, the offending provision(s) should be deleted or modified, as minimally as possible and as necessary, to retain as much of the provision and this Agreement valid and enforceable as possible.

24. Ethics. Consultant shall be responsible for knowing and shall comply, in all material respects, with all applicable laws, rules, and regulations governing the ethics and operations of organizations affected by Consultant's activities.

a. Anti-Corruption Compliance

i. Consultant and its affiliates, subsidiaries, directors, officers, employees, agents, consultants, and all other persons acting on its behalf shall at all times comply with (1) ChromaDex’s Corporate Code of Business conduct and Ethics, (2) the U.S. Foreign Corrupt Practices Act, as amended, and the rules and regulations thereunder, and (3) any other applicable anti-corruption laws (collectively, the “Anti-Corruption Laws”).

ii. In connection with any aspect of this Agreement or any other transaction involving ChromaDex, neither Consultant nor any of its affiliates, subsidiaries, directors, officers, employees, agents, consultants, or other persons acting on its behalf shall take any action, directly or indirectly, that may result in a violation of the Anti-Corruption Laws by Consultant or ChromaDex, including, without limitation, by making, offering, authorizing, or promising any payment, contribution, gift, business courtesy, bribe, rebate, kickback, or any other thing of value, regardless of form or amount, to any (a) foreign or domestic government official or employee, (b) employee of a foreign or domestic government owned or government-controlled entity, (c) foreign or domestic political party, political official, or candidate for political office, or (d) any officer or employee of a public international organization, to obtain a competitive advantage for any party or to receive favorable treatment in obtaining or retaining business. Should Consultant learn or have reason to know that conduct has or may have occurred in violation of this provision, it will immediately notify ChromaDex.
 

iii. At ChromaDex’s request, Consultant and any of its affiliates, subsidiaries, directors, officers, or employees that perform tasks pursuant to this Agreement will certify in writing that they have not engaged in conduct in violation of parts i or ii of this Section.

iv. No rights or obligations of, or services to be rendered by, Consultant under this Agreement shall be assigned, transferred, or subcontracted to any third party without the prior written consent of ChromaDex. In no event shall ChromaDex be obligated under this Agreement to take any action or omit to take any action that it believes, in good faith, would cause it to violate the Anti-Corruption Laws.

v. ChromaDex or a third party of its choosing shall have the right to access, review, and audit the books, records, and accounts of Consultant and any of its affiliates and subsidiaries, to the extent that they are relevant to this Agreement or any other transaction involving ChromaDex. Such access, audit, and review shall be reasonable as to scope, place, date, and time.

vi. If Consultant breaches any of the parts of this Agreement, ChromaDex may terminate this Agreement without penalty upon service of written notice upon Consultant.

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25. Authority. Consultant acknowledges that he/she is neither an Officer nor a Director of ChromaDex and does not have the authority to bind ChromaDex or its affiliates to any contract, lease, or agreement in any form. Consultant also agrees that he will inform any entity or individual who wishes to enter into any contract or other binding agreement with ChromaDex that he does not have the authority to execute documents or bind ChromaDex or its affiliates without specific written authorization.

26. Independent Counsel and Joint Drafting. Each party acknowledges and agrees that it: (a) is aware that this Agreement affects its legal rights; (b) has had the opportunity to seek advice regarding this Agreement from independent counsel of its own choosing; and (c) understands and voluntarily enters this Agreement of its own free will and choice. Thus, this Agreement should be construed to have been drafted jointly and will not be strictly construed against either party.

27. Action on Termination. Upon termination of this Agreement for any reason, with or without cause: (a) at the request of ChromaDex, Consultant must deliver immediately to ChromaDex all work product, images, writings, lists, samples, experimental results, data, quotations, books, records, files, computer software, drawings, other tangible manifestations of ChromaDex’s Information, keys, access codes, and other property of ChromaDex and its vendors, customers, and affiliates that Consultant had access to as a result of consulting under this Agreement, that are in Consultant’s possession, custody or control; and (b) at the request of ChromaDex, Consultant will execute such documents and take such other actions as necessary in order to reaffirm the covenants and obligations set forth in this Agreement; provided, however that failure to request such reaffirmation will not waive any requirements of this Agreement. Consultant understands that failure to perform these obligations may result in ChromaDex, at its sole discretion, withholding payment of any remaining compensation or taking any other legal action necessary to protect its rights.

28. Notices. All notices, requests, demands and other communications required or permitted hereunder shall be given in writing and shall be deemed to have been duly given if given by electronic mail to legal@chromadex.com for ChromaDex, and to mfriedman0817@gmail.com for Consultant, or delivered or mailed, postage prepaid, by certified or registered mail or by use of an independent third party commercial delivery service for same day or next day delivery and providing a signed receipt to the address set forth above or to such other address as either party shall have previously specified in writing to the other. Notice by electronic mail shall be deemed effective upon receipt, notice by mail shall be deemed effective on the second business day after its deposit with the United States Postal Service, notice by same day courier service shall be deemed effective on the day of deposit with the delivery service and notice by next day delivery service shall be deemed effective on the day following the deposit with the delivery service.

29. No Agency Created. No agency, employment, partnership or joint venture shall be created by this Agreement, as Consultant is an independent contractor. Consultant shall have no authority as an agent of ChromaDex or to otherwise bind ChromaDex to any agreement, commitment, obligation, contract, instrument, undertaking, arrangement, certificate or other matter. Each party hereto shall refrain from making any representation intended to create an apparent agency, employment, partnership or joint venture relationship between the parties.

30. Counterparts. This Agreement may be executed in counterparts, each of shall constitute an original, whether actual original or a copy, and all of which shall constitute one and the same instrument.

31. Dispute Resolution. The laws of the State of California (without giving effect to conflict of law principles) shall govern all matters arising out of or relating to this Agreement, including interpretation and performance, together with the provisions of the Federal Arbitration Act. Each party submits to the exclusive jurisdiction of, and consents to personal jurisdiction of and venue in, the state or federal courts of Los Angeles County, California (“Forum Courts”) for the proceedings arising out of or relating to this Agreement. ChromaDex and Consultant both consent that any dispute or any claim relating in any way to this Agreement will be resolved by binding arbitration as described in this paragraph, rather than in court, except that any party may bring suit in Forum Courts, submitting to the jurisdiction of the Forum Courts and waiving their respective rights to any other jurisdiction, for any preliminary injunction or temporary restraining order, or to enjoin infringement or other misuse of intellectual property rights. Before Consultant may begin an arbitration proceeding, Consultant must send a letter requesting arbitration and describing Consultant’s claim to ChromaDex at its address, 10900 Wilshire Blvd., Suite 600, Los Angeles, CA 90024. The arbitration will be conducted by the American Arbitration Association (AAA) under its commercial rules at AAA’s offices in Los Angeles County, California. Payment of all filing, administration and arbitrator fees will be governed by the AAA's rules. The expedited procedures of the AAA’s rules will apply only in cases seeking exclusively monetary relief under $50,000, and in such cases the hearing will be scheduled to take place within 90 days of the arbitrator’s appointment. Any dispute regarding whether a claim is subject to arbitration shall be resolved by the arbitrator. Should the arbitrator determine that claims filed are frivolous, the prevailing party shall be entitled to reasonable attorneys’ fees and costs. ChromaDex and Consultant each agree that any dispute resolution proceedings will be conducted only on an individual basis and not in a class, consolidated or representative action. If for any reason a claim proceeds in court rather than in arbitration ChromaDex and Consultant each waive any right to a jury trial.

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IN WITNESS WHEREOF, the Parties have executed this Agreement on the date indicated below their respective signatures.

CHROMADEX, INC.		CONSULTANT
BY:	/s/ David Kroes	BY:	/s/ Mark Friedman
NAME:	David Kroes	NAME:	Mark Friedman
TITLE:	SVP, People Matter(s)
DATE:	3/10/2021	DATE:	3/10/2021

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EXHIBIT A

Scope of Work

1.       Consultant shall provide an advisory role for ChromaDex which shall include, without limitation, review and support of ChromaDex’s required filings under the Securities Exchange Act of 1934, management and coordination of ongoing litigation involving ChromaDex, maintaining and developing ChromaDex’s commercial relationships, and performing additional work at the reasonable request of ChromaDex.

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EX-10.4

EXHIBIT 10.4

CONSENT TO BUSINESS FINANCING AGREEMENT

This Consent to Business Financing Agreement (this “Amendment”) is entered into as of January 14, 2021, by and among WESTERN ALLIANCE BANK, an Arizona corporation (“Lender”), CHROMADEX CORPORATION, a Delaware corporation (“Chromadex Corp”), CHROMADEX, INC., a California corporation (“Chromadex Inc”), CHROMADEX ANALYTICS, INC., a Nevada corporation (“Chromadex Analytics”), and HEALTHSPAN RESEARCH LLC, a Delaware limited liability company (“HealthSpan”; together with Chromadex Corp, Chromadex Inc, and Chromadex Analytics, individually and collectively, “Borrower”).

1.DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be owing by Borrower to Lender, Borrower is indebted to Lender pursuant to, among other documents, a Business Financing Agreement, dated November 12, 2019, by and among Borrower and Lender, as may be amended from time to time (the “Business Financing Agreement”). Capitalized terms used without definition herein shall have the meanings assigned to them in the Business Financing Agreement.

Hereinafter, all indebtedness owing by Borrower to Lender shall be referred to as the “Indebtedness” and the Business Financing Agreement and any and all other documents executed by Borrower in favor of Lender shall be referred to as the “Loan Documents”.

2.CONSENT: Subject to the terms and conditions of this Agreement and notwithstanding the restrictions set forth in Sections 4.1 and 5 of the Business Financing Agreement, Lender hereby consents to the Restructuring Transaction (as defined below). As of the date hereof, the Contribution Agreement (as defined below) attached hereto as Exhibit A has not been modified, changed, supplemented, canceled, amended or otherwise altered or affected. Immediately after giving effect to the closing and consummation of the Contribution Agreement, the Restructuring Transaction will have been effected, closed and consummated pursuant to, and in accordance with, the terms and conditions of the Contribution Agreement and with all applicable laws. As defined herein, (i) “Contribution Agreement” means that certain Contribution Agreement dated on or about the date hereof, by and between HealthSpan and Chromadex Inc., and (ii) “Restructuring Transaction” means (1) the transaction under the Contribution Agreement whereby Chromadex Inc will acquire all of the assets and liabilities of HealthSpan in exchange for One Dollar ($1.00), and (2) HealthSpan dissolving within ninety (90) days after the date hereof. Borrower hereby acknowledges and agrees that within ninety (90) days after the date hereof, Lender shall have received, in form and substance reasonably satisfactory to Lender, evidence that HealthSpan has been dissolved and any remaining assets of HealthSpan have been contributed to Chromadex Inc.

3.Release by HealthSpan.

