ChromaDex
Annual Report 2016

Plain-text annual report

UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31, 2016 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. 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) (I.R.S. Employer Identification No.) 10005 Muirlands Blvd. Suite G, Irvine, California 92618 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code (949) 419-0288 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of Each Exchange on Which Registered Common Stock, $0.001 par value The NASDAQ Capital Market Securities registered pursuant to Section 12(g) of the Act: None. Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X ] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [X] 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 1934during 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 filingrequirements for the past 90 days. Yes [X] No [ ] Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required tobe submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required tosubmit and post such files). Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the bestof registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form10-K. [ ]  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See thedefinitions of “accelerated filer,” “large accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer [ ]Accelerated Filer [X]Non-accelerated filer [ ]Smaller Reporting Company [ ](Do not check if smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [X] As of July 2, 2016, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the registrant’scommon stock held by non-affiliates of the registrant was approximately $145.4 million, based on the closing price of the registrant’s common stock on theNASDAQ Capital Market on July 2, 2016. Number of shares of common stock of the registrant outstanding as of February 28, 2017: 37,907,736 DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrant’s proxy statement (the “Proxy Statement”) to be filed with the Securities and Exchange Commission (“SEC”) pursuant toRegulation 14A in connection with the registrant’s 2017 Annual Meeting of Stockholders, which will be filed subsequent to the date hereof, are incorporatedby reference into Part III of this Form 10‑K. Such Proxy Statement will be filed with the SEC not later than 120 days following the end of the registrant’s fiscalyear ended December 31, 2016.  TABLE OF CONTENTS Item PART I Cautionary Notice Regarding Forward-Looking Statements 11.Business 21A.Risk Factors 171B.Unresolved Staff Comments 322.Properties 323.Legal Proceedings 324.Mine Safety Disclosures 33 PART II 5.Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 346.Selected Financial Data 367.Management's Discussion and Analysis of Financial Condition and Results of Operations 397AQuantitative and Qualitative Disclosures About Market Risk 518.Financial Statements and Supplementary Data 529.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 859AControls and Procedures 859B.Other Information 88 PART III 10.Directors, Executive Officers and Corporate Governance 9011.Executive Compensation 9012.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 9013.Certain Relationships and Related Transactions, and Director Independence 9014.Principal Accounting Fees and Services 90 PART IV 15.Exhibits, Financial Statement Schedules 91 Signatures 92 -i-Table of Contents PART I CAUTIONARY NOTICE REGARDING FORWARD LOOKING STATEMENTS This Annual Report on Form 10-K (the “Form 10-K”) contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933,as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the safe harbor created by those sections. We may, in some cases, use words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “intend,” “may,” “plan,” “potential,” “predict,”“project,” “should,” “will,” “would” or the negative of these terms, and similar expressions that convey uncertainty of future events or outcomes to identifythese forward-looking statements. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statementsand are based upon our current expectations, beliefs, estimates and projections, and various assumptions, many of which, by their nature, are inherentlyuncertain and beyond our control. Such statements, include, but are not limited to, statements contained in this Form 10-K relating to our business, businessstrategy, products and services we may offer in the future, the outcome and impact of litigation, the timing and results of future regulatory filings, the timingand results of future clinical trials, our ability to collect from major customers, sales and marketing strategy and capital outlook. Forward-looking statementsare based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward looking statementsrelate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differmaterially from those contemplated by the forward-looking statements. They are neither statement of historical fact nor guarantees of assurance of futureperformance. We caution you therefore against relying on any of these forward-looking statements. Important factors that could cause actual results to differmaterially from those in the forward looking statements include, but are not limited to, a decline in general economic conditions nationally andinternationally; decreased demand for our products and services; market acceptance of our products; the ability to protect our intellectual property rights;impact of any litigation or infringement actions brought against us; competition from other providers and products; risks in product development; inabilityto raise capital to fund continuing operations; changes in government regulation; the ability to complete customer transactions and capital raisingtransactions, and other factors (including the risks contained in Item 1A of this Form 10-K under the heading “Risk Factors”) relating to our industry, ouroperations and results of operations and any businesses that may be acquired by us. Should one or more of these risks or uncertainties materialize, or shouldthe underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them, nor can weassess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially fromthose contained in any forward-looking statements we may make. Given these uncertainties, you should not place undue reliance on these forward-lookingstatements. We cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, we undertake noobligation to and do not intend to update any of the forward-looking statements to conform these statements to actual results. -1-Table of Contents Item 1. Business Company Overview The business of ChromaDex Corporation is conducted by our principal subsidiaries, ChromaDex, Inc. and ChromaDex Analytics, Inc. ChromaDexCorporation and its subsidiaries (collectively referred to herein as “ChromaDex” or the “Company” or, in the first person as “we” “us” and “our”) is a naturalproducts company that leverages its complementary business units to discover, acquire, develop and commercialize patented and proprietary ingredienttechnologies that address the dietary supplement, food, beverage, skin care and pharmaceutical markets. In addition to the Company’s proprietary ingredienttechnologies segment, the Company also has a core standards and contract services segment, which focuses on natural product fine chemicals (known as“phytochemicals”) and chemistry and analytical testing services, and regulatory consulting segment. As a result of the Company’s relationships with leadinguniversities and research institutions, the Company is able to discover and license early stage, intellectual property-backed ingredient technologies. TheCompany then utilizes the Company’s business segments to develop commercially viable proprietary ingredients. The Company’s proprietary ingredientportfolio is backed with clinical and scientific research, as well as extensive intellectual property protection. CORE BUSINESS ACTIVITIES PROPRIETARY INGREDIENTS Through our ingredients business segment, we develop and commercialize new proprietary ingredients. One of our proprietary ingredients that wecommercialized under this business model is nicotinamide riboside (“NR”), for which our brand name is NIAGEN®. NR is found naturally in trace amounts inmilk and other foods and is B3 vitamin. The potential beneficial effects of NR in humans include increased anti-aging properties, fatty acid oxidation,mitochondrial activity, resistance to negative consequences of high-fat diets, protection against oxidative stress, prevention of peripheral neuropathy andblocking muscle degeneration. Published research has shown that NR is a potent precursor to the co-enzyme nicotinamide adenine dinucleotide (“NAD+”) inthe mitochondria of animals. NAD+ is an important cellular co-factor for improvement of mitochondrial performance and energy metabolism. The Companyhas built a significant patent portfolio pertaining to NR by separately acquiring patent rights from Cornell University, Dartmouth College and WashingtonUniversity. We have successfully completed the first human clinical trial using NR and the results demonstrated that a single dose of NR resulted instatistically significant increases in NAD+ in healthy human volunteers. In addition, NR was also found to be safe as no adverse events were observedthroughout the clinical trial. In 2015, NR was recognized by the FDA as a “New Dietary Ingredient.” NR was also “Generally Recognized As Safe” by anindependent panel of expert toxicologists and in August 2016, the U.S. FDA issued a GRAS No Objection Letter. In 2016, we noted continued growth in thenumber of published research studies, as well as subsequent media attention regarding NR and NAD+ and their importance in healthy aging. Since the launchof NIAGEN®, there have been more than 60 published studies involving NR. Over the past three years, we have established over 100 collaborativeagreements with leading universities and research institutions to study the safety and efficacy of NIAGEN®. For years 2016, 2015 and 2014, NIAGEN®accounted for approximately 71%, 68% and 54% of our ingredient segment’s total sales, respectively. Another one of our proprietary ingredients is pterostilbene, which is marketed and sold under our brand name, pTeroPure®. Pterostilbene is a polyphenol anda powerful antioxidant that shows promise in a range of health related fields. We have exclusive in-licensed patents and patents pending related to the use ofpterostilbene for a number of these benefits, and have filed additional patents related to supplementary benefits, such as a patent jointly filed with Universityof California at Irvine related to its effects on non-melanoma skin cancer. We have successfully conducted a clinical trial, together with the University ofMississippi, related to its blood pressure lowering effects and expect to conduct additional clinical trials on pterostilbene and anticipate entering the dietarysupplement and, if clinical results are favorable, the pharmaceutical market. We believe that we also have opportunities in the skin care market and willcontinue to investigate developing these opportunities internally or through third party partners. We anticipate conducting additional clinical trials on NR,pterostilbene and other compounds in our pipeline to provide differentiation as we market these proprietary ingredients and support various health-relatedclaims or obtain additional regulatory clearances. -2-Table of Contents ANALYTICAL & CHEMISTRY BASED SERVICES, REGULATORY CONSULTING SERVICES AND NATURAL PRODUCT FINE CHEMICALS Through ChromaDex Analytics, Inc., a part of our core standards and contract services business segment, we perform chemistry-based analytical services atour laboratory in Boulder, Colorado, supporting quality control or quality assurance activities for the dietary supplement industry. On January 5, 2017, weopened a 10,000 square foot research and development laboratory in Longmont, Colorado. The newly opened laboratory will support the discovery anddevelopment of molecules and compounds that add to our proprietary ingredient portfolio, while also allowing for the expansion of existing analyticalservice offerings at our Boulder, Colorado, location. We are a leading provider of research and quality-control products and services to the natural products industry. Through our core standards and contractservices segment, customers worldwide in the dietary supplement, food and beverage, cosmetic and pharmaceutical industries use our products, which aresmall quantities of highly-characterized, research-grade, plant-based materials, to ensure the quality of their raw materials and finished products. Customersalso use our analytical chemistry services to support their quality assurance activities, primarily to ensure the identity, potency and safety of their consumerproducts. We have conducted this core standards and contract services business since 1999. We believe there is a growing need at both the manufacturing and government regulatory levels for reference standards, analytical methods and other qualityassurance methods to ensure that products that contain plants, plant extracts and naturally occurring compounds distributed to consumers are safe. We furtherbelieve that this need is driven by the perception at the consumer level regarding a lack of adequate quality controls related to certain functional food ordietary supplement based products, as well as increased effort on the part of the Food and Drug Administration (“FDA”) to assure Good ManufacturingPractices (“GMP”). Our core standards and contract service business segment provides us with the opportunity to become aware of the results from research and screeningactivities performed on thousands of potential natural product candidates through our relationships with various universities and research institutions. Byselecting the most promising ingredients leveraged from this market-based screening model, which is grounded by primary research performed throughleading universities and institutions, followed by selective investments in further research and development, new proprietary ingredients can be identifiedand brought to various markets with a much lower investment cost and an increased chance of success. Through our regulatory consulting segment, we provide our clients in the food, supplement and pharmaceutical industries with effective scientific solutionsto manage their potential health and regulatory risks. Our science-based solutions are for both new and existing products that may be subject to productliability and/or exposed to changing scientific standards or public perceptions; literature evaluations; and design and assessment of pre-clinical and clinicalsafety testing. We specialize in regulatory submissions for food and dietary supplement ingredients. For our clients involved in drug development within thepharmaceutical industry, we provide similar services as well as risk-based strategies, including intellectual property data and compliance gap identification,due diligence assessments and investigational new drug writing. Through our regulatory consulting segment, we have more efficiently advanced products inthe dietary supplement, food and beverage, animal health, cosmetic and pharmaceutical markets. PHARMACEUTICAL The Company is focused on developing and commercializing proprietary NAD+ precursors for the treatment of several rare pediatric orphan diseases such asCockayne’s Syndrome. Initial proof of concept studies have identified, with focus on rare orphan diseases linked to NAD+ depletion: ●Cockayne Syndrome (CS) - completed pre-IND metting with the FDA●Ataxia-telangiectasia (AT)●Mitochondrial Myopathies(Mitochondrial disease) -3-Table of Contents Other Orphan Diseases with connection to NAD+ depletion or mitochondrial dysfunction: ●Progeria●Duchenne Muscular Dystrophy (DMD)●Friedreich’s Ataxia (FA) We also believe that these other diseases should be a good proof of concept for other main stream NAD therapeutic platforms, with multiple research-basedRx therapeutic targets where there is a link between a disease or condition and NAD+ depletion: ●Chemotherapy-induced and diabetic-induced neuropathies●Fatty liver disease●Neurodegenerative diseases (Alzheimer’s)●Breast cancer We completed our pre-IND meeting with the FDA in November 2016, The FDA provided greater clarity on the requirements needed to file an IND to initiate aPhase I/II clinical trial in patients with Cockayne Syndrome. ChromaDex anticipates filing this IND in 2017. The FDA has indicated it will consider a FastTrack designation for NR at the time of the IND submission. In 2014 the results of a mouse study performed in collaboration with National Institute on Aging (NIA) at the National Institutes of Health (NIH), werepublished in Cell Metabolism in November 2014. The results indicated that NR was effective at restoring NAD+ levels in mitochondria and rescuingphenotypes associated with a devastating accelerated aging disease known as Cockayne Syndrome (CS). For the fiscal years ended December 31, 2016, January 2, 2016 and January 3, 2015, our revenues were approximately $26,811,000, $22,014,000 and$15,313,000, respectively. The following table summarizes the Company’s total sales for each of the business segments in the last 3 years. Fiscal YearsIngredients SegmentCore Standards andContract Services SegmentRegulatoryConsulting SegmentTotal2016$16.8 million$9.4 million$0.6 million$26.8 million2015$12.5 million$8.4 million$1.1 million$22.0 million2014 $6.8 million$7.5 million$1.0 million$15.3 million Company Background ChromaDex, Inc. was originally formed as a California corporation on February 19, 2000. On April 23, 2003, ChromaDex Inc. acquired the research anddevelopment group of a competing natural product company, Napro Biotherapeutics, located in Boulder, Colorado. The assets acquired in this transactionwere placed in a newly-formed, wholly-owned subsidiary of ChromaDex named ChromaDex Analytics, Inc., a Nevada corporation. On December 3, 2012,ChromaDex, Inc. acquired Spherix Consulting Inc., a scientific and regulatory consulting company located in the greater Washington D.C. area and Spherixbecame a wholly-owned subsidiary of ChromaDex, Inc. On December 31, 2016, Spherix Consulting, Inc. merged into ChromaDex, Inc. and subsequently wasdissolved. Business Model Our business model is to identify, acquire, reduce-to-practice, and commercialize innovative new proprietary ingredients