(a)FOR GOOD AND VALUABLE CONSIDERATION, HealthSpan hereby forever relieves, releases, and discharges Lender and its present or former employees, officers, directors, agents, representatives, attorneys, and each of them, from any and all claims, debts, liabilities, demands, obligations, promises, acts, agreements, costs and expenses, actions and causes of action, of every type, kind, nature, description or character whatsoever, whether known or unknown, suspected or unsuspected, absolute or contingent, arising out of or in any manner whatsoever connected with or related to facts, circumstances, issues, controversies or claims existing or arising from the beginning of time through and including the date of execution of this Agreement (collectively “Released Claims”). Without limiting the foregoing, the Released Claims shall include any and all liabilities or claims arising out of or in any manner whatsoever connected with or related to the Loan Documents, the Recitals hereto, any instruments, agreements or documents executed in connection with any of the foregoing or the origination, negotiation, administration, servicing and/or enforcement of any of the foregoing.

(b)By entering into this release, HealthSpan recognizes that no facts or representations are ever absolutely certain and it may hereafter discover facts in addition to or different from those which it presently knows or believes to be true, but that it is the intention of HealthSpan hereby to fully, finally and forever settle and release all matters, disputes and differences, known or unknown, suspected or unsuspected; accordingly, if HealthSpan should subsequently discover that any fact that it relied upon in entering into this release was untrue, or that any understanding of the facts was incorrect, HealthSpan shall not be entitled to set aside this release by reason thereof, regardless of any claim of mistake of fact or law or any other circumstances whatsoever. HealthSpan acknowledges that it is not relying upon and has not relied upon any representation or statement made by Lender with respect to the facts underlying this release or with regard to any of such party’s rights or asserted rights.

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(c)This release may be pleaded as a full and complete defense and/or as a cross-complaint or counterclaim against any action, suit, or other proceeding that may be instituted, prosecuted or attempted in breach of this release. HealthSpan acknowledges that the release contained herein constitutes a material inducement to Lender to enter into this Agreement, and that Lender would not have done so but for Lender’s expectation that such release is valid and enforceable in all events.

(d)HealthSpan hereby represents and warrants to Lender, and Lender is relying thereon, as follows:

(i)Except as expressly stated in this Agreement, neither Lender nor any agent, employee or representative of Lender has made any statement or representation to HealthSpan regarding any fact relied upon by HealthSpan in entering into this Agreement.

(ii)HealthSpan has made such investigation of the facts pertaining to this Agreement and all of the matters appertaining thereto, as it deems necessary.

(iii)The terms of this Agreement are contractual and not a mere recital.

(iv)This Agreement has been carefully read by HealthSpan, the contents hereof are known and understood by HealthSpan, and this Agreement is signed freely, and without duress, by HealthSpan.

(v)HealthSpan represents and warrants that it is the sole and lawful owner of all right, title and interest in and to every claim and every other matter which it releases herein, and that it has not heretofore assigned or transferred, or purported to assign or transfer, to any person, firm or entity any claims or other matters herein released. HealthSpan shall indemnify Lender, defend and hold it harmless from and against all claims based upon or arising in connection with prior assignments or purported assignments or transfers of any claims or matters released herein.

4.NO DEFENSES OF BORROWER/GENERAL RELEASE. Borrower agrees that, as of this date, it has no defenses against the obligations to pay any amounts under the Indebtedness. Each Borrower (each, a “Releasing Party”) acknowledges that Lender would not enter into this Agreementwithout Releasing Party’s assurance that it has no claims against Lender or any of Lender’s officers, directors, employees or agents. Except for the obligations arising hereafter under this Agreement and the Business Financing Agreement, each Releasing Party releases Lender, and each of Lender’s and entity’s officers, directors and employees from any known or unknown claims that Releasing Party now has against Lender of any nature, including any claims that Releasing Party, its successors, counsel, and advisors may in the future discover they would have now had if they had known facts not now known to them, whether founded in contract, in tort or pursuant to any other theory of liability, including but not limited to any claims arising out of or related to the Agreement or the transactions contemplated thereby. Releasing Party waives the provisions of California Civil Code section 1542, which states:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

The provisions, waivers and releases set forth in this section are binding upon each Releasing Party and its shareholders, agents, employees, assigns and successors in interest. The provisions, waivers and releases of this section shall inure to the benefit of Lender and its agents, employees, officers, directors, assigns and successors in interest. The provisions of this section shall survive payment in full of the Obligations, full performance of all the terms of this Agreement and the Business Financing Agreement, and/or Lender’s actions to exercise any remedy available under the Business Financing Agreement or otherwise.

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5.CONSISTENT CHANGES. The Loan Documents are each hereby amended wherever necessary to reflect the changes described above.

6.CONTINUING VALIDITY. Borrower understands and agrees that in modifying the existing Indebtedness, Lender is relying upon Borrower’s representations, warranties, and agreements, as set forth in the Loan Documents. Except as expressly modified pursuant to this Agreement, the terms of the Loan Documents remain unchanged and in full force and effect. Lender’s agreement to modifications to the existing Indebtedness pursuant to this Agreement in no way shall obligate Lender to make any future modifications to the Indebtedness. Nothing in this Agreement shall constitute a satisfaction of the Indebtedness. It is the intention of Lender and Borrower to retain as liable parties all makers and endorsers of Loan Documents, unless the party is expressly released by Lender in writing. No maker, endorser, or guarantor will be released by virtue of this Agreement. The terms of this paragraph apply not only to this Agreement, but also to any subsequent Business Financing Agreement modifications.

7.CONDITIONS. The effectiveness of this Agreement is conditioned upon Borrower’s payment of Lender’s legal fees and expenses in connection with the preparation and negotiation of this Agreement and related documents, and due diligence performed in connection therewith. The consent set forth herein are effective for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to be (a) a consent to any amendment, waiver or modification of any other term or condition of any Loan Document, or (b) otherwise prejudice any right or remedy which Lender may now have or may have in the future under or in connection with any Loan Document.

8.NOTICE OF FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, (B) THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (C) THIS WRITTEN AGREEMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

9.COUNTERSIGNATURE. This Agreement shall become effective only when executed by Lender and Borrower.

[Signature Page Follows].

3

IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement on the day and year above written.

BORROWER:
CHROMADEX CORPORATION, A DELAWARE CORPORATION
By	/s/ Kevin M. Farr
Name:	Kevin M. Farr
Title:	CFO
CHROMADEX, INC., A CALIFORNIA CORPORATION
By	/s/ Kevin M. Farr
Name:	Kevin M. Farr
Title:	CFO
CHROMADEX ANALYTICS, INC., A NEVADA CORPORATION
By	/s/ Kevin M. Farr
Name:	Kevin M. Farr
Title:	CFO
HEALTHSPAN RESEARCH LLC, A DELAWARE LIMITED LIABILITY COMPANY
By	/s/ Kevin M. Farr
Name:	Kevin M. Farr
Title:	CFO
Address for Notices: c/o Chromadex Corporation 10900 Wilshire Blvd., Suite 650 Los Angeles, California 90024 Email:   Attn:

[Signature Page to Consent To Business Financing Agreement]

4

LENDER:
WESTERN ALLIANCE BANK, AN ARIZONA CORPORATION
By	/s/ Darin Cunningham
Name:	Darin Cunningham
Title:	Vice President
Address for Notices: WESTERN ALLIANCE BANK 600 Anton Blvd., Suite 150 Costa Mesa, CA 92626 Email:  Darin Cunningham Attn:  darin.cunningham@bridgebank.com

[Signature Page to Consent To Business Financing Agreement]

5

Exhibit A

Contribution Agreement

6

EX-31.1

EXHIBIT 31.1

Certification of the Chief Executive Officer

Pursuant to

Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended,

as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Robert N. Fried, certify that:

1.	I have reviewed this Quarterly Report on Form 10−Q of ChromaDex Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a−15(e) and 15d−15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 6, 2021	/s/ ROBERT N. FRIED
	Robert N. Fried
	Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Certification of the Chief Financial Officer

Pursuant to

Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended,

as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Kevin M. Farr, certify that:

1.	I have reviewed this Quarterly Report on Form 10−Q of ChromaDex Corporation;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a−15(e) and 15d−15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 6, 2021	/s/ KEVIN M. FARR
	Kevin M. Farr
	Chief Financial Officer

EX-32.1

EXHIBIT 32.1

Certification Pursuant to 18 U.S.C. Section 1350

(as adopted pursuant to Section 906 of the Sarbanes−Oxley Act of 2002)

In connection with this Quarterly Report of ChromaDex Corporation (the “Company”) on Form 10−Q for the quarter ended March 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), we, Robert N. Fried, Chief Executive Officer of the Company, and Kevin M. Farr, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes−Oxley Act of 2002, that, to our knowledge:

1.	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 6, 2021	/s/ ROBERT N. FRIED
	Robert N. Fried
	Chief Executive Officer
	/s/ KEVIN M. FARR
	Kevin M. Farr
	Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Cover - shares	3 Months Ended
	Mar. 31, 2021	May 05, 2021
Cover [Abstract]
Entity Registrant Name	CHROMADEX CORPORATION
Entity Central Index Key	0001386570
Document Type	10-Q
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Small Business	true
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Current Reporting Status	Yes
Document Period End Date	Mar. 31, 2021
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2021
Entity Common Stock Shares Outstanding		67,932,548
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-37752
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	26-2940963
Entity Address Address Line 1	10900 Wilshire Blvd
Entity Address Address Line 2	Suite 600
Entity Address City Or Town	Los Angeles
Entity Address State Or Province	CA
Entity Address Postal Zip Code	90024
City Area Code	310
Local Phone Number	388-6706
Security 12b Title	Common Stock, $0.001 par value per share
Trading Symbol	CDXC
Security Exchange Name	NASDAQ
Entity Interactive Data Current	Yes

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Current Assets
Cash, including restricted cash of $0.2 million and $0.2 million, respectively	$ 44,691	$ 16,697
Trade receivables, net of allowances of $0.2 million and $0.2 million, respectively; Receivables from Related Party: $1.3 million and $0.9 million, respectively	4,647	2,694
Inventories	12,762	11,683
Prepaid expenses and other assets	1,119	1,145
Total current assets	63,219	32,219
Leasehold Improvements and Equipment, net	3,058	3,206
Intangible Assets, net	1,022	1,082
Right of Use Assets	1,100	1,226
Other Long-term Assets	594	625
Total assets	68,993	38,358
Current Liabilities
Accounts payable	11,693	9,445
Accrued expenses	7,328	6,133
Current maturities of operating lease obligations	485	589
Current maturities of finance lease obligations	19	31
Customer deposits	231	278
Total current liabilities	19,756	16,476
Deferred Revenue	4,441	4,441
Operating Lease Obligations, Less Current Maturities	947	997
Finance Lease Obligations, Less Current Maturities	17	20
Total liabilities	25,161	21,934
Stockholders' Equity
Common stock, $.001 par value; authorized 150,000 shares; issued and outstanding March 31, 2021 67,702 shares and December 31, 2020 61,881 shares	68	62
Additional paid-in capital	192,972	158,190
Accumulated deficit	(149,206)	(141,825)
Cumulative translation adjustments	(2)	(3)
Total stockholders' equity	43,832	16,424
Total liabilities and stockholders' equity	$ 68,993	$ 38,358

XML

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Condensed Consolidated Balance Sheets
Restricted cash	$ 0.2	$ 0.2
Trade receivables, allowances	0.2	0.2
Receivables from related party, Allowances	$ 1.3	$ 0.9
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, shares authorized (in thousands)	150,000,000	150,000,000
Common stock, shares, issued (in thousands)	67,702,000	61,881,000
Common stock, shares, outstanding (in thousands)	67,702,000	61,881,000

XML

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Condensed Consolidated Statements of Operations
Sales, net	$ 14,683	$ 14,345
Cost of sales	5,449	6,034
Gross profit	9,234	8,311
Operating expenses:
Sales and marketing	6,258	4,447
Research and development	824	919
General and administrative	9,514	8,835
Operating expenses	16,596	14,201
Operating loss	(7,362)	(5,890)
Nonoperating expense:
Interest expense, net	(19)	(12)
Nonoperating expense	(19)	(12)
Net loss	$ (7,381)	$ (5,902)
Basic and diluted loss per common share	$ (0.12)	$ (0.10)
Basic and diluted weighted average common shares outstanding	64,164	59,782

XML

Condensed Consolidated Statement of Stockholders' Equity - USD ($) shares in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Cumulative Translation Adjustments
Balance, shares at Dec. 31, 2019		59,562
Balance, amount at Dec. 31, 2019	$ 20,445,000	$ 60,000	$ 142,285,000	$ (121,900,000)	$ 0
Exercise of stock options, shares		43
Exercise of stock options, amount	132,000	$ 0	132,000	0	0
Share-based compensation	1,873,000	0	1,873,000	0	0
Net loss	(5,902,000)	$ 0	0	(5,902,000)
Balance, shares at Mar. 31, 2020		59,605
Balance, amount at Mar. 31, 2020	16,548,000	$ 60,000	144,290,000	(127,802,000)	0
Balance, shares at Dec. 31, 2020		61,881
Balance, amount at Dec. 31, 2020	16,424,000	$ 62,000	158,190,000	(141,825,000)	(3,000)
Exercise of stock options, shares		1,975
Exercise of stock options, amount	8,633,000	$ 2,000	8,631,000	0	0
Share-based compensation	1,284,000	0	1,284,000	0	0
Net loss	(7,380,000)	$ 0	0	(7,381,000)	1,000
Issuance of common stock, net of offering costs of $0.1 million, shares		3,846
Issuance of common stock, net of offering costs of $0.1 million, amount	24,871,000	$ 4,000	24,867,000	0	0
Balance, shares at Mar. 31, 2021		67,702
Balance, amount at Mar. 31, 2021	$ 43,832,000	$ 68,000	$ 192,972,000	$ (149,206,000)	$ (2,000)

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Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash Flows From Operating Activities
Net loss	$ (7,381,000)	$ (5,902,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation of leasehold improvements and equipment	221,000	214,000
Amortization of intangibles	60,000	62,000
Amortization of right of use assets	126,000	92,000
Share-based compensation expense	1,284,000	1,873,000
Allowance for doubtful trade receivables	14,000	(2,708,000)
Non-cash financing costs	28,000	23,000
Changes in operating assets and liabilities:
Trade receivables	(1,967,000)	1,326,000
Inventories	(1,079,000)	255,000
Implementation costs for cloud computing arrangement	(28,000)	0
Prepaid expenses and other assets	74,000	252,000
Accounts payable	2,248,000	(1,467,000)
Accrued expenses	1,196,000	833,000
Customer deposits and other	(47,000)	69,000
Principal payments on operating leases	(154,000)	(143,000)
Net cash used in operating activities	(5,405,000)	(5,221,000)
Cash Flows From Investing Activities
Purchases of leasehold improvements and equipment	(46,000)	(15,000)
Investment in other long-term assets	0	(5,000)
Net cash used in investing activities	(46,000)	(20,000)
Cash Flows From Financing Activities
Proceeds from issuance of common stock, net	24,871,000	0
Proceeds from exercise of stock options	8,633,000	132,000
Payment of debt issuance costs	(44,000)	(15,000)
Principal payments on finance leases	(15,000)	(80,000)
Net cash provided by financing activities	33,445,000	37,000
Net increase (decrease) in cash	27,994,000	(5,204,000)
Cash Beginning of Period, including restricted cash of $0.2 million for both 2021 and 2020	16,697,000	18,812,000
Cash Ending of Period, including restricted cash $0.2 million for both 2021 and 2020	44,691,000	13,608,000
Supplemental Disclosures of Cash Flow Information
Cash payments for interest on finance leases	1,000	6,000
Supplemental Schedule of Noncash Investing Activity
Financing lease obligation incurred for purchase of computer equipment and software	$ 0	$ 47,000

XML

Interim Financial Statements

3 Months Ended

Mar. 31, 2021

Interim Financial Statements

1. Interim Financial Statements

Note 1. Interim Financial Statements

The accompanying financial statements of ChromaDex Corporation and its wholly owned subsidiaries, ChromaDex, Inc., ChromaDex Analytics, Inc., ChromaDex Asia Limited and ChromaDex Europa B.V. (collectively referred to herein as “ChromaDex” or the “Company” or, in the first person as “we”, “us” and “our”) include all adjustments, consisting of normal recurring adjustments and accruals, that, in the opinion of the management of the Company, are necessary for a fair presentation of the Company’s financial position as of March 31, 2021 and results of operations and cash flows for the three months ended March 31, 2021 and March 31, 2020. These unaudited interim financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended December 31, 2020 appearing in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “Commission”) on March 12, 2021. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results to be achieved for the full year ending on December 31, 2021. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.

The balance sheet at December 31, 2020 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by GAAP for complete financial statements.

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Nature of Business

3 Months Ended

Mar. 31, 2021

Nature of Business

2. Nature of Business

Note 2. Nature of Business

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. ChromaDex is the innovator behind NAD+ precursor nicotinamide riboside (“NR”), commercialized as the flagship ingredient NIAGEN®. Nicotinamide riboside and other NAD+ precursors are protected by ChromaDex’s patent portfolio. ChromaDex delivers NIAGEN® as the sole active ingredient in its consumer product TRU NIAGEN®. The Company also has analytical reference standards and services segment, which focuses on natural product fine chemicals (known as “phytochemicals”) and related chemistry services.

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Liquidity

3 Months Ended

Mar. 31, 2021

Liquidity

3. Liquidity

Note 3. Liquidity

The Company's net cash outflow from operating activities was approximately $5.4 million for the three-month period ended March 31, 2021. As of March 31, 2021, cash and cash equivalents totaled approximately $44.7 million, which includes restricted cash of approximately $0.2 million.

The Company anticipates that its current cash, cash equivalents, and available line of credit up to $7.0 million from Western Alliance Bank will be sufficient to meet its projected operating plans through at least the next twelve months from the issuance date of these financial statements. The Company may, however, seek additional capital within the next twelve months, both to meet its projected operating plans within the next twelve months and/or to fund its longer-term strategic objectives. In June 2020, we filed a $125.0 million registration statement on Form S-3 with the Commission, utilizing a “shelf” registration process. Under this shelf registration process, we may sell securities from time to time, including up to $50.0 million pursuant to the At Market Issuance Sales Agreement, dated as of June 12, 2020, with B. Riley FBR, Inc. and Raymond James & Associates, Inc. (the “ATM Facility”). As of March 31, 2021, we have not sold any securities pursuant to the ATM Facility.

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Significant Accounting Policies

3 Months Ended

Mar. 31, 2021

Significant Accounting Policies

4. Significant Accounting Policies

Note 4. Significant Accounting Policies

Basis of presentation: The financial statements and accompanying notes have been prepared on a consolidated basis and reflect the consolidated financial position of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated from these financial statements. The Company’s fiscal year ends on December 31.

Recent accounting standards: In June 2016, the Financial Accounting Standards Board issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard’s main goal is to improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope. The new guidance represents significant changes to accounting for credit losses: (i) full lifetime expected credit losses will be recognized upon initial recognition of an asset in scope; (ii) the current incurred loss impairment model that recognizes losses when a probable threshold is met will be replaced with the expected credit loss impairment method without recognition threshold; and (iii) the expected credit losses estimate will be based upon historical information, current conditions, and reasonable and supportable forecasts. ASU 2016-13 introduces two distinctive credit loss impairment models: (i) current expected credit loss impairment model (Subtopic 326-20) applicable to financial assets measured at amortized cost; and (ii) available-for-sale debt securities impairment model (Subtopic 326-30). ASU 2016-13 is effective for public entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Public entities that qualify as a smaller reporting company can elect to defer compliance effective for fiscal years beginning after December 15, 2022. We are currently evaluating the impact of our pending adoption of ASU 2016-13 on our consolidated financial statements.

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Earnings Per Share Applicable to Common Stockholders

3 Months Ended

Mar. 31, 2021

Earnings Per Share Applicable to Common Stockholders

5. Earnings Per Share Applicable to Common Stockholders

Note 5. Earnings Per Share Applicable to Common Stockholders

The following table sets forth the computations of earnings per share amounts applicable to common stockholders for the three months ended March 31, 2021 and March 31, 2020:

	Three Months Ended
(In thousands, except per share data)	Mar. 31, 2021			Mar. 31, 2020
Net loss	$	(7,381	)	$	(5,902	)
Basic and diluted loss per common share	$	(0.12	)	$	(0.10	)
Basic and diluted weighted average common shares outstanding (1):		64,164			59,782
Potentially dilutive securities (2):
Stock options		10,157			12,194
Restricted stock units		92			-

______________

(1) Includes approximately 0.2 million and 0.2 million nonvested shares of restricted stock for the periods ending Mar. 31, 2021 and Mar. 31, 2020, respectively, which are participating securities that feature voting and dividend rights.

(2) Excluded from the computation of loss per share as their impact is antidilutive.

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Related Party Transactions

3 Months Ended

Mar. 31, 2021

Related Party Transactions

6. Related Party Transactions

Note 6. Related Party Transactions

Sale of consumer products

	Net sales Three months ended Mar. 31, 2021	Net sales Three months ended Mar. 31, 2020	Trade receivable at Mar. 31, 2021	Trade receivable at Dec. 31, 2020
A.S. Watson Group	$1.6 million	$1.8 million	$1.3 million	$0.9 million

*A.S. Watson Group is a related party through common ownership of an enterprise that beneficially owns more than 10% of the common stock of the Company.

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Inventories

3 Months Ended

Mar. 31, 2021

Inventories

7. Inventories

Note 7. Inventories

The amounts of major classes of inventory as of March 31, 2021 and December 31, 2020 are as follows:

(In thousands)	Mar. 31, 2021		Dec. 31, 2020
Consumer Products - Finished Goods	$	3,839	$	2,358
Consumer Products - Work in Process		4,620		5,718
Bulk ingredients		3,758		3,065
Reference standards		545		542
	$	12,762	$	11,683

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Stock Issuance

3 Months Ended

Mar. 31, 2021

Stock Issuance

8. Stock Issuance

Note 8. Stock Issuance

On February 20, 2021, the Company entered into a Securities Purchase Agreement with EverFund (the "Financing”) pursuant to which the Company agreed to sell and issue approximately 3.8 million of common stock at a price of $6.50 per share. On February 23, 2021, the Company closed the Financing and received proceeds of $24.9 million, net of offering costs.