and technologies, with an initialindustry focus on the dietary supplement, food, beverage, skin care and pharmaceutical markets. We have an experienced team that is highly capable ofadvancing products through development into commercialization with the required regulatory approval, safety, toxicology, clinical trials, supply chainmanagement, manufacturing, and ultimately either directly selling the products or licensing to third parties. Our clinical trials will potentially reinforce thehealth benefits that may be associated with our proprietary ingredients, improve the quality or specificity of FDA approved claim we can make with respect tothese health benefits, and lead us toward pharmaceutical applications for our proprietary ingredients. We have taken advantage of both supply chain needs and regulatory requirements such as the GMPs for dietary supplements to build our core standards andcontract services segment. We believe that we create value throughout the supply chain of the pharmaceutical, dietary supplements, functional foods andpersonal care markets. We do this by: ● Combining the analytical methodology and characterization of materials with the technical support for the sale of reference materials byour clients; ● Helping companies to comply with government regulations; and ● Providing value-added solutions to every layer of the supply chain in order to increase the overall quality of products being produced. In addition, through regulatory consulting segment, we provide product regulatory approval and scientific advisory services to our clients in the food,supplement and pharmaceutical industries with effective solutions to manage potential health and regulatory risks. Our science-based solutions are for bothnew and existing products that may be subject to product liability and/or exposed to changing scientific standards or public perceptions; literatureevaluations; and design and assessment of pre-clinical and clinical safety testing. We specialize in regulatory submissions for food and dietary supplementingredients. For our clients involved in drug development within the pharmaceutical industry, we provide similar services as well as risk-based strategies,including intellectual property data and compliance gap identification, due diligence assessments and investigational new drug writing. By providing a morecomprehensive suite of science-based and regulatory services, we will be able to more efficiently advance products in the dietary supplement, food andbeverage, animal health, cosmetic and pharmaceutical markets. We will continue to expand this aspect of our business and, more importantly, capitalize on additional opportunities in product development andcommercialization of various kinds of intellectual property that we have largely discovered and acquired through the sales process associated with our corestandards and contract services segment. Our core standards and contract services segment provides us with the opportunity to become aware of the results from research and screening activitiesperformed on thousands of potential natural product candidates through our relationships with various universities and research institutions. By selecting themost promising ingredients leveraged from this market-based screening model, which is grounded by primary research performed through leadinguniversities and institutions, followed by selective investments in further research and development, new proprietary ingredient technologies can beidentified and brought to various markets with a much lower investment cost and an increased chance of success. We continue to identify and in-license novel, proprietary ingredients with significant potential health benefits. Among these next generation compounds arepterostilbene and caffeine co-crystal, which allows formulators of energy products to reduce the amount of caffeine in their products, and anthocyanins,which are compounds responsible for the dark pigment found in certain berries and flowers. Like NIAGEN® and pTeroPure®, these compounds also havepotential in multiple markets. -4-Table of Contents Overview of our Products and Services Current products and services provided are as follows: PROPRIETARY INGREDIENTS ●Proprietary ingredient technologies (ingredients segment). We offer bulk raw materials for inclusion in dietary supplements, food, beverage andcosmetic products. This is an area where we are increasing our focus, as we believe we can secure and defend our market positions through patentsand long-term manufacturing agreements with our customers and vendors. ●Nicotinamide riboside NIAGEN® (ingredients segment). We are working to develop and conduct additional clinical trials to validate the healthbenefits associated with NR, a recently discovered vitamin found naturally in milk. NR is the most efficient B3 vitamin to enhance NAD+ energetics.NR has shown promise for improving cardiovascular health, glucose levels and cognitive function and has demonstrated evidence of anti-agingeffects. ●Pterostilbene pTeroPure® (ingredients segment). Pterostilbene is a polyphenol and a powerful antioxidant that shows promise in a range of healthrelated fields. We have exclusive in-licensed patents and patents pending related to the use of pterostilbene for a number of these benefits, and havefiled additional patents related to supplementary benefits, such as a patent jointly filed with University of California at Irvine related to its effects onnon-melanoma skin cancer. We have successfully conducted a clinical trial, together with the University of Mississippi, related to its blood pressurelowering effects and expect to conduct additional clinical trials on pterostilbene and anticipate entering the dietary supplement and, if clinicalresults are favorable, the pharmaceutical market. -5-Table of Contents ● Pterostilbene and caffeine co-crystal PURENERGY® (ingredients segment). We are working to develop and conduct additional clinical trials tovalidate the benefits of the co-crystal ingredient comprised of caffeine and pterostilbene. The first human study of this ingredient demonstrated thatit delivers 30 percent more caffeine, stays in the blood stream longer, and is absorbed more slowly than ordinary caffeine. With this ingredient,formulators of energy products may have the ability to reduce the total amount of caffeine in their products by as much as 50% without sacrificingconsumers’ expectations from such products. ●Anthocyanin AnthOrigin™ (ingredients segment). We plan to develop an extraction process to concentrate the anthocyanins in Suntava® PurpleCorn which will be used to produce a concentrated anthocyanin ingredient. We will utilize the expertise of a toll manufacturer to produce thecommercial ingredient. We believe there is a ready market for cost-effective concentrated anthocyanins having application in dietary supplements,sports nutrition, food & beverage and skin care. ●Spirulina Extract Immulina™ (ingredients segment). IMMULINA™ is a spirulina extract and the predominant active compounds are Braun-typelipoproteins which are useful for improving human immune function. These lipoproteins are present at much greater levels than those found withincommonly used immune enhancing botanicals such as Echinacea and ginseng. ANALYTICAL & CHEMISTRY BASED SERVICES, REGULATORY CONSULTING SERVICES AND NATURAL PRODUCT FINE CHEMICALS ●Supply of reference standards, materials & kits (core standards and contract services segment). We supply a wide range of products necessary toconduct quality control of raw materials and consumer products. Reference standards and materials and the kits created from them are used forresearch and quality control in the dietary supplements, cosmetics, food and beverages, and pharmaceutical industries. ●Supply of fine chemicals and phytochemicals (core standards and contract services segment). As demand for new natural products andphytochemicals increases, we can scale up and supply our core products in the gram to kilogram scale for companies that require these products forresearch and new product development. ● Contract services (core standards and contract services segment). We provide a wide range of contract services ranging from routine contractanalysis for the production of dietary supplements, cosmetics, foods and other natural products to elaborate contract research for clients in theseindustries. ●Consulting services (regulatory consulting segment). We provide a comprehensive range of consulting services in the areas of regulatory support,new ingredient or product development, risk management and litigation support. We provide and offer product regulatory approval and scientificadvisory services. ● Process development (core standards and contract services segment). Developing cost effective and efficient processes for manufacturing naturalproducts can be very difficult and time consuming. We assist customers in creating processes for cost-effective manufacturing of natural products,using “green chemistry.” -6-Table of Contents ●Quality verification seal program (core standards and contract services segment). We intend to further develop and expand our offering of“ChromaDex® Quality Verified Seal” program which currently includes (i) supply chain facility audits and inspections to verify compliance withGood Manufacturing Practices as specified by the FDA; (ii) a comprehensive identity testing program for raw materials and finished products; (iii)finished product testing for potential contaminants such as microbials, heavy metals and residual solvents; and (iv) provisions for ongoingmonitoring to be performed as part of a quality protocol design and managed by ChromaDex. ●Phytochemical libraries (core standards and contract services segment). We intend to continue investing in the development of natural productbased libraries by continuing to create these libraries internally as well as through product licensing. ●Databases for cross-referencing phytochemicals (core standards and contract services segment). We are working on building a database for crossreferencing phytochemicals against an extensive list of plants, including links to references to ethnopharmacological, ethnobotanical, andbiological activity, as well as clinical evidence. Sales and Marketing Strategy Our sales structure for the ingredients segment and core standards and contract services segment is based on a direct, technically-oriented model. We recruitand hire sales and marketing staff with appropriate commercial and scientific backgrounds. Our sales staff currently operates out of our Irvine, Californiaoffice and performs sales duties by using combinations of telemarketing, e-mail, tradeshows and customer visits. The Inside Sales portion of the organizationalso has customer service responsibilities. All sales and marking staff are compensated based on salary and performance-based bonus. The regulatory consulting segment, operating out of Rockville, Maryland, generates scientific and regulatory consulting revenue from an existing well-established list of Fortune 1000 customers and referrals. Our sales staff for the ingredients, reference standards and analytical service business in Irvine,California also generates leads for the regulatory consulting segment. -7-Table of Contents USA and Canada: For our ingredients segment and core standards and contract services segment, we employ a range of the following marketing activities to promote and sellour products and services: ●Catalogs, research publications, brochures and flyers ●Tradeshows and conferences ●Newsletters (via e-mail) ●Internet ●Website ●Advertising in trade publications ●Press releases We intend to continue to use a direct marketing approach to promote our products and services to all markets that we target for direct sales. International: For our ingredients segment, most of our customers are based currently in U.S. We are looking to expand into international markets through our internationalbusiness partners. For our core standards contract services segment, we use international distributors to market and sell to several foreign countries or markets. The use ofdistributors in some international markets has proven to be more effective than direct sales. Currently, we have distribution agreements in place with thefollowing distributors for the following countries or regions: ●Europe (LGC Limited) ●China (MeiTech International LLC) ●Japan (Wako Pure Chemical Industries, Ltd.) ●Korea (Dongmyung Scientific Co.) ●Brazil (JMC, Inc.) ●Australia and New Zealand (Phenomenex) ●Taiwan (Uni Onward) ●South Africa (Industrial Analytical) ●India ●Indonesia, Malaysia, Singapore and Thailand ●Mexico -8-Table of Contents For our regulatory consulting segment, we engage on consulting projects for customers all over the world, including Europe, South America, and Asia.Consulting revenues are generated from an existing well-established list of Fortune 1000 customers and referrals. Business Market According to data from the Nutrition Business Journal, the US consumer Dietary Supplement market is estimated to be $41 billion in 2016 and growing at6.0% per annum through 2020. This is the primary market that ChromaDex services for both ingredients and analytical testing and standards. The DietarySupplement segment is part of the larger US Nutrition Industry which is estimated at $195 billion for 2016 and forecasted to grow at a rate of 8% through2020. This larger segment includes Dietary Supplements as well as functional foods and beverages and personal care. This larger industry represents asecondary addressable market for our ingredients and services. The quality control, safety and assurance of the products in these markets are, as previouslynoted, largely “under regulated.” This scenario leads to the establishment of the basis of one of our business strategies: concentration on the overall contentof products, as well as active/marker components, uniformity of production, and toxicology of products in these markets in ways similar to analysis by othercompanies focused in the pharmaceutical industry. There is an increasing demand for new products, ingredients and ideas for natural products. The pressurefor new, innovative products, which are “natural” or “green” based, cuts across all markets including food, beverage, cosmetic and pharmaceutical. While we believe that doctors and patients have become more receptive to the use of botanical and herbal-based and natural and dietary ingredients toprevent or treat illness and improve quality of life, the medical establishment has conditioned its acceptance on significantly improved demonstration ofefficacy, safety and quality control comparable to that imposed on pharmaceuticals. Nevertheless, little is currently known about the constituents, activecompounds and safety of many botanical and herbal natural ingredients and few qualified chemists and technology based companies exist to supply theinformation and products necessary to meet this burgeoning market need. Natural products are complex mixtures of many compounds, with significantvariability arising from growing and extraction conditions. The following developments are some that highlight the need for standards control and qualityassurance: ●The FDA published its draft guidance for GMPs for dietary supplements on March 13, 2003. The final rule from this guidance was made effective inJune 2007, and full compliance was required by June 2010; and ●Regulatory agencies around the world have started to review the need for the regulation of herbal and natural supplements and are consideringregulations that will include testing for the presence of toxic or adulterating compounds, drug/compound interactions and evidence that theproducts are biologically active for their intended use. -9-Table of Contents Government Regulation Some of our operations for ingredients segment and core standards and contract services segment are subject to regulation by various United States federalagencies and similar state and international agencies, including the FDA, the Federal Trade Commission (“FTC”), the Department of Commerce, theDepartment of Transportation, the Department of Agriculture and other state and international agencies. These regulators govern a wide variety of productionactivities, from design and development to labeling, manufacturing, handling, selling and distributing of products. From time to time, federal, state andinternational legislation is enacted that may have the effect of materially increasing the cost of doing business or limiting or expanding our permissibleactivities. We cannot predict whether or when potential legislation or regulations will be enacted, and, if enacted, the effect of such legislation, regulation,implementation, or any implemented regulations or supervisory policies would have on our financial condition or results of operations. In addition, theoutcome of any litigation, investigations or enforcement actions initiated by state or federal authorities could result in changes to our operations beingnecessary and in increased compliance costs. -10-Table of Contents U.S. FDA Regulation In the United States dietary supplements and food are subject to FDA regulations. For example, the FDA’s final rule on GMPs for dietary supplementspublished in June 2007 requires companies to evaluate products for identity, strength, purity and composition. These regulations in some cases, particularlyfor new ingredients, require a notification that must be submitted to the FDA along with evidence of safety. In addition, depending on the type of product,whether a dietary supplement, cosmetic, food, or pharmaceutical, the FDA, under the Food, Drug and Cosmetic Act, or FDCA, can regulate: ●product testing; ●ingredient testing; ●documentation process, batch records, specifications; ●product labeling; ●product manufacturing and storage; ●New Dietary Ingredient (NDI) status; ●health claims, advertising and promotion; and ●product sales and distribution. The FDCA has been amended several times with respect to dietary supplements, most notably by the Dietary Supplement Health and Education Act of 1994,known as “DSHEA.” DSHEA established a new framework for governing the composition and labeling of dietary supplements. Generally, under DSHEA,dietary ingredients that were marketed in the United States before October 15, 1994 may be used in dietary supplements without notifying the FDA. However,a “new” dietary ingredient (a dietary ingredient that was not marketed in the United States before October 15, 1994) is subject to a new dietary ingredient, orNDI, notification that must be submitted to the FDA unless the ingredient has previously been “present in the food supply as an article used for food” withoutbeing “chemically altered.” An NDI notification must provide the FDA with evidence of a “history of use or other evidence of safety” establishing that theuse of the dietary ingredient “will reasonably be expected to be safe.” An NDI notification must be submitted to the FDA at least 75 days before the initialmarketing of the NDI. There can be no assurance that the FDA will accept the evidence of safety for any NDIs that we may want to commercialize, and theFDA’s refusal to accept such evidence could prevent the marketing of such dietary ingredients. The FDA is in the process of developing guidance for theindustry that will aim to clarify the FDA’s interpretation of the NDI notification requirements, and this guidance may raise new and significant regulatorybarriers for NDIs. In order for any new ingredient developed by us to be used in conventional food or beverage products in the United States, the product would either have tobe approved by the FDA as a food additive pursuant to a food additive petition, or FAP, or be generally recognized as safe, or GRAS. The FDA does not haveto approve a company’s determination that an ingredient is GRAS. However, a company can notify the FDA of its determination. There can be no assurancethat the FDA will approve any FAP for any ingredient that we may want to commercialize, or agree with our determination that an ingredient is GRAS, eitherof which could prevent the marketing of such ingredient. U.S. Advertising Regulations In addition to FDA regulations, the FTC regulates the advertising of dietary supplements, foods, cosmetics, and over-the-counter, or OTC, drugs. In recentyears, the FTC has instituted numerous enforcement actions against dietary supplement companies for failure to adequately substantiate claims made inadvertising or for the use of false or misleading advertising claims. These enforcement actions have often resulted in consent decrees and the payment of civilpenalties, restitution, or both, by the companies involved. We may be subject to regulation under various state and local laws that include provisionsgoverning, among other things, the formulation, manufacturing, packaging, labeling, advertising and distribution of dietary supplements, foods, cosmeticsand OTC drugs. -11-Table of Contents In addition, The National Advertising Division of the Council of Better Business Bureaus (the “NAD”) reviews national advertising for truthfulness andaccuracy. The NAD uses a form of alternative dispute resolution, working closely with in-house counsel, marketing executives, research and developmentdepartments and outside consultants to decide whether claims have been substantiated. International Regulations Our international sales for the ingredients segment are subject to foreign government regulations, which vary substantially from country to country. The timerequired to obtain approval by a foreign country may be longer or shorter than that required for FDA approval, and the requirements may differ. In addition,the export by us of certain of our products that have not yet been cleared or approved for domestic distribution may be subject to FDA export restrictions. Wemay be unable to obtain on a timely basis, if at all, any foreign government or United States export approvals necessary for the marketing of our productsabroad. Regulation in Europe is exercised primarily through the European Union, which regulates the combined market of each of its member states. Other countries,such as Switzerland, have voluntarily adopted laws and regulations that mirror those of the European Union with respect to dietary ingredients. Major Customers For our ingredients segment, there were three customers who accounted for more than 10% the Company’s total sales in the last three years. In 2016,Customer C accounted for 19.3% of the Company’s total sales. In 2015, Customer B accounted for 11.0% of the Company’s total sales. In 2014, Customer Aaccounted for 10.2% of the Company’s total sales. Years Ended Major Customers 2016 2015 2014 Customer C (Ingredients segment) 19.3% * * Customer B (Ingredients segment) * 11.0% * Customer A (Ingredients segment) * * 10.2% * Represents less than 10%. Generally, we do not depend upon a single customer, or a few customers and the loss of any one or more would not have a material adverse effect on theingredients segment or the Company. However, due to the volume of ingredients we are selling in relation to the overall Company’s sales, we do expect that afew of our customers at times may account for more than 10% of the Company’s sales. For the core standards and contract services segment and the regulatory consulting segment, we did not have any customers who accounted for more than10% of the Company’s total sales in the last three years. Competitive Business Conditions For our ingredients segment, we face little direct competition as the ingredients we offer, such as NIAGEN® and pTeroPure® are backed by intellectualproperties exclusively licensed to us. We, however, face strong indirect competition from other ingredient suppliers who may supply alternative ingredientsthat may have similar characteristics compared to the ingredients we offer. Below is a list of some of the competitors for our ingredients segment. -12-Table of Contents Ingredients Business Segment Competitors ●Royal DSM (the Netherlands) ●Glanbia plc (Ireland) ●BASF (Germany) ●Lonza Group Ltd (Switzerland) ●Sabinsa Corporation (India/USA) For the core standards and contract services segment, we face competition within the standardization and quality testing niche of the natural products market,though we know of no other companies that offer both reference standards and testing to their customers. Below is a current list of certain competitors. Thesecompetitors have already developed reference standards or contract services or are currently taking steps to develop botanical standards or contract services.Of the competitors listed, some currently sell fine chemicals, which, by default, are sometimes used as reference standards, and others are closely aligned withour market niche so as to reduce any barriers to entry if these companies wish to compete. Some of these competitors currently offer similar services and havethe scale and resources to compete with us for larger customer accounts. Because some of our competitors are larger in total size and capitalization, theylikely have greater access to capital markets, and are in a better position than we are to compete nationally and internationally. Core Standards and Contract Services Segment Competitors ●Sigma-Aldrich (USA) ●Phytolab (Germany) ●US Pharmacopoeia (USA) ●Extrasynthese (France) ●Covance (USA) ●Eurofins (France) ●Silliker Canada Co. (Canada) For regulatory consulting segment, there are numerous competitors, including some that are much larger companies with more resources. The success inwinning and retaining clients is heavily dependent on the efforts and reputation of our consultants. We believe the barriers to entry in particular areas of ourconsulting expertise are low. Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts, Including Duration For our ingredients segment, we currently protect our intellectual property through patents, trademarks, designs and copyrights on our products and services.Our business strategy is to use the intellectual property harnessed from our core standards and contract services segment as the basis for providing newproprietary ingredients to our customers. Our strategy is to develop these proprietary ingredients on our own as well as to license our intellectual property tocompanies who will commercialize it. We anticipate that the net result will be a long term flow of intellectual property milestone and royalty payments to us. -13-Table of Contents The following table sets forth our existing patents and those to which we have licensed rights: Patent Number Title Filing Date Issued Date Expires Licensor 6,852,342Compounds for alteringfood intake in humans3/26/20022/8/20052/12/2022Co-owned by Avoca,Inc. and ChromaDex7,205,284Potent immunostimulantsfrom microalgae7/10/20014/17/20073/9/2022Licensed fromUniversity ofMississippi7,776,326Methods andcompositions for treatingneuropathies6/3/20058/17/20106/3/2025Licensed fromWashington University7,846,452Potent immunostimulatoryextracts from microalgae7/28/200510/7/20107/28/2025Licensed fromUniversity ofMississippi8,106,184Nicotinyl RibosideCompositions andMethods of Use11/17/20061/31/201211/17/2026Licensed from CornellUniversity8,114,626Yeast strain and methodfor using the same toproduce NicotinamideRiboside3/26/20092/14/20123/26/2029Licensed fromDartmouth College8,133,917Pterostilbene as an agonistfor the peroxisomeproliferator-activatedreceptor alpha isoform10/25/20103/13/201210/25/2030Licensed from theUniversity ofMississippi and U.S.Department ofAgriculture8,197,807Nicotinamide RibosideKinase compositions andMethods for using thesame11/20/20076/12/201211/20/2027Licensed fromDartmouth College8,227,510Combine use ofpterostilbene andquercetin for theproduction of cancertreatment medicaments7/19/20057/24/20127/19/2025Licensed from GreenMolecular S.L.8,252,845Pterostilbene as an agonistfor the peroxisomeproliferator-activatedreceptor alpha isoform2/1/20128/28/20122/1/2032Licensed from theUniversity ofMississippi and U.S.Department ofAgriculture8,318,807Pterostilbene Caffeine Co-Crystal Forms7/30/201011/27/20127/30/2030Licensed from LaurusLabs Private Limited -14-Table of Contents 8,383,086Nicotinamide RibosideKinase compositions andMethods for using thesame4/12/20122/26/20134/12/2032Licensed fromDartmouth College8,524,782Key intermediate for thepreparation of Stilbenes,solid forms ofPterostilbene, andmethods for making thesame6/1/20099/3/20136/1/2029Licensed from LaurusLabs Private Limited8,809,400Method to AmeliorateOxidative Stress andImprove Working MemoryVia PterostilbeneAdministration6/10/20088/19/20146/10/2028Licensed from theUniversity ofMississippi and U.S.Department ofAgriculture8,841,350Method for treating non-melanoma skin cancer byinducing UDP-Glucuronosyltransferaseactivity usingpterostilbene5/8/20129/22/20145/8/2032Co-owned byChromaDex andUniversity ofCalifornia8,945,653Extracted whole kernelsand improved processedand processable cornproduced thereby5/23/20112/3/20155/23/2031Licensed from Suntava,LLC9,028,887Method improve spatialmemory via pterostilbeneadministration5/22/20145/12/20155/22/2034Licensed from theUniversity ofMississippi and U.S.Department ofAgriculture9,439,875Anxiolytic effect ofpterostilbene5/11/20119/13/20165/11/2031Licensed from theUniversity ofMississippi and U.S.Department ofAgriculture Manufacturing For our ingredients segment and our core standards and contract services segment, we currently utilize third-party manufacturers to produce and supply theingredients. Following the receipt of products or product components from third-party manufacturers, we currently inspect products, as needed. We expect toreserve the right to inspect and ensure conformance of each product and product component to our specifications. We will also consider manufacturingcertain products or product components internally, if our capacity permits, when demand or quality requirements make it appropriate to do so. We intend to work with manufacturing companies that can meet the standards imposed by the FDA, the International Organization for Standardization, or“ISO,” and the quality standards that we will require for our own internal policies and procedures. We expect to monitor and manage supplier performancethrough a corrective action program developed by us. We believe these manufacturing relationships can minimize our capital investment, help control costs,and allow us to compete with larger volume manufacturers of dietary supplements, phytochemicals and ingredients. For certain reference standards, ChromaDex Analytics, Inc. operates laboratory operations and a manufacturing facility for our core standards and contractservices segment. We currently maintain our own manufacturing equipment and have the ability to manufacture certain products in limited quantities,ranging from milligrams to kilograms. In addition, the new research and development laboratory in Longmont, Colorado will allow us to manufacture at aprocess scale for products that we are planning to take to market. We intend to contract for the manufacturing of products that we develop and enter intostrategic relationships or license agreements for sales and marketing of products that we develop when the quantities we require exceed our capacity. -15-Table of Contents Sources and Availability of Raw Materials and the Names of Principal Suppliers We believe that we have identified reliable sources and suppliers of ingredients, chemicals, phytochemicals and reference materials that will provide productsin compliance with our guidelines. Research and Development For our ingredients segment, we have completed the first human clinical trial on our proprietary ingredient NR and the results demonstrated that a single doseof NR resulted in statistically significant increases in the co-enzyme NAD+ in healthy human volunteers. In addition, NR was also found to be safe as noadverse events were observed. In 2015, NR was recognized by the FDA as a “New Dietary Ingredient.” NR was also “Generally Recognized As Safe” by anindependent panel of expert toxicologists and in August 2016, the U.S. FDA issued a GRAS No Objection Letter. We are currently conducting a second human clinical trial on NR which will evaluate the effect of repeated doses of NIAGEN® on NAD+ metaboliteconcentrations in blood, urine and muscle in healthy adults. This study will evaluate the impacts of 3 dose levels of NIAGEN® compared to a placebo. Onequarter of subjects will receive the low dose of NIAGEN® (100 mg), one quarter will receive the moderate dose of NIAGEN® (300 mg), one quarter willreceive the higher dose of NIAGEN® (1,000 mg) and one quarter will receive the placebo. The recruitment and dosing portions of the trial are currently in thefinal stages as the last participant is currently on study. We have also been working closely with the National Institute of Health under a collaborative agreement on a therapeutic indication for NR as a treatment ofa rare pediatric orphan disease, Cockayne Syndrome. We completed a pre-Investigational New Drug (“IND”) meeting with the FDA in November 2016 and weexpect to file an IND application with the FDA in 2017. We have also successfully conducted a clinical trial, together with the University of Mississippi, on our proprietary ingredient pterostilbene for its bloodpressure lowering effects. We expect to conduct additional clinical trials on this compound and we anticipate entering the dietary supplement and, if clinicalresults are favorable, possibly the pharmaceutical markets as well. We also have completed a study on our proprietary ingredient pterostilbene with caffeineco-crystal. The first human study of this ingredient demonstrated that it delivers 30 percent more caffeine, stays in the blood stream longer, and is absorbedmore slowly than ordinary caffeine. We anticipate conducting additional clinical trials on NR and other compounds in our pipeline to provide differentiationas we market these proprietary ingredients and support various health-related claims or obtain additional regulatory clearances. Through our newly opened research and development laboratory in Longmont, Colorado, we intend to manufacture at a process scale for products that we areplanning to take to market as well as explore cost saving processes for existing products. We plan to utilize our expertise in natural products to license and develop new intellectual property that can be sold to clients in our target industries. Research and development costs for our ingredients segment for the fiscal years ended December 31, 2016, January 2, 2016 and January 3, 2015 wereapproximately $2,488,000, $892,000 and $514,000, respectively. Environmental Compliance We will incur significant expense in complying with GMPs and safe handling and disposal of materials used in our research and manufacturing activities. Wedo not anticipate incurring additional material expense in order to comply with Federal, state and local environmental laws and regulations. Working Capital The Company’s working capital at the end of years 2016 and 2015 was approximately $7.8 million and $4.4 million, respectively. The Company measuresworking capital by adding trade receivables and inventories, and subtracting accounts payable. The majority of the working capital is consumed by ouringredients segment as the operations require a large amount of inventory to be on hand. As the ingredients segment grows, more working capital will likelybe needed to support the operations. As of December 31, 2016, the Company had approximately $7.0 million of inventory for our ingredients segment, whichrepresented approximately 36% of the Company’s total assets. -16-Table of Contents Backlog Orders For our ingredients segment, we have minimal backlog orders as we carry inventory on hand for most of the ingredients we offer and we ship upon the receiptof customer’s purchase orders. For the core standards and contract services segment, we normally have a small backlog of orders for reference standards. These orders amount toapproximately $25,000 or less. Because we list over 1,800 phytochemicals and 400 botanical reference materials in our catalog, we may not always have theitems in stock at the time of customers’ orders. These backlog orders are normally fulfilled within 2 to 3 months. Facilities For information on our facilities, see “Properties” in Item 2 of this Form 10-K. Employees As of December 31, 2016, ChromaDex (including ChromaDex Analytics, Inc.) had 93 employees, 84 of whom were full-time and 9 of whom were part-time.We consider our relationships with our employees to be satisfactory. None of our employees is covered by a collective bargaining agreement. 