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Leases

3 Months Ended

Mar. 31, 2021

Leases

9. Leases

Note 9. Leases

Operating Leases

As of March 31, 2021, the Company had right of use assets stemming from operating leases of approximately $1.1 million, and corresponding operating lease liabilities of approximately $1.4 million. For the three months ended March 31, 2021 and March 31, 2020, the following were expenses incurred in connection with our operating leases:

(In thousands)	For the Three Months Ended Mar. 31, 2021		For the Three Months Ended Mar. 31, 2020
Operating leases
Operating lease expense	$	154	$	120
Variable lease expense		40		69
Operating lease expense		194		189
Short-term lease rent expense		62		64
Total expense	$	256	$	253

	At Mar. 31, 2021
Weighted-average remaining lease term (years) operating leases		2.5
Weighted-average discount rate operating leases		7.0	%

Minimum future lease payments under operating leases as of March 31, 2021 are as follows:

(In thousands)
Nine Months Ending December 31, 2021	$	474
Year Ending December 31, 2022		299
Year Ending December 31, 2023		308
Year Ending December 31, 2024		310
Year Ending December 31, 2025		263
Total		1,654
Less present value discount		222
Operating lease liabilities		1,432
Less current portion		485
Long-term obligations under operating leases	$	947

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ShareBased Compensation

3 Months Ended

Mar. 31, 2021

ShareBased Compensation

10. Share-Based Compensation

Note 10. Share-Based Compensation

Equity Plans

At the discretion of the compensation committee of the Board of Directors (the “Compensation Committee”), the Company may grant options to purchase the Company’s common stock, restricted stock units and other equity awards to certain individuals from time to time. Management and the Compensation Committee determine the terms of awards which include the exercise price, vesting conditions and expiration dates at the time of grant. Expiration dates for stock options are not to exceed 10 years from their date of issuance.

The Company grants awards to recipients through the 2017 Equity Incentive Plan, as amended (the “2017 Plan”), which was approved by stockholders and the Board of Directors. As of March 31, 2021, under the 2017 Plan, the Company is authorized to issue shares subject to awards that total no more than the sum of (i) 14,500,000 new shares, (ii) approximately 384,000 unallocated shares remaining available for the grant of new awards under the Second Amended and Restated 2007 Equity Incentive Plan, (iii) any returning shares such as forfeited, cancelled, or expired shares and (iv) 500,000 shares pursuant to an inducement award. The remaining number of shares available for issuance under the 2017 Plan totaled approximately 5.6 million shares at March 31, 2021.

General Vesting Conditions

The stock option and restricted stock unit awards are generally subject to a one-year cliff vesting period after which 1/3 of the shares vest with the remaining shares vesting ratably over a two-year period subject to the passage of time. However, some stock option awards are market or performance based and vest based on certain triggering events established by the Compensation Committee.

The fair value of the Company’s stock options that are not market based is estimated at the date of grant using the Black-Scholes option pricing model. The table below outlines the weighted average assumptions for options granted during the three months ended March 31, 2021.

Three months Ended March 31, 2021
Expected term	6 years
Expected volatility		73	%
Risk-free rate		1	%
Expected dividends		0	%

Service Period Based Stock Options

The following table summarizes activity of service period-based stock options at March 31, 2021 and changes during the three months then ended (in thousands except per-share data and remaining contractual term):

				Weighted Average
						Remaining				Aggregate
	Number of			Exercise		Contractual		Fair		Intrinsic
	Shares			Price		Term (Years)		Value		Value
Outstanding at Dec. 31, 2020		10,833		$	3.96		6.8
Options Granted		593			10.29		10.0	$	6.56
Options Exercised		(1,935	)		4.37					$	12,393
Options Forfeited		(375	)		4.34
Outstanding at Mar. 31, 2021		9,116		$	4.27		7.0			$	47,278	*
Exercisable at Mar. 31, 2021		5,666		$	3.63		5.6			$	32,326	*

*The aggregate intrinsic values in the table above are based on the Company’s stock price of $9.34, which is the closing price of the Company’s stock on the last day of business for the period ended March 31, 2021.

Performance Based Stock Options

The Company also grants stock option awards that are performance based and vest based on the achievement of certain criteria established from time to time by the Compensation Committee. If these performance criteria are not met, the compensation expenses are not recognized and the expenses that have been recognized will be reversed.

The following table summarizes performance based stock options activity at March 31, 2021 and changes during the three months then ended (in thousands except per share data and remaining contractual term):

				Weighted Average
						Remaining			Aggregate
	Number of			Exercise		Contractual		Fair	Intrinsic
	Shares			Price		Term (Years)		Value	Value
Outstanding at Dec. 31, 2020		81		$	4.34		3.1
Options Granted		-			-
Options Exercised		(40	)		4.34				$	401
Options Forfeited		-			-
Outstanding at Mar. 31, 2021		41		$	4.34		2.8		$	205	*
Exercisable at Mar. 31, 2021		41		$	4.34		2.8		$	205	*

*The aggregate intrinsic values in the table above are based on the Company’s stock price of $9.34, which is the closing price of the Company’s stock on the last day of business for the period ended March 31, 2021.

Total Remaining Unamortized Compensation for Stock Options

As of March 31, 2021, there was approximately $10.0 million of total unrecognized compensation expense related to non-vested stock options granted under the plans. That cost is expected to be recognized over a weighted average period of 2 years.

Restricted Stock Units

Restricted stock unit awards are generally subject to a one-year cliff vesting period after which 1/3 of the shares vest with the remaining shares vesting ratably over a two-year period subject to the passage of time. The following table summarizes activity of restricted stock unit awards granted at March 31, 2021 and changes during the three months then ended (in thousands except per share fair value):

			Weighted Average
	Shares		Fair Value
Unvested shares at Dec. 31, 2020		-	$	-
Granted		92		11.83
Vested		-		-
Forfeited		-		-
Unvested shares at Mar. 31, 2021		92	$	11.83
Expected to Vest as of Mar. 31, 2021		92	$	11.83

Total Share-Based Compensation

Total share-based compensation expenses were as follows:

	Three months ending
(In thousands)	Mar. 31, 2021		Mar. 31, 2020
Share-based compensation expense
Cost of sales	$	40	$	33
Sales and marketing		388		232
Research and development		138		138
General and administrative		718		1,470
Total	$	1,284	$	1,873

XML

Business Segments

3 Months Ended

Mar. 31, 2021

Business Segments

11. Business Segments

Note 11. Business Segments

The Company has the following three reportable segments for the three-month period ended March 31, 2021:

· Consumer products segment: provides finished dietary supplement products that contain the Company's proprietary ingredients directly to consumers as well as to distributors.

· Ingredients segment: develops and commercializes proprietary-based ingredient technologies and supplies these ingredients as raw materials to the manufacturers of consumer products.

· Analytical reference standards and services segment: includes supply of phytochemical reference standards and other research and development services.

The “Corporate and other” classification includes corporate items not allocated by the Company to each reportable segment. Further, there are no intersegment sales that require elimination. The Company evaluates performance and allocates resources based on reviewing gross margin by reportable segment.

Three months ended	Consumer				Analytical Reference
March 31, 2021	Products		Ingredients		Standards and		Corporate
(In thousands)	segment		segment		Services segment		and other			Total
Net sales	$	12,437	$	1,315	$	931	$	-		$	14,683
Cost of sales		4,203		563		683		-			5,449
Gross profit		8,234		752		248		-			9,234
Operating expenses:
Sales and marketing		6,111		10		137		-			6,258
Research and development		751		73		-		-			824
General and administrative		-		-		-		9,514			9,514
Operating expenses		6,862		83		137		9,514			16,596
Operating income (loss)	$	1,372	$	669	$	111	$	(9,514	)	$	(7,362	)

Three months ended	Consumer					Analytical Reference
March 31, 2020	Products		Ingredients			Standards and			Corporate
(In thousands)	segment		segment			Services segment			and other			Total
Net sales	$	11,144	$	2,475		$	726		$	-		$	14,345
Cost of sales		4,302		1,056			676			-			6,034
Gross profit		6,842		1,419			50			-			8,311
Operating expenses:
Sales and marketing		4,409		(84	)		122			-			4,447
Research and development		782		137			-			-			919
General and administrative		-		-			-			8,835			8,835
Operating expenses		5,191		53			122			8,835			14,201
Operating income (loss)	$	1,651	$	1,366		$	(72	)	$	(8,835	)	$	(5,890	)

	Consumer				Analytical Reference
At March 31, 2021	Products		Ingredients		Standards and		Corporate
(In thousands)	segment		segment		Services segment		and other		Total
Total assets	$	13,353	$	4,692	$	822	$	50,126	$	68,993

	Consumer				Analytical Reference
At December 31, 2020	Products		Ingredients		Standards and		Corporate
(In thousands)	segment		segment		Services segment		and other		Total
Total assets	$	11,567	$	3,701	$	802	$	22,288	$	38,358

Disaggregation of Revenue

We disaggregate our revenue from contracts with customers by type of goods or services for each of our segments, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. See details in the tables below.

Three Months Ended March 31, 2021 (In thousands)	Consumer Products Segment		Ingredients Segment		Analytical Reference Standards and Services Segment		Total
TRU NIAGEN , Consumer Product	$	12,437	$	-	$	-	$	12,437
NIAGEN Ingredient		-		1,203		-		1,203
Subtotal NIAGEN Related	$	12,437	$	1,203	$	-	$	13,640
Other Ingredients		-		112		-		112
Reference Standards		-		-		800		800
Consulting and Other		-		-		131		131
Subtotal Other Goods and Services	$	-	$	112	$	931	$	1,043
Total Net Sales	$	12,437	$	1,315	$	931	$	14,683

Three Months Ended March 31, 2020 (In thousands)	Consumer Products Segment		Ingredients Segment		Analytical Reference Standards and Services Segment		Total
TRU NIAGEN , Consumer Product	$	11,144	$	-	$	-	$	11,144
NIAGEN Ingredient		-		1,961		-		1,961
Subtotal NIAGEN Related	$	11,144	$	1,961	$	-	$	13,105
Other Ingredients		-		514		-		514
Reference Standards		-		-		673		673
Consulting and Other		-		-		53		53
Subtotal Other Goods and Services	$	-	$	514	$	726	$	1,240
Total Net Sales	$	11,144	$	2,475	$	726	$	14,345

Disclosure of Major Customers

Major customers who accounted for more than 10% of the Company’s total sales were as follows:

	Three months ended
Major Customers	Mar. 31, 2021			Mar. 31, 2020
A.S. Watson Group - Related Party		10.6	%		12.7	%
Life Extension	*				10.4	%

* Represents less than 10%.

Major accounts which had more than 10% of the Company’s total trade receivables were as follows:

	Percentage of the Company's Total Trade Receivables
Major Customers	At March 31, 2021			At December 31, 2020
A.S. Watson Group - Related Party		29.0	%		31.9	%
Matakana Health		17.3	%		11.1	%
Life Extension		16.0	%		17.7	%
Amazon Marketplaces		15.7	%		12.0	%

* Represents less than 10%.    