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 uncertaintiesdescribed below together with all other information contained in this Form 10-K before making investment decisions with respect to our common stock. Ifany of the following risks actually occurs, our business, financial condition, results of operations and our future growth prospects would be materially andadversely affected. Under these circumstances, the trading price and value of our common stock could decline, resulting in a loss of all or part of yourinvestment. The risks and uncertainties described in this Form 10-K are not the only ones facing our Company. Additional risks and uncertainties of whichwe are not presently aware, or that we currently consider immaterial, may also affect our business operations. Risks Related to our Company and our Business We have a history of net losses, may need additional financing to meet our future short-term and long-term capital requirements and may be unable toraise sufficient capital on favorable terms or at all. 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$2,928,000, $2,771,000 and $5,388,000 for the years ended December 31, 2016, January 2, 2016 and January 3, 2015, respectively. We have not achievedprofitability on an annual basis. We may not be able to reach a level of revenue to achieve profitability. If our revenues grow slower than anticipated, or ifoperating expenses exceed expectations, then we may not be able to achieve profitability in the near future or at all, which may depress our stock price. On November 4, 2016, we entered into a business financing agreement with Western Alliance Bank, in order to establish a formula based revolving credit lineup to $5.0 million. As of December 31, 2016, the Company failed to meet one of the covenants of the business financing agreement, which was to at leastmeet 50% of projections of EBDAS and was in default under the agreement (the “Existing Default.”). On March 12, 2017, the Company entered into amodification agreement with Western Alliance under which Western Alliance waived the Existing Default. While we anticipate that our current cash, cashequivalents, cash to be generated from operations and the established $5.0 million revolving credit line will be sufficient to meet our projected operatingplans through at least March 17, 2018, we may require additional funds, either through additional equity or debt financings or collaborative agreements orfrom other sources. -17-Table of Contents 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 obtainrequired 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. As a result of these factors, we may seek to raise additional capital prior to March 17, 2018 both to meet our projected operating plans after March 17, 2018and to fund our longer term strategic objectives. Additional capital may come from public and private equity or debt offerings, borrowings under lines ofcredit 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 raisingthese additional funds. Furthermore, if we issue equity or debt securities to raise additional funds, our existing stockholders may experience dilution and thenew equity or debt securities we issue may have rights, preferences and privileges senior to those of our existing stockholders. In addition, if we raiseadditional funds through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to our products orproprietary 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 developor enhance our products, obtain the required regulatory clearances or approvals, execute our business plan, take advantage of future opportunities, or respondto competitive pressures or unanticipated customer requirements. Any of these events could adversely affect our ability to achieve our development andcommercialization goals, which could have a material and adverse effect on our business, results of operations and financial condition. We are currently engaged in litigation with Elysium Health, LLC that may harm our business, and a disruption in sales to or the ability to collect from thiscustomer or other significant customers in the future, could also materially harm our financial results. We are currently engaged in litigation with Elysium Health, LLC that represented 19% of our net sales for the year ending December 31, 2016. For furtherdetails on this litigation, please refer to Item 3 of this Annual Report on Form 10-K. This customer has not paid us approximately $3.0 million for previouspurchase orders. We may not collect the full amount owed to us by this customer, and as a result, we may have to write off a large portion of that amount asuncollectible expense. We may also have to discount future sales, if any, to this customer. The litigation may turn out to be substantial and complex, and it could cause us to incur significant costs and distract our management over an extendedperiod of time. The litigation may substantially disrupt our business and we cannot assure you that we will be able to resolve the litigation on terms favorableto us. The customer has filed a counterclaim against us, and if we are unsuccessful in resolving the litigation on favorable terms to us, we may be forced topay compensatory and punitive damages and restitution for any royalty payments that we received from the customer. We cannot guarantee that the customerwill continue to make purchases at previous volumes or prices, which may harm our future sales if we cannot replace their volume with other existing andnew customers and which may materially affect our future financial results. Going forward, we may have additional customers which we become highly dependent on. Factors that could influence our relationship with our significantcustomer and other customers which we may become highly dependent on 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; -18-Table of Contents ●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. Decline in the state of the global economy and financial market conditions could adversely affect our ability to conduct business and our results ofoperations. Global economic and financial market conditions, including disruptions in the credit markets and the impact of the global economic deterioration maymaterially impact our customers and other parties with whom we do business. These conditions could negatively affect our future sales of our ingredient lineas many consumers consider the purchase of nutritional products discretionary. Decline in general economic and financial market conditions couldmaterially adversely affect our financial condition and results of operations. Specifically, the impact of these volatile and negative conditions may includedecreased demand for our products and services, a decrease in our ability to accurately forecast future product trends and demand, and a negative impact onour ability to timely collect receivables from our customers. The foregoing economic conditions may lead to increased levels of bankruptcies, restructuringsand liquidations for our customers, scaling back of research and development expenditures, delays in planned projects and shifts in business strategies formany 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 growtheffectively. Our significant increase in the scope and the scale of our product launches, including the hiring of additional personnel, has resulted in significantly higheroperating expenses. As a result, we anticipate that our operating expenses will continue to increase. Expansion of our operations may also cause a significantdemand on our management, finances and other resources. Our ability to manage the anticipated future growth, should it occur, will depend upon asignificant expansion of our accounting and other internal management systems and the implementation and subsequent improvement of a variety ofsystems, procedures and controls. There can be no assurance that significant problems in these areas will not occur. Any failure to expand these areas andimplement and improve such systems, procedures and controls in an efficient manner at a pace consistent with our business could have a material adverseeffect 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 theexpansion of our operations and the anticipated increase in our operating expenses, as well as the difficulty in forecasting revenue levels, we expect tocontinue to experience significant fluctuations in its results of operations. Changes in our business strategy 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 ouroperations or particular businesses or assets. In addition, external events including changing technology, changing consumer patterns and changes inmacroeconomic conditions may impair the value of our assets. When these changes or events occur, we may incur costs to change our business strategy andmay 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 ofassets or returns on new investments may be lower than prior to the change in strategy or restructuring. For example, we may change the strategy of ouringredients segment by focusing on selling products with our ingredients direct to consumers, and may decide to invest in building a direct-to-consumerbusiness. If we are not successful in developing a direct-to-consumer business, our sales may decrease and our costs may increase. -19-Table of Contents The success of our ingredient business is linked to the size and growth rate of the vitamin, mineral and dietary supplement market and an adverse changein 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. Unfavorable publicity or consumer perception of our products and any similar products distributed by other companies could have a material adverseeffect on our business. We believe the nutritional supplement market is highly dependent upon consumer perception regarding the safety, efficacy and quality of nutritionalsupplements generally, as well as of products distributed specifically by us. Consumer perception of our products can be significantly influenced byscientific research or findings, regulatory investigations, litigation, national media attention and other publicity regarding the consumption of nutritionalsupplements. We cannot assure you that future scientific research, findings, regulatory proceedings, litigation, media attention or other favorable researchfindings or publicity will be favorable to the nutritional supplement market or any particular product, or consistent with earlier publicity. Future researchreports, findings, regulatory proceedings, litigation, media attention or other publicity that are perceived as less favorable than, or that question, such earlierresearch reports, findings or publicity could have a material adverse effect on the demand for our products and consequently on our business, results ofoperations, financial condition and cash flows. Our dependence upon consumer perceptions means that adverse scientific research reports, findings, regulatory proceedings, litigation, media attention orother publicity, whether or not accurate or with merit, could have a material adverse effect on the demand for our products, the availability and pricing of ouringredients, and our business, results of operations, financial condition and cash flows. Further, adverse public reports or other media attention regarding thesafety, efficacy and quality of nutritional supplements in general, or our products specifically, or associating the consumption of nutritional supplementswith illness, could have such a material adverse effect. Any such adverse public reports or other media attention could arise even if the adverse effectsassociated with such products resulted from consumers’ failure to consume such products appropriately or as directed and the content of such public reportsand 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 an ingredient supplier, marketer and manufacturer of products designed for human and animal consumption, we are subject to product liability claims ifthe 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 foods,dietary supplements, or natural health products, and, in most cases, are not necessarily subject to pre-market regulatory approval in the United States. Some ofour products contain innovative ingredients that do not have long histories of human consumption. Previously unknown adverse reactions resulting fromhuman consumption of these ingredients could occur. In addition, the products we sell are produced by third-party manufacturers. As a marketer of productsmanufactured 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 subjectto various product liability claims, including, among others, that our products include inadequate instructions for use or inadequate warnings concerningpossible side effects and interactions with other substances. A product liability claim against us could result in increased costs and could adversely affect ourreputation with our customers, which, in turn, could have a materially adverse effect on our business, results of operations, financial condition and cash flows. -20-Table of Contents We acquire a significant amount of key ingredients for our products from foreign suppliers, and may be negatively affected by the risks associated withinternational trade and importation issues. We acquire a significant amount of key ingredients for a number of our products from suppliers outside of the United States, particularly India andChina. Accordingly, the acquisition of these ingredients is subject to the risks generally associated with importing raw materials, including, among otherfactors, delays in shipments, changes in economic and political conditions, quality assurance, 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 necessaryboth in the United States and internationally, we cannot assure you that raw materials received from suppliers outside of the United States will conform to allspecifications, laws and regulations. There have in the past been quality and safety issues in our industry with certain items imported from overseas. We mayincur additional expenses and experience shipment delays due to preventative measures adopted by the Indian and U.S. governments, our suppliers and ourcompany. 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’ andofficers’ liability insurance. Our current insurance program is consistent with both our past level of coverage and our risk management policies. However, wecannot 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 asprospective customers require that we maintain minimum levels of coverage for our products. Lack of coverage or coverage below these minimum requiredlevels could cause these customers to materially change business terms or to cease doing business with us entirely. We depend on key personnel, the loss of any of which could negatively affect our business. We depend greatly on Frank L. Jaksch Jr., Thomas C. Varvaro, Troy A. Rhonemus and Robert N. Fried who are our Chief Executive Officer, Chief FinancialOfficer, Chief Operating Officer, and recently hired President and Chief Strategy 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 productsand provide our services. Only marketing personnel with specific experience and knowledge in health care are able to effectively market our products. Inaddition, some of our manufacturing, quality control, safety and compliance, information technology, sales and e-commerce related positions are highlytechnical as well. We face intense competition for these professionals from our competitors, customers, marketing partners and other companiesthroughout the industries in which we compete. Our success will depend, in part, upon our ability to attract and retain additional skilled personnel, whichwill require substantial additional funds. There can be no assurance that we will be able to find and attract additional qualified employees or retain any suchpersonnel. Our inability to hire qualified personnel, the loss of services of our key personnel, or the loss of services of executive officers or key employeesthat 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 significant customers, including the ongoing litigation as described in Item 3 of this Annual Report on Form 10-K; ●our ability to attract and retain key personnel in a timely and cost effective manner; -21-Table of Contents ●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. 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. Wehave based our current and future expense levels largely on our investment plans and estimates of future events although certain of our expense levels are, toa large extent, fixed. Assuming our products reach the market, we may be unable to adjust spending in a timely manner to compensate for any unexpectedrevenue shortfall. Accordingly, any significant shortfall in revenues relative to our planned expenditures would have an immediate adverse effect on ourbusiness, results of operations and financial condition. Further, as a strategic response to changes in the competitive environment, we may from time to timemake certain pricing, service or marketing decisions that could have a material and adverse effect on our business, results of operations and financialcondition. 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 andmarketing resources and experience in research and development. Competitors could develop new technologies that compete with our products and servicesor even render our products obsolete. If a competitor develops superior technology or cost-effective alternatives to our products and services, our businesscould 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 havecompeted 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 salesrevenues 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 todevelop, 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 theseresources, these companies can implement extensive advertising and promotional campaigns, both generally and in response to specific marketing efforts bycompetitors, and enter into new markets more rapidly to introduce new products. In certain instances, competitors with greater financial resources also may beable to enter a market in direct competition with us, offering attractive marketing tools to encourage the sale of products that compete with our products orpresent 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 requireadditional development, clinical evaluation, regulatory approval, significant marketing efforts and substantial additional investment before they can provideus with any revenue. Despite our efforts, these products may not become commercially successful products for a number of reasons, including but not limitedto: ●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; -22-Table of Contents ●any products that are approved may not be accepted in the marketplace; ●we may not have adequate financial or other resources to complete the development or to commence the commercialization of our products or willnot 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 theintellectual property rights of others; and ●we may be unable to obtain or defend patent rights for our products. 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 improveexisting products and services that are offered to our customers. We are committed to attempting to keep pace with technological change, to stay abreast oftechnology changes and to look for partners that will develop new products and services for our customer base. We cannot assure prospective investors thatwe will be successful in finding partners or be able to continue to incorporate new developments in technology, to improve existing products and services, orto develop successful new products and services, nor can we be certain that newly-developed products and services will perform satisfactorily or be widelyaccepted 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 torigorous quality standards to obtain and maintain regulatory approval of their products and the manufacturing processes that generate them. A failure tomaintain, or, in some instances, upgrade our quality standards to meet our customers’ needs, could cause damage to our reputation and potentially substantialsales losses. Our ability to protect our intellectual property and proprietary technology through patents and other means is uncertain and may be inadequate, whichwould 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, aswell as a combination of copyright, trade secret and trademark laws and nondisclosure, confidentiality and other contractual restrictions to protect ourproprietary technology, including our licensed technology. However, these legal means afford only limited protection and may not adequately protect ourrights or permit us to gain or keep any competitive advantage. For example, our pending United States and foreign patent applications may not issue aspatents in a form that will be advantageous to us or may issue and be subsequently successfully challenged by others and invalidated. In addition, ourpending patent applications include claims to material aspects of our products and procedures that are not currently protected by issued patents. Both thepatent application process and the process of managing patent disputes can be time-consuming and expensive. Competitors may be able to design around ourpatents or develop products which provide outcomes which are comparable or even superior to ours. Steps that we have taken to protect our intellectualproperty and proprietary technology, including entering into confidentiality agreements and intellectual property assignment agreements with some of ourofficers, employees, consultants and advisors, may not provide us with meaningful protection for our trade secrets or other proprietary information in theevent of unauthorized use or disclosure or other breaches of the agreements. Furthermore, the laws of foreign countries may not protect our intellectualproperty rights to the same extent as do the laws of the United States. -23-Table of Contents In the event a competitor infringes upon 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 beexpensive and time consuming and could divert our management’s attention. We may not have sufficient resources to enforce our intellectual property rightsor to defend our patents rights against a challenge. The failure to obtain patents and/or protect our intellectual property rights could have a material andadverse 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, orwhether 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 otherintellectual property rights are invalidated, rejected or found unenforceable, that could reduce or eliminate any competitive advantage we might otherwisehave had. We may become subject to claims of infringement or misappropriation of the intellectual property rights of others, which could prohibit us fromdeveloping our products, require us to obtain licenses from third parties or to develop non-infringing alternatives and subject us to substantial monetarydamages. Third parties could, in the future, assert infringement or misappropriation claims against us with respect to products we develop. Whether a product infringesa patent or misappropriates other intellectual property involves complex legal and factual issues, the determination of which is often uncertain. Therefore, wecannot be certain that we have not infringed the intellectual property rights of others. Our potential competitors may assert that some aspect of our productinfringes their patents. Because patent applications may take years to issue, there also may be applications now pending of which we are unaware that maylater result in issued patents upon which our products could infringe. There also may be existing patents or pending patent applications of which we areunaware 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’sattention 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 infringethem, we could be prohibited from selling any product that is found to infringe unless we could obtain licenses to use the technology covered by the patentor 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 ourproducts to avoid infringement. A court could also order us to pay compensatory damages for such infringement, plus prejudgment interest and could, inaddition, treble the compensatory damages and award attorney fees. These damages could be substantial and could harm our reputation, business, financialcondition 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 bythe 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 product may not besuccessful 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 useintellectual property rights owned by or licensed to these third parties. We do not control the maintenance, prosecution, enforcement or strategy for many ofthese patents or patent application rights and as such are dependent in part on the owners of the intellectual property rights to maintain their viability.Without access to these technologies or suitable design-around or alternative technology options, our ability to conduct our business could be impairedsignificantly. -24-Table of Contents We may be subject to damages resulting from claims that we, our employees, or our independent contractors have wrongfully used or disclosed allegedtrade 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 ourcompetitors. Additionally, consultants or other independent agents with which we may contract may be or have been in a contractual arrangement with oneor more of our competitors. We may be subject to claims that these employees or independent contractors have used or disclosed such other party’s tradesecrets or other proprietary information. Litigation may be necessary to defend against these claims. Even if we are successful in defending against theseclaims, litigation could result in substantial costs and be a distraction to our management. If we fail to defend such claims, in addition to paying monetarydamages, we may lose valuable intellectual property rights or personnel. A loss of key personnel or their work product could hamper or prevent our ability tomarket existing or new products, which could severely harm our business. 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 totime with such companies, organizations or individuals are not uncommon, and we cannot assure you that we will always be able to resolve such disputes oron terms favorable to us. 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 depend on our customers’ research and development efforts and their ability to obtain funding for these efforts. Our customers include researchers at pharmaceutical and biotechnology companies, chemical and related companies, academic institutions, governmentlaboratories and private foundations. Fluctuations in the research and development budgets of these researchers and their organizations could have asignificant effect on the demand for our products. Our customers determine their research and development budgets based on several factors, including theneed to develop new products, the availability of governmental and other funding, competition and the general availability of resources. As we continue toexpand our international operations, we expect research and development spending levels in markets outside of the United States will become increasinglyimportant to us. Research and development budgets fluctuate due to changes in available resources, spending priorities, general economic conditions, institutional andgovernmental budgetary limitations and mergers of pharmaceutical and biotechnology companies. Our business could be harmed by any significant decreasein life science and high technology research and development expenditures by our customers. In particular, a small portion of our sales has been toresearchers whose funding is dependent on grants from government agencies such as the United States National Institute of Health, the National ScienceFoundation, the National Cancer Institute and similar agencies or organizations. Government funding of research and development is subject to the politicalprocess, which is often unpredictable. Other departments, such as Homeland Security or Defense, or general efforts to reduce the United States federal budgetdeficit could be viewed by the government as a higher priority. Any shift away from funding of life science and high technology research and development ordelays surrounding the approval of governmental budget proposals may cause our customers to delay or forego purchases of our products and services, whichcould 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 grantshave been frozen for extended periods or have otherwise become unavailable to various institutions without advance notice. The timing of the receipt ofgrant funds may affect the timing of purchase decisions by our customers and, as a result, cause fluctuations in our sales and operating results. -25-Table of Contents 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 remaindependent on the timing and volume of the customer’s production, over which we have no control. The demand for our products depends on regulatoryapprovals 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 under-price 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 under-price our contracts orotherwise overrun our cost estimates. Such under-pricing or significant cost overruns could have a material adverse effect on our business, results ofoperations, financial condition and cash flows. We rely on single or a limited number of third-party suppliers for the raw materials required for the production of 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 rawmaterials, involve several risks, including limited control over pricing, availability, quality and delivery schedules. We cannot be certain that our currentsuppliers will continue to provide us with the quantities of these raw materials that we require or satisfy our anticipated specifications and qualityrequirements. Any supply interruption in limited or sole sourced raw materials could materially harm our ability to manufacture our products until a newsource of supply, if any, could be identified and qualified. Although we believe there are other suppliers of these raw materials, we may be unable to find asufficient alternative supply channel in a reasonable time or on commercially reasonable terms. Any performance failure on the part of our suppliers coulddelay the development and commercialization of our products, or interrupt production of then existing products that are already marketed, which would havea material adverse effect on our business. We may not be successful in acquiring complementary businesses on favorable terms. As part of our business strategy, we intend to consider acquisitions of similar or complementary businesses. No assurance can be given that we will besuccessful in identifying attractive acquisition candidates or completing acquisitions on favorable terms. In addition, any future acquisitions will beaccompanied by the risks commonly associated with acquisitions. These risks include potential exposure to unknown liabilities of acquired companies or toacquisition costs and expenses, the difficulty and expense of integrating the operations and personnel of the acquired companies, the potential disruption tothe business of the combined company and potential diversion of our management's time and attention, the impairment of relationships with and the possibleloss of key employees and clients as a result of the changes in management, the incurrence of amortization expenses and dilution to the shareholders of thecombined company if the acquisition is made for stock of the combined company. In addition, successful completion of an acquisition may depend onconsents from third parties, including regulatory authorities and private parties, which consents are beyond our control. There can be no assurance thatproducts, technologies or businesses of acquired companies will be effectively assimilated into the business or product offerings of the combined company orwill have a positive effect on the combined company's revenues or earnings. Further, the combined company may incur significant expense to completeacquisitions and to support the acquired products and businesses. Any such acquisitions may be funded with cash, debt or equity, which could have the effectof 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, ourbusiness could be adversely affected. We depend on information systems throughout our company to control our manufacturing processes, process orders, manage inventory, process and billshipments and collect cash from our customers, respond to customer inquiries, contribute to our overall internal control processes, maintain records of ourproperty, plant and equipment, and record and pay amounts due vendors and other creditors. If we were to experience a prolonged disruption in ourinformation systems that involve interactions with customers and suppliers, it could result in the loss of sales and customers and/or increased costs, whichcould adversely affect our overall business operation. -26-Table of Contents Our cash flows and capital resources may be insufficient to make required payments on future indebtedness. On November 4, 2016, we entered into entered into a business financing agreement (the “Financing Agreement”) with Western Alliance Bank (“WesternAlliance”), in order to establish a formula based revolving credit line pursuant to which the Company may borrow an aggregate principal amount of up to$5,000,000, subject to the terms and conditions of the Financing Agreement. The interest rate will be calculated at a floating rate per month equal to (a) thegreater of (i) 3.50% per year or (ii) the Prime Rate published in the Money Rates section of the Western Edition of The Wall Street Journal, or such other rateof interest publicly announced by Lender as its Prime Rate, plus (b) 2.50 percentage points. Any borrowings, interest or other fees or obligations that theCompany owes Western Alliance pursuant to the Financing Agreement (the “Obligations”) will be become due and payable on November 4, 2018. For furtherdetails on the Loan Agreement, please refer to Note 8. Loan Payable appearing in Item 8 of this Annual Report on Form 10-K. As of December 31, 2016 and March 15, 2017, we did not have any indebtedness under the Financing Agreement. However, we may incur indebtedness inthe future and such indebtedness could have important consequences to you. For example, it could: ●make it difficult for us to satisfy our other debt obligations; ●make us more vulnerable to general adverse economic and industry conditions; ●limit our ability to obtain additional financing for working capital, capital expenditures, acquisitions and other general corporate requirements; ●expose us to interest rate fluctuations because the interest rate on the debt under the Financing Agreement is variable; ●require us to dedicate a portion of our cash flow from operations to payments on our debt, thereby reducing the availability of our cash flow foroperations and other purposes; ●limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and ●place us at a competitive disadvantage compared to competitors that may have proportionately less debt and greater financial resources. In addition, our ability to make payments or refinance our obligations depends on our successful financial and operating performance, cash flows and capitalresources, which in turn depend upon prevailing economic conditions and certain financial, business and other factors, many of which are beyond ourcontrol. These factors include, among others: ●economic and demand factors affecting our industry; ●pricing pressures; ●increased operating costs; ●competitive conditions; and ●other operating difficulties. -27-Table of Contents If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sellmaterial assets or operations, obtain additional capital or restructure our debt. In the event that we are required to dispose of material assets or operations tomeet our debt service and other obligations, the value realized on such assets or operations will depend on market conditions and the availability of buyers.Accordingly, any such sale may not, among other things, be for a sufficient dollar amount. Our obligations pursuant to the Financing Agreement are securedby a security interest in all of our assets, exclusive of intellectual property. The foregoing encumbrances may limit our ability to dispose of material assets oroperations. We also may not be able to restructure our indebtedness on favorable economic terms, if at all. We may incur additional indebtedness in the future. Our incurrence of additional indebtedness would intensify the risks described above. The Financing Agreement contains various covenants limiting the discretion of our management in operating our business. The Financing Agreement contains various restrictive covenants that limit our management's discretion in operating our business. In particular, theseinstruments limit our ability to, among other things: ●incur additional debt; ●grant