XML

Commitments and Contingencies

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies

12. Commitments and Contingencies

Note 12. Commitments and Contingencies

Legal proceedings

1. Elysium Health, LLC

(A) California Action

On December 29, 2016, ChromaDex, Inc. filed a complaint in the United States District Court for the Central District of California, naming Elysium Health, Inc. (together with Elysium Health, LLC, “Elysium”) as defendant (the “Complaint”). On January 25, 2017, Elysium filed an answer and counterclaims in response to the Complaint (together with the Complaint, the “California Action”). Over the course of the California Action, the parties have each filed amended pleadings several times and have each engaged in several rounds of motions to dismiss and one round of motion for judgment on the pleadings with respect to various claims. Most recently, on November 27, 2018, ChromaDex, Inc. filed a fifth amended complaint that added an individual, Mark Morris, as a defendant. Elysium and Morris (“the Defendants”) moved to dismiss on December 21, 2018. The court denied Defendants’ motion on February 4, 2019. Defendants filed their answer to ChromaDex, Inc.’s fifth amended complaint on February 19, 2019. ChromaDex, Inc. filed an answer to Elysium’s restated counterclaims on March 5, 2019. Discovery closed on August 9, 2019.

On August 16, 2019, the parties filed motions for partial summary judgment as to certain claims and counterclaims. The parties filed opposition briefs on August 28, 2019, and reply briefs on September 4, 2019. On October 9, 2019, among other things, the court vacated the previously scheduled trial date, ordered supplemental briefing with respect to certain issues related to summary judgment. Elysium filed its opening supplemental brief on October 30, 2019, ChromaDex filed its opening supplemental brief on November 18, 2019, and Elysium filed a reply brief on November 27, 2019, and the court heard argument on January 13, 2020. On January 16, 2020, the court granted both parties’ motions for summary judgment in part and denied both in part. On ChromaDex’s motion, the court granted summary judgment in favor of ChromaDex on Elysium’s counterclaims for (i) breach of contract related to manufacturing NIAGEN® according to the defined standard, selling NIAGEN and ingredients that are substantially similar to pterostilbene to other customers, distributing the NIAGEN® product specifications, and failing to provide information concerning the quality and identity of NIAGEN®, and (ii) breach of the implied covenant of good faith and fair dealing. The court denied summary judgment on Elysium’s counterclaims for (i) fraudulent inducement of the Trademark License and Royalty Agreement, dated February 3, 2014, by and between ChromaDex, Inc. and Elysium (the “License Agreement”), (ii) patent misuse, and (iii) unjust enrichment. On Elysium’s motion, the court granted summary judgment in favor of Elysium on ChromaDex’s claim for damages related to $110,000 in avoided costs arising from documents that Elysium used in violation of the Supply Agreement, dated February 3, 2014, by and between ChromaDex, Inc. and Elysium, as amended (the “NIAGEN® Supply Agreement”). The court denied summary judgment on Elysium’s counterclaim for breach of contract related to certain refunds or credits to Elysium. The court also denied summary judgment on ChromaDex’s breach of contract claim against Morris and claims for disgorgement of $8.3 million in Elysium’s resale profits, $600,000 for a price discount received by Elysium, and $684,781 in Morris’s compensation.

Following the court’s January 16, 2020 order, the claims that ChromaDex, Inc. presently asserts in the California Action, among other allegations, are that (i) Elysium breached the Supply Agreement, dated June 26, 2014, by and between ChromaDex, Inc. and Elysium (the “pTeroPure® Supply Agreement”), by failing to make payments to ChromaDex, Inc. for purchases of pTeroPure® and by improper disclosure of confidential ChromaDex, Inc. information pursuant to the pTeroPure® Supply Agreement, (ii) Elysium breached the NIAGEN® Supply Agreement, by failing to make payments to ChromaDex, Inc. for purchases of NIAGEN®, (iii) Defendants willfully and maliciously misappropriated ChromaDex, Inc. trade secrets concerning its ingredient sales business under both the California Uniform Trade Secrets Act and the Federal Defend Trade Secrets Act, (iv) Morris breached two confidentiality agreements he signed by improperly stealing confidential ChromaDex, Inc. documents and information, (v) Morris breached his fiduciary duty to ChromaDex, Inc. by lying to and competing with ChromaDex, Inc. while still employed there, and (vi) Elysium aided and abetted Morris’s breach of fiduciary duty. ChromaDex, Inc. is seeking damages and interest for Elysium’s alleged breaches of the NIAGEN® Supply Agreement and pTeroPure® Supply Agreement and Morris’s alleged breaches of his confidentiality agreements, compensatory damages and interest, punitive damages, injunctive relief, and attorney’s fees for Defendants’ alleged willful and malicious misappropriation of ChromaDex, Inc.’s trade secrets, and compensatory damages and interest, disgorgement of all benefits received, and punitive damages for Morris’s alleged breach of his fiduciary duty and Elysium’s aiding and abetting of that alleged breach.

The claims that Elysium presently alleges in the California Action are that (i) ChromaDex, Inc. breached the NIAGEN® Supply Agreement by not issuing certain refunds or credits to Elysium, (ii) ChromaDex, Inc. fraudulently induced Elysium into entering into the License Agreement, (iv) ChromaDex, Inc.’s conduct constitutes misuse of its patent rights, and (v) ChromaDex, Inc. was unjustly enriched by the royalties Elysium paid pursuant to the License Agreement. Elysium is seeking damages for ChromaDex, Inc.’s alleged breaches of the NIAGEN® Supply Agreement, and compensatory damages, punitive damages, and/or rescission of the License Agreement and restitution of any royalty payments conveyed by Elysium pursuant to the License Agreement, and a declaratory judgment that ChromaDex, Inc. has engaged in patent misuse.

On January 17, 2020, Elysium moved to substitute its counsel. The same day, the court ordered hearing on that motion for January 21, 2020, and granted Elysium’s motion at the hearing. On January 23, 2020, the court issued a scheduling order that, among other things, set trial on the remaining claims to begin on May 12, 2020. On March 19, 2020, in light of the global COVID-19 pandemic and ongoing private mediation efforts, the parties jointly stipulated to adjourn the trial date. The court vacated the trial date on March 20, 2020. The court held a telephonic status conference on June 9, 2020, during which the court indicated that it will reschedule the jury trial as soon as conditions permit. On November 4, 2020, the parties submitted a joint status report indicating that they will propose a new trial date as soon as the court announces that it will resume jury trials. On November 18, 2020, the court set trial to begin on September 21, 2021.

On December 11, 2020, Elysium filed a “Notice of Correction of Depositions” related to the depositions of its chief executive officer, Eric Marcotulli, and chief operating officer, Daniel Alminana, both taken in March 2019. On March 8, 2021, based in part on information that Elysium submitted under seal with that notice, ChromaDex, Inc. filed a motion for sanctions or, in the alternative, reconsideration of the court’s January 16, 2020 order regarding summary judgment, in which ChromaDex, Inc. moved to dismiss Elysium’s third, fourth, and fifth counterclaims. Elysium’s opposition brief was filed on March 22, 2021. ChromaDex, Inc. filed its reply brief on March 29, 2021. On April 27, 2021, the court denied ChromaDex, Inc’s motion for terminating sanctions, but concluded that the evidence at issue in the motion will be admissible at trial.

(B) Southern District of New York Action

On September 27, 2017, Elysium Health Inc. (“Elysium Health”) filed a complaint in the United States District Court for the Southern District of New York, against ChromaDex, Inc. (the “Elysium SDNY Complaint”). Elysium Health alleged in the Elysium SDNY Complaint that ChromaDex, Inc. made false and misleading statements in a citizen petition to the Food and Drug Administration it filed on or about August 18, 2017. Among other allegations, Elysium Health averred that the citizen petition made Elysium Health’s product appear dangerous, while casting ChromaDex, Inc.’s own product as safe. The Elysium SDNY Complaint asserted four claims for relief: (i) false advertising under the Lanham Act, 15 U.S.C. § 1125(a); (ii) trade libel; (iii) deceptive business practices under New York General Business Law § 349; and (iv) tortious interference with prospective economic relations. On October 26, 2017, ChromaDex, Inc. moved to dismiss the Elysium SDNY Complaint on the grounds that, inter alia, its statements in the citizen petition are immune from liability under the Noerr-Pennington Doctrine, the litigation privilege, and New York’s Anti-SLAPP statute, and that the Elysium SDNY Complaint failed to state a claim. Elysium Health opposed the motion on November 2, 2017. ChromaDex, Inc. filed its reply on November 9, 2017.

On October 26, 2017, ChromaDex, Inc. filed a complaint in the United States District Court for the Southern District of New York against Elysium Health (the “ChromaDex SDNY Complaint”). ChromaDex, Inc. alleges that Elysium Health made material false and misleading statements to consumers in the promotion, marketing, and sale of its health supplement product, Basis, and asserts five claims for relief: (i) false advertising under the Lanham Act, 15 U.S.C. §1125(a); (ii) unfair competition under 15 U.S.C. § 1125(a); (iii) deceptive practices under New York General Business Law § 349; (iv) deceptive practices under New York General Business Law § 350; and (v) tortious interference with prospective economic advantage. On November 16, 2017, Elysium Health moved to dismiss for failure to state a claim. ChromaDex, Inc. opposed the motion on November 30, 2017 and Elysium Health filed a reply on December 7, 2017.

On November 3, 2017, the Court consolidated the Elysium SDNY Complaint and the ChromaDex SDNY Complaint actions under the caption In re Elysium Health-ChromaDex Litigation, 17-cv-7394, and stayed discovery in the consolidated action pending a Court-ordered mediation. The mediation was unsuccessful. On September 27, 2018, the Court issued a combined ruling on both parties’ motions to dismiss. For ChromaDex’s motion to dismiss, the Court converted the part of the motion on the issue of whether the citizen petition is immune under the Noerr-Pennington Doctrine into a motion for summary judgment, and requested supplemental evidence from both parties, which were submitted on October 29, 2018. The Court otherwise denied the motion to dismiss. On January 3, 2019, the Court granted ChromaDex, Inc.’s motion for summary judgment under the Noerr-Pennington Doctrine and dismissed all claims in the Elysium SDNY Complaint. Elysium moved for reconsideration on January 17, 2019. The Court denied Elysium’s motion for reconsideration on February 6, 2019, and issued an amended final order granting ChromaDex, Inc.’s motion for summary judgment on February 7, 2019.

The Court granted in part and denied in part Elysium’s motion to dismiss, sustaining three grounds for ChromaDex’s Lanham Act claims while dismissing two others, sustaining the claim under New York General Business Law § 349, and dismissing the claims under New York General Business Law § 350 and for tortious interference. Elysium filed an answer and counterclaims on October 10, 2018, alleging claims for (i) false advertising under the Lanham Act, 15 U.S.C. §1125(a); (ii) unfair competition under 15 U.S.C. § 1125(a); and (iii) deceptive practices under New York General Business Law § 349. ChromaDex answered Elysium’s counterclaims on November 2, 2018.

ChromaDex, Inc. filed an amended complaint on March 27, 2019, adding new claims against Elysium Health for false advertising and unfair competition under the Lanham Act, 15 U.S.C. § 1125(a). On April 10, 2019, Elysium Health answered the amended complaint and filed amended counterclaims, also adding new claims against ChromaDex, Inc. for false advertising and unfair competition under the Lanham Act, 15 U.S.C. § 1125(a). On July 1, 2019, Elysium Health filed further amended counterclaims, adding new claims under the Copyright Act §§ 106 & 501. On February 9, 2020, ChromaDex, Inc. filed a motion for leave to amend its complaint to add additional claims against Elysium Health for false advertising and unfair competition. On February 10, 2020, Elysium Health filed a motion for leave to amend its counterclaims to identify allegedly false and misleading statements in ChromaDex’s advertising. Those motions were both granted after respective stipulations. On March 12, 2020, Elysium Health answered the second amended complaint. On March 13, 2020, ChromaDex, Inc. filed an answer and objection to Elysium Health’s third amended counterclaims.