liens on assets; ●make investments, including capital expenditures; ●sell or acquire assets outside the ordinary course of business; and ●make fundamental business changes. If we fail to comply with the restrictions in the Financing Agreement, a default may allow the creditors under the relevant instruments to accelerate the relateddebt and to exercise their remedies under these agreements, which will typically include the right to declare the principal amount of that debt, together withaccrued and unpaid interest and other related amounts, immediately due and payable, to exercise any remedies the creditors may have to foreclose on assetsthat are subject to liens securing that debt and to terminate any commitments they had made to supply further funds. If we are unable to maintain sales, marketing and distribution capabilities or maintain arrangements with third parties to sell, market and distribute ourproducts, 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, andthere can be no assurance that we will be able to hire or retain an effective direct sales team. Similarly, qualified independent sales representatives both withinand 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 suchrepresentatives. There can be no assurance that we will be able to enter into contracts with representatives on terms acceptable to us. Furthermore, there can beno 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 performmarketing and distribution services, our product revenue could be lower and our costs higher than if we directly marketed our products. Furthermore, to theextent that we enter into co-promotion or other marketing and sales arrangements with other companies, any revenue received will depend on the skills andefforts of others, and we do not know whether these efforts will be successful. If we are unable to establish and maintain adequate sales, marketing anddistribution capabilities, independently or with others, we will not be able to generate product revenue, and may not become profitable. -28-Table of Contents 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 thoseregarding the manufacture of products, advertising and product label claims, the distribution of our products and environmental matters. Failure tocomply 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 theDepartment of Commerce, the FDA, the FTC, the Department of Transportation and the Department of Agriculture. These regulations govern a wide variety ofproduct activities, from design and development to labeling, manufacturing, handling, sales and distribution of products. If we fail to comply with any ofthese regulations, we may be subject to fines or penalties, have to recall products and/or cease their manufacture and distribution, which would increase ourcosts and reduce our sales. We are also subject to various federal, state, local and international laws and regulations that govern the handling, transportation, manufacture, use and saleof substances that are or could be classified as toxic or hazardous substances. Some risk of environmental damage is inherent in our operations and theproducts we manufacture, sell, or distribute. Any failure by us to comply with the applicable government regulations could also result in product recalls orimpositions 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 allof these regulations, we may be subject to fines or penalties, have to recall products and/or cease their manufacture and distribution, which would increaseour costs and reduce our sales. Government regulations of our customer’s business are extensive and are constantly changing. Changes in these regulations can significantly affectcustomer 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 veryexpensive, time-consuming, and uncertain. Changes in regulations or the enforcement practices of current regulations could have a negative impact on ourcustomers and, in turn, our business. At this time, it is unknown how the FDA will interpret and to what extent it will enforce GMPs, regulations that willlikely affect many of our customers. These uncertainties may have a material impact on our results of operations, as lack of enforcement or an interpretation ofthe 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 needfor the services we provide. Governmental agencies throughout the world, including the United States, strictly regulate these industries. Our business involves helping pharmaceuticaland biotechnology companies navigate the regulatory drug approval process. Changes in regulation, such as a relaxation in regulatory requirements or theintroduction of simplified drug approval procedures, or an increase in regulatory requirements that we have difficulty satisfying or that make our services lesscompetitive, could eliminate or substantially reduce the demand for our services. Also, if the government makes efforts to contain drug costs andpharmaceutical and biotechnology company profits from new drugs, our customers may spend less, or reduce their spending on research and development. Ifhealth insurers were to change their practices with respect to reimbursements for pharmaceutical products, our customers may spend less, or reduce theirspending 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 untilsuch 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 notcurrently required to obtain regulatory approval to market our goods because, among other things, we do not (i) produce or market any clinical devices orother 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 regulatoryapproval 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 theregulatory clearance process as and if implemented by the FDA. Satisfaction of regulatory requirements typically takes many years, is dependent upon thetype, complexity and novelty of the product or service and would require the expenditure of substantial resources. -29-Table of Contents 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 andconditions for which the good is demonstrated to be safe and effective, which would limit our ability to generate revenue. We cannot ensure that any goodthat we develop will meet all of the applicable regulatory requirements needed to receive marketing clearance. Failure to obtain regulatory approval willprevent commercialization of our goods where such clearance is necessary. There can be no assurance that we will obtain regulatory approval of our proposedgoods that may require it. 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; ●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; ●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 operatingperformance of particular companies. These market fluctuations may also materially and adversely affect the market price of our common stock. 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 anumber of factors, including the fact that we are a small company that is relatively unknown to stock analysts, stock brokers, institutional investors andothers 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 riskaverse 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 havebecome 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 anadverse 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, orthat current trading levels will be sustained or not diminish. -30-Table of Contents 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 tothe 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. Thepayment of dividends on our capital stock will depend on our earnings, financial condition and other business and economic factors affecting us at such timeas 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 willonly occur if the common stock price appreciates. 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 preferencesof 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 toour stockholders. 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. Thesefluctuations 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 particularcompany’s securities, securities class action litigation has often been brought against that company. If the market price or volume of our shares suffersextreme fluctuations, then we may become involved in this type of litigation, which would be expensive and divert management’s attention and resourcesfrom 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 tothe public markets. The management has limited experience as a management team in a public company and as a result projections may not be made timelyor set at expected performance levels and could materially affect the price of our shares. Any failure to meet published forward-looking statements thatadversely affect the stock price could result in losses to investors, stockholder lawsuits or other litigation, sanctions or restrictions issued by the SEC. We have a significant number of outstanding options and warrants, and future sales of these shares could adversely affect the market price of our commonstock. As of December 31, 2016, we had outstanding options exercisable for an aggregate of 5,210,334 shares of common stock at a weighted average exercise priceof $3.47 per share and outstanding warrants exercisable for an aggregate of 470,444 shares of common stock at a weighted average exercise price of $4.15 pershare. 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 andwhen our stock price rises, if at all, more outstanding options and warrants will be in-the-money and the holders may exercise their options and warrants andsell a large number of shares. This could cause the market price of our common stock to decline. -31-Table of Contents Item 1B. Unresolved Staff Comments None. Item 2. Properties As of December 31, 2016, we lease approximately 15,000 square feet of office space in Irvine, California with 3 years remaining on the lease, approximately13,000 square feet of space for laboratory in Boulder, Colorado with 6 years remaining on the lease, approximately 10,000 square feet of space for researchand development laboratory in Longmont, Colorado with 7 years remaining on the lease and approximately 2,300 square feet of office space in Rockville,Maryland with 4 years remaining on the lease. The below table illustrates the use of each property by our business segments. Business SegmentProperty UsedIngredientsAll propertiesCore Standards and Contract ServicesIrvine, CA, Boulder, CO and Longmont, CORegulatory ConsultingPrimarily Rockville, MD We also rent an apartment with approximately 1,000 square feet in Foothill Ranch, California, and an apartment with less than 1,100 square feet inLongmont, Colorado. We use the apartments to accommodate our traveling employees to each of our California and Colorado locations. We do not own anyreal estate. For the year ended December 31, 2016, our total annual rental expense was approximately $606,000. Item 3. Legal Proceedings On December 29, 2016, ChromaDex, Inc. filed a complaint (the “Complaint”) in the United States District Court for the Central District of California, namingElysium Health, Inc. as defendant. Among other allegations, ChromaDex, Inc. alleges in the Complaint that (i) Elysium breached the Supply Agreement,dated June 26, 2014, by and between ChromaDex, Inc. and Elysium Health, LLC (“Elysium”) (the “pTeroPure® Supply Agreement”), by failing to makepayments to ChromaDex, Inc. for purchases of pTeroPure® pursuant to the pTeroPure® Supply Agreement, (ii) Elysium breached the Supply Agreement,dated February 3, 2014, by and between ChromaDex, Inc. and Elysium, as amended (the “NIAGEN® Supply Agreement”), by failing to make payments toChromaDex, Inc. for purchases of NIAGEN® pursuant to the NIAGEN® Supply Agreement, (iii) Elysium breached the Trademark License and RoyaltyAgreement, dated February 3, 2014, by and between ChromaDex, Inc. and Elysium (the “License Agreement”), by failing to make payments to ChromaDex,Inc. for royalties due pursuant to the License Agreement and (iv) certain officers of Elysium made false promises and representations to induce ChromaDex,Inc. into providing large supplies of pTeroPure® and NIAGEN® to Elysium pursuant to the pTeroPure® Supply Agreement and NIAGEN® SupplyAgreement. ChromaDex, Inc. is seeking punitive damages, money damages and interest. -32-Table of Contents On January 25, 2017, Elysium filed an answer and counterclaims (the “Counterclaim”) in response to the Complaint. Among other allegations, Elysiumalleges in the Counterclaim that (i) ChromaDex, Inc. breached the NIAGEN® Supply Agreement by not issuing certain refunds or credits to Elysium and forviolating certain confidential information provisions, (ii) ChromaDex, Inc. breached the implied covenant of good faith and fair dealing pursuant to theNIAGEN® Supply Agreement, (iii) ChromaDex, Inc. breached certain confidential provisions of the pTeroPure® Supply Agreement, (iv) ChromaDex, Inc.fraudulently induced Elysium into entering into the License Agreement (the “Fraud Claim”), (v) ChromaDex, Inc.’s conduct constitutes misuse of its patentrights (the “Patent Claim”) and (vi) ChromaDex, Inc. has engaged in unlawful or unfair competition under California state law (the “Unfair CompetitionClaim”). Elysium is seeking damages for ChromaDex, Inc.’s alleged breaches of the NIAGEN® Supply Agreement and pTeroPure® Supply Agreement, andcompensatory damages, punitive damages and/or rescission of the License Agreement and restitution of any royalty payments conveyed by Elysium pursuantto the License Agreement. On February 15, 2017, ChromaDex, Inc. filed an amended complaint (the “Amended Complaint”). In the Amended Complaint, ChromaDex, Inc. re-alleges theclaims in the Complaint, and also alleges that Elysium willfully and maliciously misappropriated ChromaDex, Inc.’s trade secrets. On February 15, 2017,ChromaDex, Inc. also filed a motion to dismiss the Fraud Claim, the Patent Claim and the Unfair Competition Claim. While ChromaDex, Inc. expresses noopinion as to the ultimate outcome of this matter, ChromaDex, Inc. believes Elysium’s allegations are without merit and will vigorously defend against them. As of December 31, 2016, ChromaDex, Inc. did not accrue a potential loss for the Counterclaim because ChromaDex, Inc. believes that the allegations arewithout merit and thus it is not probable that a liability had been incurred, and the amount of loss cannot be reasonably estimated. 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 thatis likely to have, individually or in the aggregate, a material adverse effect on our financial condition or results of operations. Item 4. Mine Safety Disclosures Not applicable. -33-Table of Contents PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Since April 25, 2016, our common stock has been traded on The NASDAQ Capital Market (“NASDAQ”) under the symbol “CDXC.” From November 10,2014 to April 22, 2016, our common stock had been traded on the top tier of the OTC Markets Group, Inc. (the “OTCQX”) under the symbol “CDXC.” On April 13, 2016, the Company effected a 1-for-3 reverse stock split. All information presented herein has been retrospectively adjusted to reflect the reversestock split as if it took place as of the earliest period presented. An additional 1,632 shares were issued to round up fractional shares as a result of the reversestock split. The following table sets forth the range of high and low sale prices of our common stock for each of the periods indicated as reported by NASDAQ andOTCQX. Closing sale prices were used for the period when our common stock was traded on NASDAQ and closing bid quotations were used for the periodwhen our common stock was traded on OTCQX. These prices reflect inter-dealer prices, without retail mark-up, mark-down or commission and may notnecessarily represent actual transactions. Fiscal Year Ending December 31, 2016Quarter Ended High Low December 31, 2016 $3.31 $2.31 October 1, 2016 $4.39 $2.88 July 2, 2016 $5.76 $2.84 April 2, 2016 $4.77 $3.60 Fiscal Year Ending January 2, 2016Quarter Ended High Low January 2, 2016 $4.56 $3.36 October 3, 2015 $4.26 $3.06 July 4, 2015 $4.44 $3.39 April 4, 2015 $4.62 $2.55 On March 9, 2017, the closing sale price was $2.71. Securities Authorized for Issuance under Equity Compensation Plans Information about our equity compensation plans is incorporated herein by reference to Item 12 of Part III of this Annual Report. -34-Table of Contents Performance Graph The performance graph below compares the annual percentage change in the cumulative total return on our common stock with the NASDAQ Capital MarketComposite Index and the S&P Small Cap 600 Health Care Index. The chart shows the value as of December 31, 2016, of $100 invested on December 31,2011. The stock price performance below is not necessarily indicative of future performance. The performance graph below is not “soliciting material,” shall not be deemed “filed” with the SEC and shall not be incorporated by reference into any of ourfilings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof andirrespective of any general incorporation language in any such filing, except as shall be expressly set forth by specific reference in such filing. 12/31/11 12/29/12 12/28/13 1/3/15 1/2/16 12/31/16 ChromaDex Corporation 100.00 101.00 290.91 163.64 221.82 200.61 NASDAQ Composite 100.00 116.41 165.47 188.69 200.32 216.54 S&P Small Cap 600 Health Care Index 100.00 109.85 159.94 170.04 184.79 180.61 -35-Table of Contents Holders of Our Common Stock As of March 9, 2017, we had approximately 51 registered holders of record of our common stock. Dividend Policy We have not declared or paid any cash dividends on our common stock during either of the two most recent fiscal years and have no current intention to payany cash dividends. Our ability to pay cash dividends is governed by applicable provisions of Delaware law and is subject to the discretion of our Board ofDirectors. Recent Sales of Unregistered Securities None. Item 6. Selected Financial Data The annual financial information set forth below has been derived from our audited consolidated financial statements. The information should be readtogether with, and is qualified in its entirety by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” theconsolidated financial statements and notes included elsewhere in this Form 10-K and in our SEC filings. The selected financial data in this section are notintended to replace our consolidated financial statements and the related notes. Our historical results are not necessarily indicative of the results that may beexpected in the future and results of interim periods are not necessarily indicative of the results for the entire year. -36-Table of Contents Years Ended 2016 2015 2014 2013 2012 Consolidated Statement of Operations Data Sales, net $26,811,086 $22,014,140 $15,313,179 $10,160,964 $11,610,494 Cost of sales 14,889,954 13,533,132 9,987,514 7,027,828 9,335,057 Gross profit 11,921,132 8,481,008 5,325,665 3,133,136 2,275,437 Operating expenses: Sales and marketing 2,250,589 2,326,788 2,136,584 2,357,605 5,520,141 Research and development 2,522,768 891,601 513,671 134,040 141,573 General and administrative 9,393,209 7,416,451 7,860,930 4,982,976 8,250,157 Loss from investment in affiliate - - 45,829 44,961 - Operating expenses 14,166,566 10,634,840 10,557,014 7,519,582 13,911,871 Operating loss (2,245,434) (2,153,832) (5,231,349) (4,386,446) (11,636,434) Nonoperating income (expenses): Interest income 2,247 3,325 2,013 1,251 3,014 Interest expense (371,899) (616,033) (158,849) (34,330) (29,006)Loss on debt extinguishment (313,099) - - - - Nonoperating expenses (682,751) (612,708) (156,836) (33,079) (25,992) Loss before income taxes (2,928,185) (2,766,540) (5,388,185) (4,419,525) (11,662,426)Provision for income taxes - (4,527) - - - Net loss $(2,928,185) $(2,771,067) $(5,388,185) $(4,419,525) $(11,662,426) Basic and Diluted loss per common share $(0.08) $(0.08) $(0.15) $(0.13) $(0.39)Basic and Diluted weighted average common shares outstanding 37,294,321 35,877,341 35,486,460 33,329,148 30,089,601 -37-Table of Contents At The End of Year 2016 2015 2014 2013 2012 Consolidated Balance Sheet Data Cash $1,642,429 $5,549,672 $3,964,750 $2,261,336 $520,000 Working capital (1) 7,786,372 4,400,432 2,189,442 1,602,008 3,717,610 Total assets 19,752,068 18,749,209 11,516,847 8,986,892 9,034,521 Long term debt - 3,345,335 1,977,113 - - Total stockholders' equity $9,974,358 $5,274,674 $3,998,391 $5,665,451 $3,993,329 (1) Trade receivables plus inventories less accounts payable. Years Ended 2016 2015 2014 2013 2012 Consolidated Cash Flow Data Net cash used in operating activities $(2,936,596) $(2,111,138) $(2,580,406) $(3,906,011) $(10,119,713) Net cash provided by (used in) investing activities (1,724,922) (647,731) 1,590,275 998,651 (76,565) Net cash provided by financing activities $754,275 $4,343,791 $2,693,545 $4,648,696 $10,296,126 -38-Table of Contents Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of financial condition and results of operation together with “Selected Financial Data,” theconsolidated financial statements and the related notes included elsewhere this Form 10-K. This discussion contains forward-looking statements thatinvolve risks and uncertainties. When reviewing the discussion below, you should keep in mind the substantial risks and uncertainties that impact ourbusiness. In particular, we encourage you to review the risks and uncertainties described in “Risk Factors” in Part I, Item 1A in this Form 10-K. These risksand uncertainties could cause actual results to differ materially from those projected in forward-looking statements contained in this report or implied bypast results and trends. Overview We are a natural products company that leverage our complementary business units to discover, acquire, develop and commercialize patented and proprietaryingredient technologies that address the dietary supplement, food, beverage, skin care and pharmaceutical markets. In addition to our ingredient technologiessegment, we also have core standards and contract services segment, which focuses on natural product fine chemicals (known as “phytochemicals”) andanalytical testing services, and regulatory consulting segment. As a result of our relationships with leading universities and research institutions, we are ableto discover and license early stage, intellectual property-backed ingredient technologies. We then utilize our in-house chemistry, regulatory and safetyconsulting business units to develop commercially viable ingredients. Our ingredient portfolio is backed with clinical and scientific research, as well asextensive intellectual property protection. The discussion and analysis of our financial condition and results of operations are based on the ChromaDex financial statements, which have been preparedin accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires making estimates and assumptionsthat 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 asthe reported revenues, if any, and expenses during the reporting periods. On an ongoing basis, we evaluate such estimates and judgments, including thosedescribed in greater detail below. We base our estimates on historical experience and on various other factors that we believe are reasonable under thecircumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent fromother sources. Actual results may differ from these estimates under different assumptions or conditions. On November 4, 2016, we entered into a business financing agreement with Western Alliance Bank, in order to establish a formula based revolving credit lineup to $5.0 million. As of December 31, 2016, the Company failed to meet one of the covenants of the business financing agreement, which was to at leastmeet 50% of projections of EBDAS and was in default under the agreement (the “Existing Default.”). On March 12, 2017, the Company entered into amodification agreement with Western Alliance under which Western Alliance waived the Existing Default. As of March 15, 2017, we have not borrowed fromthis revolving credit line. We anticipate that our current cash, cash equivalents, cash to be generated from operations and the established $5.0 millionrevolving credit line will be sufficient to meet our projected operating plans through at least March 17, 2018. We may, however, seek additional capital priorto March 17, 2018, both to meet our projected operating plans after March 17, 2018 and/or to fund our longer term strategic objectives. Additional capital may come from public and/or private stock or debt offerings, borrowings under lines of credit or other sources. These additional funds maynot be available on favorable terms, or at all. Further, if we issue equity or debt securities to raise additional funds, our existing stockholders may experiencedilution and the new equity or debt securities we issue may have rights, preferences and privileges senior to those of our existing stockholders. In addition, ifwe raise additional funds through collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to our products orproprietary 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 todevelop or enhance our products, obtain the required regulatory clearances or approvals, achieve long term strategic objectives, take advantage of futureopportunities, or respond to competitive pressures or unanticipated customer requirements. Any of these events could adversely affect our ability to achieveour development and commercialization goals, which could have a material and adverse effect on our business, results of operations and financial condition. -39-Table of Contents Some of our operations are subject to regulation by various state and federal agencies. Dietary supplements are subject to FDA, FTC and U.S. Department ofAgriculture regulations relating to composition, labeling and advertising claims. These regulations may in some cases, particularly with respect to thoseapplicable to new ingredients, require a notification that must be submitted to the FDA along with evidence of safety. There are similar regulations related tofood additives. Results of Operations Our net sales for the twelve-month periods ended December 31, 2016, January 2, 2016 and January 3, 2015 were approximately $26,811,000, $22,014,000and $15,313,000, respectively. We incurred a net loss of approximately $2,928,000, $2,771,000 and $5,388,000 for the twelve-month periods endedDecember 31, 2016, January 2, 2016 and January 3, 2015, respectively. This equated to $0.08, $0.08 and $0.15 losses per basic and diluted share for thetwelve-month periods ended December 31, 2016, January 2, 2016 and January 3, 2015, respectively. Over the next two years, we plan to continue to increase research and development efforts for our line of proprietary ingredients, subject to available financialresources. Twelve months ending Dec. 31, 2016 Jan. 2, 2016 Jan. 3, 2015 Sales $26,811,086 $22,014,140 $15,313,179 Cost of sales 14,889,954 13,533,132 9,987,514 Gross profit 11,921,132 8,481,008 5,325,665 Operating expenses -Sales and marketing 2,250,589 2,326,788 2,136,584 -Research and development 2,522,768 891,601 513,671 -General and administrative 9,393,209 7,416,451 7,860,930 -Loss from investment in affiliate - - 45,829 Nonoperating -Interest income 2,247 3,325 2,013 -Interest expenses (371,899) (616,033) (158,849) -Loss on debt extinguishment (313,099) - - Provision for income taxes - (4,527) - Net loss $(2,928,185) $(2,771,067) $(5,388,185) Year Ended December 31, 2016 Compared to Year Ended January 2, 2016 Net Sales. Net sales consist of gross sales less discounts and returns. Twelve months ending December 31,2016 January 2,2016 Change Net sales: Ingredients $16,775,000 $12,542,000 34% Core standards and contract services 9,371,000 8,419,000 11% Scientific and regulatory consulting 665,000 1,053,000 -37% Total net sales $26,811,000 $22,014,000 22% ●The increase in sales for the ingredients segment is due to increased sales of “NIAGEN®” and “PTEROPURE®.” ●The increase in sales for the core standards and contract services segment is primarily due to increased sales of analytical testing and contractservices. ●The decrease in sales for the scientific and regulatory consulting segment is primarily due to a further emphasis on intercompany work supportingour ingredients segment. -40-Table of Contents Cost of Sales. Costs of sales include raw materials, labor, overhead, and delivery costs. Twelve months ending December 31, 2016 January 2, 2016 Amount % ofnet sales Amount % ofnet sales Cost of sales: Ingredients $7,921,000 47% $6,664,000 53% Core standards and contract services 6,504,000 69% 6,347,000 75% Scientific and regulatory consulting 465,000 70% 522,000 50% Total cost of sales $14,890,000 56% $13,533,000 61% The cost of sales, as a percentage of net sales, decreased 5%. ●The decrease in cost of sales, as a percentage of net sales, for the ingredients segment is largely due to price reductions from our suppliers throughincreased purchase volumes. ●The cost of sales, as a percentage of net sales for the core standards and contract services segment, decreased 6%. The increase in analytical testingand contract services sales led to a higher labor utilization rate, which resulted in lowering our cost of sales as a percentage of net sales. ●The percentage increase in cost of sales for the scientific and regulatory consulting segment is largely due to a further emphasis on intercompanywork. Fixed labor costs make up the majority of costs for the consulting segment. Gross Profit. Gross profit is net sales less the cost of sales and is affected by a number of factors including product mix, competitive pricing and costs ofproducts and services. Twelve months ending December 31,2016 January 2,2016 Change Gross profit: Ingredients $8,854,000 $5,878,000 51% Core standards and contract services 2,867,000 2,072,000 38% Scientific and regulatory consulting 200,000 531,000 -62% Total gross profit $11,921,000 $8,481,000 41% ●The gross profit for the ingredients segment increased due to the increased sales of the ingredient portfolio we offer, coupled with lower prices fromour suppliers due to increased purchase volumes. ●The increased gross profit for the core standards and contract services segment is largely due to the increased sale of analytical testing and contractservices. Fixed labor costs make up the majority of costs for analytical testing and contract services and these fixed labor costs did not increase inproportion to sales, hence yielding higher profit margin. ●The decreased gross profit for the scientific and regulatory consulting segment is largely due to a greater focus on intercompany work supporting ouringredients segment. -41-Table of Contents Operating Expenses – Sales and Marketing. Sales and Marketing Expenses consist of salaries, advertising and marketing expenses. Twelve months ending December 31,2016 January 2,2016 Change Sales and marketing expenses: Ingredients $1,197,000 $1,112,000 8% Core standards and contract services 1,043,000 1,202,000 -13% Scientific and regulatory consulting 11,000 13,000 -15% Total sales and marketing expenses $2,251,000 $2,327,000 -3% ●For the ingredients segment, the increase is largely due to increased marketing efforts to raise the consumer awareness for our line of proprietaryingredients. ●For the core standards and contract services segment, the decrease is largely due to making certain operational changes as certain personnel whowere previously assigned to the sales and marketing group were moved to an administrative group. We do anticipate increased expenses goingforward as we increase marketing efforts and hire additional staff. ●For the scientific and regulatory consulting segment, we had limited sales and marketing expenses. Operating Expenses – Research and Development. Research and Development Expenses consist of clinical trials and process development expenses. Twelve months ending December 31,2016 January 2,2016 Change Research and development expenses: Ingredients $2,488,000 $892,000 179% Core standards and contract services 35,000 - Total research and development expenses $2,523,000 $892,000 183% ●For the ingredients segment, we increased our research and development efforts with a focus on our “NIAGEN®” brand. Subject to availablefinancial resources, we plan to continue to increase research and development efforts for our line of proprietary ingredients. ●For the core standards and contract services segment, the expense is mainly associated with exploring processes to develop certain compounds at alarger scale. -42-Table of Contents Operating Expenses – General and Administrative. General and Administrative Expenses consist of general company administration, IT, accounting andexecutive management expenses. Twelve months ending December 31,2016 January 2,2016 Change General and administrative $9,393,000 $7,416,000 27% ●One of the factors that contributed to the increase in general and administrative expenses was an increase in bad debt expense. Our bad debt expensefor 2016 increased to approximately $870,000 compared to $379,000 for 2015. In December 2016, we recorded an allowance of $500,000 for acertain doubtful account against bad debt expenses. ●Another factor that contributed to the increase was an increase in patent maintenance expense. Our patent maintenance expense for 2016 increasedto approximately $652,000 compared to approximately $371,000 for 2015. ●Another factor that contributed to the increase was an increase of approximately $531,000 in expenses associated with administrative staff. We madecertain operational changes as certain personnel who were previously assigned to our sales and marketing group were moved to an administrativegroup in 2016. ●Another factor that contributed to the increase in general and administrative expense was an increase in royalties we pay to patent holders as thesales for licensed products increased in 2016. For 2016, royalty expense increased to approximately $713,000, compared to approximately$526,000 for 2015. ●Also, there were one-time expenses of approximately $89,000 associated with the initial listing of the Company’s stock in the NASDAQ CapitalMarket in 2016. ●These increases in expenses were offset by the decrease in share-based compensation expense. For 2016, our share-based compensation expensedecreased to approximately $1,194,000 compared to approximately $1,978,000 for 2015. Nonoperating – Interest Income. Interest income consists of interest earned on money market accounts. Interest income for the twelve-month period endedDecember 31, 2016, was approximately $2,000, a slight decrease compared to approximately $3,000 for the twelve-month period ended January 2, 2016. Nonoperating – Interest Expense. Interest expense consists of interest on loan payable and capital leases. Twelve months ending December 31,2016 January 2,2016 Change Interest expense $372,000 $616,000 -40% ●The decrease in interest expense was mainly related to the Term Loan Agreement dated September 29, 2014, between the Company and HerculesTechnology II, L.P, which the Company drew down an initial $2.5 million on September 29, 2014 and a second $2.5 million on June 18, 2015. TheCompany fully repaid the loan on June 14, 2016. -43-Table of Contents Depreciation and Amortization. For the twelve-month period ended December 31, 2016, we recorded approximately $332,000 in depreciation compared toapproximately $286,000 for the twelve-month period ended January 2, 2016. We depreciate our assets on a straight-line basis, based on the estimated usefullives of the respective assets. We amortize intangible assets using a straight-line method, generally over 10 years. For licensed patent rights, the useful livesare 10 years or the remaining term of the patents underlying licensing rights, whichever is shorter. The useful lives of subsequent milestone payments that arecapitalized are the remaining useful life of the initial licensing payment that was capitalized. In the twelve-month period ended December 31, 2016, werecorded amortization on intangible assets of approximately $88,000 compared to approximately $45,000 for the twelve-month period ended January 2,2016. Income Taxes. At December 31, 2016 and January 2, 2016, the Company maintained a full valuation allowance against the entire deferred income tax balancewhich resulted in an effective tax rate of 0% for 2016 and 0.2% for 2015. Net cash used in operating activities. Net cash used in operating activities for the twelve-month period ended December 31, 2016 was approximately$2,937,000 as compared to approximately $2,111,000 for the twelve-month period ended January 2, 2016. Along with the net loss, an increase in tradereceivables were the largest uses of cash during the twelve-month period ended December 31, 2016. Net cash used in operating activities for the twelve-month period ended January 2, 2016 largely reflects increase in inventories, trade receivables along with the net loss, as well. We expect