On December 14, 2020, Elysium Health filed a motion to supplement and amend its counterclaims to add claims regarding alleged advertising related to COVID, to add an allegation about a change to the ChromaDex website, and to remove its copyright infringement claim under the Copyright Act. On January 19, 2021, the Court denied Elysium Health’s motion to add claims regarding alleged advertising related to COVID. The Court granted the unopposed requests to add an allegation about a change to ChromaDex’s website and to remove Elysium’s Copyright Act claim. Pursuant to the Court’s order, Elysium filed fourth amended counterclaims on April 21, 2021.

All discovery closed on April 23, 2021 and the deadline to submit the Joint Pretrial Report is June 22, 2021. The Court vacated a previously scheduled trial date because of COVID-19, and the Court has informed the Parties that trial will be rescheduled for November or December 2021.

The Company is unable to predict the outcome of these matters and, at this time, cannot reasonably estimate the possible loss or range of loss with respect to the legal proceedings discussed herein. As of March 31, 2021, ChromaDex, Inc. did not accrue a potential loss for the California Action or the Elysium SDNY Complaint because ChromaDex, Inc. believes that the allegations are without merit and thus it is not probable that a liability has been incurred.

(C) Delaware - Patent Infringement Action

On September 17, 2018, ChromaDex, Inc. and Trustees of Dartmouth College filed a patent infringement complaint in the United States District Court for the District of Delaware against Elysium Health, Inc. The complaint alleges that Elysium’s BASIS® dietary supplement violates U.S. Patents 8,197,807 (the “‘807 Patent”) and 8,383,086 (the “‘086 Patent”) that comprise compositions containing isolated nicotinamide riboside held by Dartmouth and licensed exclusively to ChromaDex, Inc. On October 23, 2018, Elysium filed an answer to the complaint. The answer asserts various affirmative defenses and denies that Plaintiffs are entitled to any relief.

On November 7, 2018, Elysium filed a motion to stay the patent infringement proceedings pending resolution of (1) the inter partes review of the ‘807 Patent and the ‘086 Patent before the Patent Trial and Appeal Board (“PTAB”) and (2) the outcome of the litigation in the California Action. ChromaDex, Inc. filed an opposition brief on November 21, 2018 detailing the issues with Elysium’s motion to stay. In particular, ChromaDex, Inc. argued that given claim 2 of the ‘086 Patent was only included in the PTAB’s inter partes review for procedural reasons the PTAB was unlikely to invalidate claim 2 and therefore litigation in Delaware would continue regardless. In addition, ChromaDex, Inc. argued that the litigation in the California Action is unlikely to have a significant effect on the ongoing patent litigation. After the PTAB released its written decision upholding claim 2 of the ‘086 Patent, proving right ChromaDex, Inc.’s prediction, ChromaDex, Inc. informed the Delaware court of the PTAB’s decision on January 17, 2019. On June 19, 2019, the Delaware court granted in part and denied in part Elysium’s motion, ordering that the case was stayed pending the resolution of Elysium’s patent misuse counterclaim in the California Action.

On November 1, 2019, ChromaDex, Inc. filed a motion to lift the stay due to changed circumstances in the California Action, among other reasons. Briefing on the motion was completed on November 22, 2019. On January 6, 2020, the Delaware court issued an oral order instructing the parties to submit a joint status report after the January 13, 2020 motions hearing in the California Action. The joint status report was submitted on January 30, 2020. On February 4, 2020, the Delaware court issued an order granting ChromaDex, Inc.’s motion to lift the stay and setting a scheduling conference for March 10, 2020. On March 19, 2020, the Delaware court entered a scheduling order, which, among other things, set the claim-construction hearing for December 17, 2020 and trial for the week of September 27, 2021. On April 17, 2020, ChromaDex, Inc. served infringement contentions. Elysium filed a Second Amended Answer on July 10, 2020.

On April 24, 2020, ChromaDex, Inc. moved for leave to amend the complaint to add Healthspan Research, LLC as a plaintiff. On May 5, 2020, Elysium filed its opposition to ChromaDex, Inc.’s motion for leave to amend and moved to dismiss ChromaDex, Inc. for alleged lack of standing. ChromaDex, Inc. filed its opposition to Elysium’s motion to dismiss and reply in support of its motion to amend on May 19, 2020. Elysium filed its reply in support of its motion to dismiss on May 26, 2020. The Court held a hearing on the motion for leave to amend the complaint and Elysium’s motion to dismiss on September 16, 2020. On December 15, 2020, the Court entered orders (i) granting in part and denying in part Elysium’s motion to dismiss ChromaDex, Inc. for alleged lack of standing; and (ii) denying ChromaDex, Inc.’s motion for leave to amend. ChromaDex, Inc. filed a motion for reargument on December 29, 2020. Elysium filed a response to the motion for reargument on January 28, 2021. ChromaDex, Inc. filed a motion for leave to file a reply on February 8, 2021. Elysium filed a response to the motion for leave to file a reply on February 12, 2021. ChromaDex, Inc. filed a reply to the motion for leave to file a reply on February 19, 2021. The Court granted the motion for leave to file the reply on April 26, 2021, and denied the motion for reargument on April 27, 2021.

On July 22, 2020 the parties filed a Joint Claim Construction Chart and respective motions for claim construction. The parties filed a Joint Claim Construction Brief on November 5, 2020. The Court held a Markman hearing on claim-construction issues on December 17, 2020. The Court entered a claim-construction ruling on January 5, 2021.

Fact discovery closed on January 26, 2021. Opening expert reports were served on February 9, 2021. Responsive expert reports were served on March 9, 2021. Reply expert reports were served on March 30, 2021. Both parties filed dispositive and Daubert motions on April 27, 2021.

Trial is scheduled for September 27-30, 2021.

2. Other

(A) Employee Dispute

On September 25, 2020, the Company received a demand letter from a former employee, alleging a series of employment-related claims against the Company after the employee was laid off as part of a company restructuring. The employee alleges she was harassed and, ultimately, terminated in retaliation for taking intermittent leave, under the Family and Medical Leave Act. No lawsuit has been filed to date. The Company believes these claims are without merit and is seeking to amicably resolve the matter pre-lawsuit. The Company does not anticipate that the ultimate resolution of this matter will be material to the Company’s operations, financial condition or cash flows.

(B) Rejuvenation Therapeutics

On September 15, 2020, the Company received a letter from a customer, Rejuvenation Therapeutics Corp. (“Rejuvenation”), and has received subsequent correspondence, requesting a full refund of approximately $1.6 million of NIAGEN® it purchased, alleging breaches of the supply agreement between the parties. The Company believes these claims are without merit and is seeking to amicably resolve the matter pre-lawsuit. As of March 31, 2021, the Company has recorded a return liability of approximately $0.5 million, which the Company has offered to settle in good faith. The Company does not anticipate that the ultimate resolution of this matter will be material to the Company’s operations, financial condition or cash flows.

(C) Thorne Research, Inc.

On or around September 28, 2020, Thorne Research, Inc. (“Thorne”) provided notice to ChromaDex, Inc. that it intended to terminate its March 25, 2019 Supply Agreement and subsequent amendments with ChromaDex, Inc., effective as of December 31, 2020. A discussion between ChromaDex, Inc. and Thorne followed, and Thorne asserted that it could challenge the ‘086 Patent in an inter partes review (“IPR”) proceeding on the basis of prior art, but would be willing to enter into a mutual existence agreement that would permit Thorne to source NR from a third party. Thorne did not offer substantive information supporting a prior art claim or about the nature of the threatened IPR.

On December 1, 2020, Thorne filed a petition for IPR of the ‘086 Patent. Dartmouth’s preliminary response to the petition was filed on on March 15, 2021. On February 1, 2021, Thorne filed a petition for IPR of the ‘807 Patent. Dartmouth’s preliminary response to the petition is due on May 18, 2021.

From time to time we are involved in legal proceedings arising in the ordinary course of our business. We believe that there is no other litigation pending that is likely to have, individually or in the aggregate, a material adverse effect on our financial condition or results of operations.

Contingencies

(A) In September 2019, the Company received a letter from a licensor stating that the Company owed the licensor $1.6 million plus interest of sublicense fees as a result of the Company entering into the supply agreement with a customer. After reviewing the relevant facts and circumstances, the Company believes that the Company does not owe any sublicense fees to the licensor and has corresponded with the licensor to resolve the matter. The Company does not believe that the ultimate resolution of this matter will be material to the Company’s results of operations, financial condition or cash flows.

(B) On November 17, 2020, the Company received a warning letter (“the Letter”) from the United States Food and Drug Administration (“FDA”) and Federal Trade Commission (“FTC”). The Letter references statements issued by the Company relating to preclinical and clinical research results involving nicotinamide riboside and COVID-19. The statements were included in press releases and referenced in social media posts.

On November 18, 2020, the Company provided a response to the Letter stating that the Company disagrees with the assertion in the Letter that the Company’s products are intended to mitigate, prevent, treat, diagnose or cure COVID-19 in violation of certain sections of the FD&C Act or that they were unsubstantiated under the FTC Act, but rather accurately reflected the  state of the science and the results of scientific research. Nonetheless, the Company also responded that it had deleted social media references to the studies and removed related press releases from its website.

On April 30, 2021, the Company received an additional warning letter (the “Second Letter”) from only the FTC.  The Second Letter references the original Letter, and cites additional statements issued by the Company and certain officers and advisors of the Company relating to nicotinamide riboside and scientific studies related to COVID-19.  The Second Letter asserts that such statements contain coronavirus-related prevention or treatment claims and are deceptive in violation of the Federal Trade Commission Act.

On May 4, 2021, the Company provided a response to the Second Letter stating that it had removed the social posts from its accounts identified in the Second Letter and requested that third parties remove the post from their accounts that were identified in the Second Letter. The Company stated that the press release identified in the Second Letter is appropriate and not a deceptive act or practice under applicable law. The Company affirmed its belief in the need to accurately report on the scientific results of its studies to its investors, and welcomed the opportunity to discuss its R&D program with the FTC, and receive guidance on future releases.

The Company does not believe that the ultimate resolution of this matter will be material to the Company’s results of operations, financial condition or cash flows.

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2021

Significant Accounting Policies

Basis of presentation

Basis of presentation: The financial statements and accompanying notes have been prepared on a consolidated basis and reflect the consolidated financial position of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated from these financial statements. The Company’s fiscal year ends on December 31.

Recent accounting standards

Recent accounting standards: In June 2016, the Financial Accounting Standards Board issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The standard’s main goal is to improve financial reporting by requiring earlier recognition of credit losses on financing receivables and other financial assets in scope. The new guidance represents significant changes to accounting for credit losses: (i) full lifetime expected credit losses will be recognized upon initial recognition of an asset in scope; (ii) the current incurred loss impairment model that recognizes losses when a probable threshold is met will be replaced with the expected credit loss impairment method without recognition threshold; and (iii) the expected credit losses estimate will be based upon historical information, current conditions, and reasonable and supportable forecasts. ASU 2016-13 introduces two distinctive credit loss impairment models: (i) current expected credit loss impairment model (Subtopic 326-20) applicable to financial assets measured at amortized cost; and (ii) available-for-sale debt securities impairment model (Subtopic 326-30). ASU 2016-13 is effective for public entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Public entities that qualify as a smaller reporting company can elect to defer compliance effective for fiscal years beginning after December 15, 2022. We are currently evaluating the impact of our pending adoption of ASU 2016-13 on our consolidated financial statements.

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Earnings Per Share Applicable to Common Stockholders (Tables)

3 Months Ended

Mar. 31, 2021

Earnings Per Share Applicable to Common Stockholders

Schedule of loss per share amounts applicable to common stockholders

	Three Months Ended
(In thousands, except per share data)	Mar. 31, 2021			Mar. 31, 2020
Net loss	$	(7,381	)	$	(5,902	)
Basic and diluted loss per common share	$	(0.12	)	$	(0.10	)
Basic and diluted weighted average common shares outstanding (1):		64,164			59,782
Potentially dilutive securities (2):
Stock options		10,157			12,194
Restricted stock units		92			-

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Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2021

Related Party Transactions

Schedule of net amount of assets and liabilities acquired

	Net sales Three months ended Mar. 31, 2021	Net sales Three months ended Mar. 31, 2020	Trade receivable at Mar. 31, 2021	Trade receivable at Dec. 31, 2020
A.S. Watson Group	$1.6 million	$1.8 million	$1.3 million	$0.9 million

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Inventories (Tables)

3 Months Ended

Mar. 31, 2021

Inventories

Schedule of inventories

(In thousands)	Mar. 31, 2021		Dec. 31, 2020
Consumer Products - Finished Goods	$	3,839	$	2,358
Consumer Products - Work in Process		4,620		5,718
Bulk ingredients		3,758		3,065
Reference standards		545		542
	$	12,762	$	11,683

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Leases (Tables)

3 Months Ended

Mar. 31, 2021

Leases

Schedule of operating leases expenses

(In thousands)	For the Three Months Ended Mar. 31, 2021		For the Three Months Ended Mar. 31, 2020
Operating leases
Operating lease expense	$	154	$	120
Variable lease expense		40		69
Operating lease expense		194		189
Short-term lease rent expense		62		64
Total expense	$	256	$	253

Schedule of operating lease additional lease information

	At Mar. 31, 2021
Weighted-average remaining lease term (years) operating leases		2.5
Weighted-average discount rate operating leases		7.0	%

Schedule of minimum future lease payments under operating leases

(In thousands)
Nine Months Ending December 31, 2021	$	474
Year Ending December 31, 2022		299
Year Ending December 31, 2023		308
Year Ending December 31, 2024		310
Year Ending December 31, 2025		263
Total		1,654
Less present value discount		222
Operating lease liabilities		1,432
Less current portion		485
Long-term obligations under operating leases	$	947

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ShareBased Compensation (Tables)

3 Months Ended

Mar. 31, 2021

ShareBased Compensation

Schedule of Restricted stock awards granted to employees

			Weighted Average
	Shares		Fair Value
Unvested shares at Dec. 31, 2020		-	$	-
Granted		92		11.83
Vested		-		-
Forfeited		-		-
Unvested shares at Mar. 31, 2021		92	$	11.83
Expected to Vest as of Mar. 31, 2021		92	$	11.83

Schedule of weighted average assumptions of stock options granted

Three months Ended March 31, 2021
Expected term	6 years
Expected volatility		73	%
Risk-free rate		1	%
Expected dividends		0	%

Schedule of Service Period Based Stock Option Activity

				Weighted Average
						Remaining				Aggregate
	Number of			Exercise		Contractual		Fair		Intrinsic
	Shares			Price		Term (Years)		Value		Value
Outstanding at Dec. 31, 2020		10,833		$	3.96		6.8
Options Granted		593			10.29		10.0	$	6.56
Options Exercised		(1,935	)		4.37					$	12,393
Options Forfeited		(375	)		4.34
Outstanding at Mar. 31, 2021		9,116		$	4.27		7.0			$	47,278	*
Exercisable at Mar. 31, 2021		5,666		$	3.63		5.6			$	32,326	*

Schedule of Performance Based Stock Options

				Weighted Average
						Remaining			Aggregate
	Number of			Exercise		Contractual		Fair	Intrinsic
	Shares			Price		Term (Years)		Value	Value
Outstanding at Dec. 31, 2020		81		$	4.34		3.1
Options Granted		-			-
Options Exercised		(40	)		4.34				$	401
Options Forfeited		-			-
Outstanding at Mar. 31, 2021		41		$	4.34		2.8		$	205	*
Exercisable at Mar. 31, 2021		41		$	4.34		2.8		$	205	*

Schedule of performance based stock option activity

Total share-based compensation expenses were as follows:

	Three months ending
(In thousands)	Mar. 31, 2021		Mar. 31, 2020
Share-based compensation expense
Cost of sales	$	40	$	33
Sales and marketing		388		232
Research and development		138		138
General and administrative		718		1,470
Total	$	1,284	$	1,873

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Business Segments (Tables)

3 Months Ended

Mar. 31, 2021

Business Segments

Schedule of business segmentation

Three months ended	Consumer				Analytical Reference
March 31, 2021	Products		Ingredients		Standards and		Corporate
(In thousands)	segment		segment		Services segment		and other			Total
Net sales	$	12,437	$	1,315	$	931	$	-		$	14,683
Cost of sales		4,203		563		683		-			5,449
Gross profit		8,234		752		248		-			9,234
Operating expenses:
Sales and marketing		6,111		10		137		-			6,258
Research and development		751		73		-		-			824
General and administrative		-		-		-		9,514			9,514
Operating expenses		6,862		83		137		9,514			16,596
Operating income (loss)	$	1,372	$	669	$	111	$	(9,514	)	$	(7,362	)

Three months ended	Consumer					Analytical Reference
March 31, 2020	Products		Ingredients			Standards and			Corporate
(In thousands)	segment		segment			Services segment			and other			Total
Net sales	$	11,144	$	2,475		$	726		$	-		$	14,345
Cost of sales		4,302		1,056			676			-			6,034
Gross profit		6,842		1,419			50			-			8,311
Operating expenses:
Sales and marketing		4,409		(84	)		122			-			4,447
Research and development		782		137			-			-			919
General and administrative		-		-			-			8,835			8,835
Operating expenses		5,191		53			122			8,835			14,201
Operating income (loss)	$	1,651	$	1,366		$	(72	)	$	(8,835	)	$	(5,890	)

	Consumer				Analytical Reference
At March 31, 2021	Products		Ingredients		Standards and		Corporate
(In thousands)	segment		segment		Services segment		and other		Total
Total assets	$	13,353	$	4,692	$	822	$	50,126	$	68,993

	Consumer				Analytical Reference
At December 31, 2020	Products		Ingredients		Standards and		Corporate
(In thousands)	segment		segment		Services segment		and other		Total
Total assets	$	11,567	$	3,701	$	802	$	22,288	$	38,358

Schedule of disaggregation of revenue

Three Months Ended March 31, 2021 (In thousands)	Consumer Products Segment		Ingredients Segment		Analytical Reference Standards and Services Segment		Total
TRU NIAGEN , Consumer Product	$	12,437	$	-	$	-	$	12,437
NIAGEN Ingredient		-		1,203		-		1,203
Subtotal NIAGEN Related	$	12,437	$	1,203	$	-	$	13,640
Other Ingredients		-		112		-		112
Reference Standards		-		-		800		800
Consulting and Other		-		-		131		131
Subtotal Other Goods and Services	$	-	$	112	$	931	$	1,043
Total Net Sales	$	12,437	$	1,315	$	931	$	14,683

Three Months Ended March 31, 2020 (In thousands)	Consumer Products Segment		Ingredients Segment		Analytical Reference Standards and Services Segment		Total
TRU NIAGEN , Consumer Product	$	11,144	$	-	$	-	$	11,144
NIAGEN Ingredient		-		1,961		-		1,961
Subtotal NIAGEN Related	$	11,144	$	1,961	$	-	$	13,105
Other Ingredients		-		514		-		514
Reference Standards		-		-		673		673
Consulting and Other		-		-		53		53
Subtotal Other Goods and Services	$	-	$	514	$	726	$	1,240
Total Net Sales	$	11,144	$	2,475	$	726	$	14,345

Schedule of disclosure of major customers

	Three months ended
Major Customers	Mar. 31, 2021			Mar. 31, 2020
A.S. Watson Group - Related Party		10.6	%		12.7	%
Life Extension	*				10.4	%

	Percentage of the Company's Total Trade Receivables
Major Customers	At March 31, 2021			At December 31, 2020
A.S. Watson Group - Related Party		29.0	%		31.9	%
Matakana Health		17.3	%		11.1	%
Life Extension		16.0	%		17.7	%
Amazon Marketplaces		15.7	%		12.0	%

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Liquidity (Details Narrative) - USD ($) $ in Thousands		3 Months Ended
	Jun. 12, 2020	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Jun. 30, 2020
Net cash used in operating activities		$ (5,405)	$ (5,221)
Restricted cash		200		$ 200
Additional capital		192,972		$ 158,190
B. Riley FBR, Inc [Member]
Additional capital					$ 125,000
Registration process	$ 50,000
Liquidity [Member]
Net cash used in operating activities		5,400
Cash and cash equivalents		44,700
Restricted cash		200
Line of credit		$ 7,000

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Earnings Per Share Applicable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Net loss	$ (7,381)	$ (5,902)
Basic and diluted loss per common share	$ (0.12)	$ (0.10)
Basic and diluted weighted average common shares outstanding	64,164,000	59,782,000
Stock Option [Member]
Potentially dilutive securities (in thousands)	10,157,000	12,194,000
Restricted stock units	92,000	0

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Earnings Per Share Applicable to Common Stockholders (Details Narrative) - shares shares in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Earnings Per Share Applicable to Common Stockholders
Nonvested shares of restricted stock	0.2	0.2

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Related Party Transactions (Details) - Major Customer [Member] - A.S. Watson Group [Member] - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Net sales	$ 1.6	$ 1.8
Trade receivable	$ 1.3	$ 0.9

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Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Inventories
Consumer products - finished goods	$ 3,839	$ 2,358
Consumer Products - work in process	4,620	5,718
Bulk ingredients	3,758	3,065
Reference standards	545	542
Inventories	$ 12,762	$ 11,683

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Stock Issuance (Details Narrative) - USD ($) $ / shares in Units, shares in Millions	1 Months Ended		3 Months Ended
	Feb. 23, 2021	Feb. 20, 2021	Mar. 31, 2021	Mar. 31, 2020
Proceeds from issuance of stock			$ 24,871,000	$ 0
Securities Purchase Agreement [Member]
Shares issued to related parties, shares		3.8
Shares issued price per share		$ 6.50
Proceeds from issuance of stock	$ 24,900,000

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Leases (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Operating leases
Operating lease expense	$ 154	$ 120
Variable lease expense	40	69
Operating lease expense	194	189
Short-term lease rent expense	62	64
Total expense	$ 256	$ 253

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Leases (Details 1)	9 Months Ended
	Sep. 30, 2020
Leases
Weighted-average remaining lease term (years) operating leases	2 years 6 months
Weighted-average discount rate operating leases	7.00%

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Leases (Details 2) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Leases
Nine months ending December 31, 2021	$ 474
Year Ending December 31, 2022	299
Year Ending December 31, 2023	308
Year Ending December 31, 2024	310
Year Ending December 31, 2025	263
Total	1,654
Less present value discount	222
Operating lease liabilities	1,432
Less current portion	485
Long-term obligations under operating leases	$ 947	$ 997

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Leases (Details Narrative) $ in Millions	Mar. 31, 2021 USD ($)
Leases
Operating lease - right of use assets	$ 1.1
Operating lease liability	$ 1.4

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ShareBased Compensation (Details)	3 Months Ended
	Mar. 31, 2021
ShareBased Compensation
Expected term	6 years
Expected volatility	73.00%
Risk-free rate	1.00%
Expected dividends	0.00%

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ShareBased Compensation (Details 1) - Service Period Based Stock Options [Member] $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($) $ / shares shares
Number of shares
Number of shares, Outstanding, Beginning balance | shares	10,833
Number of shares, Outstanding, granted | shares	593
Number of shares, Options Exercised | shares	(1,935)
Number of shares, Outstanding, Forfeited | shares	(375)
Number of shares, ending balance | shares	9,116
Number of shares, ending balance Exercised | shares	5,666
Weighted average exercise price
Weighted average exercise price, outstanding begining balance	$ 3.96
Weighted average exercise price, granted	10.29
Weighted average exercise price, exercised	4.37
Weighted average exercise price, options forfeited	4.34
Weighted average exercise price, outstanding ending balance	4.27
Weighted average exercise price, exercisable ending balance	$ 3.63
Weighted average contractual term
Weighted average remaining contractual term, beginning balance	6 years 9 months 18 days
Weighted average remaining contractual term, granted	10 years
Weighted average remaining contractual term, ending balance	7 years
Weighted average remaining contractual term, Exercisable balance	5 years 7 months 6 days
Grant date fair value
fair value granted	$ 6.56
Weighted average intrinsic value
Weighted average intrinsic value, exercised | $	$ 12,393
Weighted average intrinsic value, ending balance | $	47,278
Weighted average intrinsic value, exercisable, ending balance | $	$ 32,326

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ShareBased Compensation (Details 2) - Performance Based Stock Options [Member] $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2021 USD ($) $ / shares shares
Number of shares, Outstanding, Beginning balance | shares	81,000
Number of shares, Options Granted | shares	0
Number of shares, Options Exercised | shares	(40,000)
Number of shares, Outstanding, Forfeited | shares	0
Number of shares, ending balance Exercised | shares	41,000
Number of shares, ending balance | shares	41,000
Weighted average exercise price
Weighted average exercise price, outstanding begining balance | $ / shares	$ 4.34
Weighted average exercise price, granted | $ / shares	0
Weighted average exercise price, exercised | $ / shares	4.34
Weighted average exercise price, outstanding ending balance | $ / shares	4.34
Weighted average exercise price, options forfeited | $ / shares	0
Weighted average exercise price, exercisable ending balance | $ / shares	$ 4.34
Weighted average contractual term
Weighted average remaining contractual term, beginning balance	3 years 1 month 6 days
Weighted average remaining contractual term, ending balance	2 years 9 months 18 days
Weighted average remaining contractual term, Exercisable balance	2 years 9 months 18 days
Weighted average intrinsic value
Weighted average intrinsic value, exercised | $	$ 401
Weighted average intrinsic value, ending balance | $	205
Weighted average intrinsic value, exercisable, ending balance | $	$ 205

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ShareBased Compensation (Details 3)	3 Months Ended
	Mar. 31, 2021 $ / shares shares
Number of unvested shares
Unvested shares, beginning balance | shares	0
Unvested shares, granted | shares	92,000
Unvested shares, vested | shares	0
Unvested shares, forfeited | shares	0
Unvested shares, ending balance | shares	92,000
Unvested shares, expected to vest | shares	92,000
Unvested Weighted Average Fair Value
Unvested Weighted Average Fair Value, beginning balance | $ / shares	$ 0
Unvested Weighted Average Fair Value, granted | $ / shares	11.83
Unvested Weighted Average Fair Value, vested | $ / shares	0
Unvested Weighted Average Fair Value, forfeited | $ / shares	0
Unvested Weighted Average Fair Value, ending balance | $ / shares	11.83
Unvested Weighted Average Fair Value, expected to vest | $ / shares	$ 11.83

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ShareBased Compensation (Details 4) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Share-based compensation	$ 1,284	$ 1,873
Cost of Sales [Member]
Share-based compensation	40	33
Sales and Marketing [Member]
Share-based compensation	388	232
Research and Development [Member]
Share-based compensation	138	138
General and Administrative [Member]
Share-based compensation	$ 718	$ 1,470

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ShareBased Compensation (Details Narrative) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($) $ / shares
ShareBased Compensation
Equity incentive plan, description	under the 2017 Plan, the Company is authorized to issue shares subject to awards that total no more than the sum of (i) 14,500,000 new shares, (ii) approximately 384,000 unallocated shares remaining available for the grant of new awards under the Second Amended and Restated 2007 Equity Incentive Plan, (iii) any returning shares such as forfeited, cancelled, or expired shares and (iv) 500,000 shares pursuant to an inducement award. The remaining number of shares available for issuance under the 2017 Plan totaled approximately 5.6 million shares at March 31, 2021.
Share price | $ / shares	$ 9.34
Unrecognized compensation expense | $	$ 10.0
Unrecognized compensation expense recognition period	2 years

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Business Segments (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Net sales	$ 14,683	$ 14,345
Cost of sales	5,449	6,034
Gross profit	9,234	8,311
Operating expenses:
Sales and marketing	6,258	4,447
Research and development	824	919
General and administrative	9,514	8,835
Operating expenses	16,596	14,201
Operating income (loss)	(7,362)	(5,890)
Consumer Products Segment [Member]
Net sales	12,437	11,144
Cost of sales	4,203	4,302
Gross profit	8,234	6,842
Operating expenses:
Sales and marketing	6,111	4,409
Research and development	751	782
General and administrative	0	0
Operating expenses	6,862	5,191
Operating income (loss)	1,372	1,651
Ingredients Segment [Member]
Net sales	1,315	2,475
Cost of sales	563	1,056
Gross profit	752	1,419
Operating expenses:
Sales and marketing	10	(84)
Research and development	73	137
General and administrative	0	0
Operating expenses	83	53
Operating income (loss)	669	1,366
Analytical Reference Standards and Services Segment [Member]
Net sales	931	726
Cost of sales	683	676
Gross profit	248	50
Operating expenses:
Sales and marketing	137	122
Research and development	0	0
General and administrative	0	0
Operating expenses	137	122
Operating income (loss)	111	(72)
Corporate and Other Segment [Member]
Net sales	0	0
Cost of sales	0	0
Gross profit	0	0
Operating expenses:
Sales and marketing	0	0
Research and development	0	0
General and administrative	9,514	8,835
Operating expenses	9,514	8,835
Operating income (loss)	$ (9,514)	$ (8,835)

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Business Segments (Details 1) - USD ($) $ in Thousands	Mar. 31, 2021	Dec. 31, 2020
Total Assets	$ 68,993	$ 38,358
Consumer Products Segment [Member]
Total Assets	13,353	11,567
Ingredients Segment [Member]
Total Assets	4,692	3,701
Analytical Reference Standards and Services Segment [Member]
Total Assets	822	802
Corporate and Other Segment [Member]
Total Assets	$ 50,126	$ 22,288

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Business Segments (Details 22) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Net sales	$ 14,683	$ 14,345
TRU NIAGEN Consumer Product
Net sales	12,437	11,144
NIAGEN Ingredient
Net sales	1,203	1,961
NIAGEN Related
Net sales	13,640	13,105
Other Ingredients
Net sales	112	514
Reference Standards
Net sales	800	673
Consulting and Other
Net sales	131	53
Other Goods and Services
Net sales	1,043	1,240
Consumer Products Segment [Member]
Net sales	12,437	11,144
Consumer Products Segment [Member] | TRU NIAGEN Consumer Product
Net sales	12,437	11,144
Consumer Products Segment [Member] | NIAGEN Ingredient
Net sales	0	0
Consumer Products Segment [Member] | NIAGEN Related
Net sales	12,437	11,144
Consumer Products Segment [Member] | Other Ingredients
Net sales	0	0
Consumer Products Segment [Member] | Reference Standards
Net sales	0	0
Consumer Products Segment [Member] | Consulting and Other
Net sales	0	0
Consumer Products Segment [Member] | Other Goods and Services
Net sales	0	0
Ingredients Segment [Member]
Net sales	1,315	2,475
Ingredients Segment [Member] | TRU NIAGEN Consumer Product
Net sales	0	0
Ingredients Segment [Member] | NIAGEN Ingredient
Net sales	1,203	1,961
Ingredients Segment [Member] | NIAGEN Related
Net sales	1,203	1,961
Ingredients Segment [Member] | Other Ingredients
Net sales	112	514
Ingredients Segment [Member] | Reference Standards
Net sales	0	0
Ingredients Segment [Member] | Consulting and Other
Net sales	0	0
Ingredients Segment [Member] | Other Goods and Services
Net sales	112	514
Analytical Reference Standards and Services Segment [Member]
Net sales	931	726
Analytical Reference Standards and Services Segment [Member] | TRU NIAGEN Consumer Product
Net sales	0	0
Analytical Reference Standards and Services Segment [Member] | NIAGEN Ingredient
Net sales	0	0
Analytical Reference Standards and Services Segment [Member] | NIAGEN Related
Net sales	0	0
Analytical Reference Standards and Services Segment [Member] | Other Ingredients
Net sales	0	0
Analytical Reference Standards and Services Segment [Member] | Reference Standards
Net sales	800	673
Analytical Reference Standards and Services Segment [Member] | Consulting and Other
Net sales	131	53
Analytical Reference Standards and Services Segment [Member] | Other Goods and Services
Net sales	$ 931	$ 726

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Business Segments (Details 3)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
A.S. Watson Group [Member] | Sales Revenue, Net
Customer concentration risk	10.60%	12.70%
Trade Receivables | A.S. Watson Group [Member]
Customer concentration risk	29.00%	31.90%
Matakana Health | Trade Receivables
Customer concentration risk	17.30%	11.10%
Life Extension | Sales Revenue, Net
Customer concentration risk		10.40%
Life Extension | Trade Receivables
Customer concentration risk	16.00%	17.70%
Amazon Marketplaces | Trade Receivables
Customer concentration risk	15.70%	12.00%

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Commitments and Contingencies (Details Narrative) - USD ($)	1 Months Ended
	Sep. 15, 2020	Aug. 16, 2019	Dec. 31, 2020	Sep. 30, 2019
Owed amount				$ 1,600,000
Elysium Health, Inc.
Breach of contract, damages sought		$ 110,000
Court judgement, description		The court also denied summary judgment on ChromaDex’s breach of contract claim against Morris and claims for disgorgement of $8.3 million in Elysium’s resale profits, $600,000 for a price discount received by Elysium, and $684,781 in Morris’s compensation.
Rejuvenation Therapeutics Corp. [Member]
Refund amount	$ 1,600,000
Liability return			$ 500,000