our operating cash flows to fluctuate significantly in future periods as a result of fluctuations in our operating results, shipment timetables,accounts 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 $1,725,000 for the twelve-month period ended December 31,2016, compared to approximately $648,000 for the twelve-month period ended January 2, 2016. Net cash used in investing activities for the twelve-monthperiod ended December 31, 2016 mainly consisted of purchases of leasehold improvements and equipment and intangible assets. Net cash used in investingactivities for the twelve-month period ended January 2, 2016 also consisted of purchases of leasehold improvements and equipment and intangible assets. Net cash provided by financing activities. Net cash provided by financing activities was approximately $754,000 for the twelve-month period endedDecember 31, 2016, compared to approximately $4,344,000 for the twelve-month period ended January 2, 2016. Net cash provided by financing activitiesfor 2016 mainly consisted of proceeds from issuances of our common stock and warrants through a private offering to our existing stockholders and exerciseof stock options, offset by principal payments on loan payable and capital leases. Net cash provided by financing activities for 2015 consisted of proceedsfrom loan payable and issuances of our common stock and warrants through a private offering to our existing stockholders. Trade Receivables. As of December 31, 2016, we had approximately $5,852,000 in trade receivables as compared to approximately $2,451,000 as of January2, 2016. This increase was largely due to the increase in our ingredients segment sales. Inventories. As of December 31, 2016, we had approximately $7,913,000 in inventory, compared to approximately $8,174,000 as of January 2, 2016. As ofDecember 31, 2016, our inventory consisted of approximately $7,016,000 of bulk ingredients and approximately $897,000 of phytochemical referencestandards. Bulk ingredients are proprietary compounds sold to customers in larger quantities, typically in kilograms. These ingredients are used by ourcustomers in the dietary supplement, food and beverage, animal health, cosmetic and pharmaceutical industries to manufacture their final products.Phytochemical reference standards are small quantities of plan-based compounds typically used to research an array of potential attributes or for qualitycontrol purposes. The Company currently lists over 1,800 phytochemicals and 400 botanical reference materials in our catalog and holds a lot of these asinventory in small quantities, mostly in grams and milligrams. -44-Table of Contents Our normal operating cycle for reference standards is currently longer than one year. Due to the large number of different items we carry, certain groups ofthese reference standards have sales frequency that is slower than others and varies greatly year to year. In addition, for certain reference standards, the costsaving is advantageous when purchased in larger quantities and we have taken advantage of such opportunities when available. Such factors have resulted inan operating cycle to be more than one year on average. The Company gains competitive advantage through the broad offering of reference standards and itis critical for the Company to continue to expand its library of reference standards it offers for the growth of business. Nevertheless, the Company has recentlymade changes in its reference standards inventory purchasing practice, which the management believes will result in an improved turnover rate and shorteroperating cycle without impacting our competitive advantage. The Company regularly reviews inventories on hand and reduces the carrying value for slow-moving and obsolete inventory, inventory not meeting qualitystandards and inventory subject to expiration. The reduction of the carrying value for slow-moving and obsolete inventory is based on current estimates offuture product demand, market conditions and related management judgment. Any significant unanticipated changes in future product demand or marketconditions that vary from current expectations could have an impact on the value of inventories. We strive to optimize our supply chain as we constantly search for better and more reliable sources and suppliers of bulk ingredients and phytochemicalreference standards. By doing so, we believe we can lower the costs of our inventory, which we can then pass along the savings to our customers. In addition,we are working with our suppliers and partners to develop more efficient manufacturing methods of the raw materials, in an effort to lower the costs of ourinventory. Accounts Payable. As of December 31, 2016, we had $5,978,000 in accounts payable compared to approximately $6,224,000 as of January 2, 2016. Advances from Customers. As of December 31, 2016, we had approximately $389,000 in advances from customers compared to approximately $272,000 as ofJanuary 2, 2016. These advances are for large-scale consulting projects, contract services and contract research projects where we require a deposit beforebeginning work. This increase was due to obtaining more of such large-scale projects during the 2nd half of the twelve-month period ended December 31,2016. Year Ended January 2, 2016 Compared to Year Ended January 3, 2015 Net Sales. Net sales consist of gross sales less discounts and returns. Twelve months ending January 2,2016 January 3,2015 Change Net sales: Ingredients $12,542,000 $6,857,000 83% Core standards and contract services 8,419,000 7,487,000 12% Scientific and regulatory consulting 1,053,000 969,000 9% Total net sales $22,014,000 $15,313,000 44% ●The increase in sales for the ingredients segment is due to increased sales throughout most of the ingredients we sell, with “NIAGEN®” contributinga majority of the increase. ●The increase in sales for the core standards and contract services segment is primarily due to increased sales of analytical testing and contractservices. ●The increase in sales for the scientific and regulatory consulting segment is due to the timing of completion of consulting projects for customers. -45-Table of Contents Cost of Sales. Costs of sales include raw materials, labor, overhead, and delivery costs. Twelve months ending January 2, 2016 January 3, 2015 Amount % ofnet sales Amount % ofnet sales Cost of sales: Ingredients $6,664,000 53% $4,257,000 62% Core standards and contract services 6,347,000 75% 5,141,000 69% Scientific and regulatory consulting 522,000 50% 589,000 61% Total cost of sales $13,533,000 61% $9,987,000 65% The cost of sales, as a percentage of net sales, decreased 4%. ●The decrease in cost of sales, as a percentage of net sales, for the ingredients segment is largely due to price reductions from our suppliers throughincreased purchase volumes. ●The increase in cost as a percentage of net sales for the core standards and contract services segment is mainly due to increased costs in fine chemicalreference standards as we reduced the carrying values for the portion of the inventory that are considered slow-moving and obsolete. ●The percentage decrease in cost of sales for the scientific and regulatory consulting segment is largely due to higher utilizations of in-houseconsulting labor versus 3rd party consultants. Gross Profit. Gross profit is net sales less the cost of sales and is affected by a number of factors including product mix, competitive pricing and costs ofproducts and services. Twelve months ending January 2,2016 January 3,2015 Change Gross profit: Ingredients $5,878,000 $2,600,000 126% Core standards and contract services 2,072,000 2,346,000 -12% Scientific and regulatory consulting 531,000 380,000 40% Total gross profit $8,481,000 $5,326,000 59% ●The increased gross profit for the ingredients segment is due to the increased sales of the ingredient portfolio we offer, as well as lower prices fromour suppliers as a result of increased purchase volumes. ●The decreased gross profit for the core standards and contract services segment is largely due to increased costs in fine chemical reference standardsas we reduced the carrying values for the portion of the inventory that are considered slow-moving and obsolete. ●The increased gross profits for the scientific and regulatory consulting segment are largely due to higher utilizations of in-house consulting labor. -46-Table of Contents Operating Expenses – Sales and Marketing. Sales and Marketing Expenses consist of salaries, advertising and marketing expenses. Twelve months ending January 2,2016 January 3,2015 Change Sales and marketing expenses: Ingredients $1,112,000 $1,081,000 3% Core standards and contract services 1,202,000 976,000 23% Scientific and regulatory consulting 13,000 80,000 -84% Total sales and marketing expenses $2,327,000 $2,137,000 9% ●For the ingredients segment, we were able to maintain sales and marketing expenses at a similar level to 2014 despite the significant increase insales. We do anticipate some increased expenses going forward as we increase marketing efforts for our proprietary ingredients. ●For the core standards and contract services segment, the increases are largely due to hiring additional sales and marketing staff and making certainoperational changes. Wages and travel expenses for sales and marketing staff increased by approximately $164,000 in 2015, compared to 2014. ●For the scientific and regulatory consulting segment, we had significantly reduced sales and marketing expenses compared to 2014 and plan oncontinuing to do so in the future. Operating Expenses – Research and Development. Research and Development Expenses mainly consist of clinical trials and process development expensesfor our line of proprietary ingredients. Twelve months ending January 2,2016 January 3,2015 Change Research and development expenses: Ingredients $892,000 $514,000 74% ●All our research and development efforts are for the ingredients segment. In 2015, we increased our research and development efforts with a focus onour “NIAGEN®” brand. Operating Expenses – General and Administrative. General and Administrative Expenses consist of general company administration, IT, accounting andexecutive management expenses. Twelve months ending January 2,2016 January 3,2015 Change General and administrative $7,416,000 $7,861,000 -6% ●One of the factors that contributed to the decrease in general and administrative expenses was a decrease in share-based compensation. In 2015, ourshare-based compensation decreased to approximately $1,978,000, compared to approximately $2,917,000 in 2014. In 2014, we had higher share-based compensation expenses as we awarded an aggregate of 1,090,000 shares of restricted stock to the Company’s officers and members of theboard of directors. The fair values of these restricted stock awards were approximately $1,537,000 in aggregate, which were expensed over a periodof six months from January 2, 2014 to July 1, 2014. -47-Table of Contents Nonoperating – Interest Income. Interest income consists of interest earned on money market accounts. Interest income for the twelve-month period endedJanuary 2, 2016, was approximately $3,000, a slight increase compared to approximately $2,000 for the twelve-month period ended January 3, 2015. Nonoperating – Interest Expense. Interest expense consists of interest on loan payable and capital leases. Twelve months ending January 2,2016 January 3,2015 Change Interest expense $616,000 $159,000 287% ●The increase in interest expense was mainly related to the Term Loan Agreement dated September 29, 2014, between the Company and HerculesTechnology II, L.P, which the Company drew down first $2.5 million on September 29, 2014 and second $2.5 million on June 18, 2015. For moreinformation on this term loan, please refer to Note 7 of Financial Statements appearing in Part II, Item 8 of this report. Depreciation and Amortization. For the twelve-month period ended January 2, 2016, we recorded approximately $286,000 in depreciation compared toapproximately $223,000 for the twelve-month period ended January 3, 2015. In the twelve-month period ended January 2, 2016, we recorded amortizationon intangible assets of approximately $45,000 compared to approximately $36,000 for the twelve-month period ended January 3, 2015. Income Taxes. At January 2, 2016 and January 3, 2015, the Company maintained a full valuation allowance against the entire deferred income tax balancewhich resulted in an effective tax rate of 0.2% for 2015 and 0% for 2014. Net cash used in operating activities. Net cash used in operating activities for the twelve-month period ended January 2, 2016 was approximately $2,111,000as compared to approximately $2,580,000 for the twelve-month period ended January 3, 2015. Along with the net loss, an increase in inventories and tradereceivables were the largest uses of cash during the twelve-month period ended January 2, 2016. Net cash used in operating activities for the twelve-monthperiod ended January 3, 2015 largely reflects increase in inventories, trade receivables along with the net loss, as well. Net cash provided by (used in) investing activities. Net cash used in investing activities was approximately $648,000 for the twelve-month period endedJanuary 2, 2016, compared to approximately $1,590,000 provided by for the twelve-month period ended January 3, 2015. Net cash used in investingactivities for the twelve-month period ended January 2, 2016 mainly consisted of purchases of leasehold improvements and equipment and intangible assets.Net cash provided by investing activities for the twelve-month period ended January 3, 2015 principally consisted of proceeds received from unrelated thirdparties from the assignment of the Senior Note and the sale of the Preferred Shares. NeutriSci originally issued the Senior Note and the Preferred Shares to theCompany as a part of the consideration for the purchase of BluScience product line. Net cash provided by financing activities. Net cash provided by financing activities was approximately $4,344,000 for the twelve-month period endedJanuary 2, 2016, compared to approximately $2,694,000 for the twelve-month period ended January 3, 2015. Net cash provided by financing activities forthe twelve-month period ended January 2, 2016 mainly consisted of proceeds from the 2nd draw of the term loan we entered into with Hercules Technology II,L.P, as well as proceeds from issuance of our common stock and warrants through a private offering to our existing stockholders. Net cash provided byfinancing activities for the twelve-month period ended January 3, 2015 mainly consisted of proceeds from the loan we entered into with HerculesTechnology II, L.P. -48-Table of Contents Liquidity and Capital Resources For the twelve-month periods ended December 31, 2016, January 2, 2016 and January 3, 2015, the Company has incurred operating losses of approximately$2,245,000, $2,154,000 and $5,231,000, respectively. Net cash used in operating activities for the twelve-month periods ended December 31, 2016, January2, 2016 and January 3, 2015 was approximately $2,937,000, $2,111,000 and $2,580,000, respectively. The losses and the uses of cash are primarily due toexpenses associated with the development and expansion of our operations. These operations have been financed through capital contributions, the issuanceof 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 remaindependent upon a variety of factors, including cash flow from operations, the ability to increase sales, increasing our gross profits from current levels,reducing sales and administrative expenses as a percentage of net sales, continued development of customer relationships, and our ability to market our newproducts successfully. However, based on our results from operations, we may determine that we need additional financing to implement our business plan.Additional financing may come from public and private equity or debt offerings, borrowings under lines of credit or other sources. These additional fundsmay not be available on favorable terms, or at all. There can be no assurance we will be successful in raising these additional funds. Without adequatefinancing we may have to further delay or terminate product or service expansion plans. Any inability to raise additional financing would have a materialadverse effect on us. On November 4, 2016, we entered into a business financing agreement with Western Alliance Bank, in order to establish a formula based revolving credit lineup to $5.0 million. As of December 31, 2016, the Company failed to meet one of the covenants of the business financing agreement, which was to at leastmeet 50% of projections of EBDAS and was in default under the agreement (the “Existing Default.”). On March 12, 2017, the Company entered into amodification agreement with Western Alliance under which Western Alliance waived the Existing Default. While, we anticipate that our current cash, cashequivalents, cash to be generated from operations and the established $5.0 million revolving credit line will be sufficient to meet our projected operatingplans through at least March 17, 2018, we may seek additional capital prior to March 17, 2018, both to meet our projected operating plans through and afterMarch 17, 2018 and to fund our longer term strategic objectives. To the extent we are unable to raise additional cash or generate sufficient revenue to meetour projected operating plans prior to March 17, 2018, we will revise our projected operating plans accordingly. Dividend Policy We have not declared or paid any cash dividends on our common stock. We presently intend to retain earnings for use in our operations and to finance ourbusiness. Any change in our dividend policy is within the discretion of our board of directors and will depend, among other things, on our earnings, debtservice and capital requirements, restrictions in financing agreements, if any, business conditions, legal restrictions and other factors that our board ofdirectors deems relevant. Off-Balance Sheet Arrangements During the fiscal years ended December 31, 2016 and January 2, 2016, we had no off-balance sheet arrangements other than ordinary operating leases asdisclosed in the accompanying financial statements. -49-Table of Contents Contractual Obligations and Commitments The following table summarizes our contractual obligations and other commitments as of December 31, 2016: Payments due by period Total 2017 2018 2019 2020 2021 Capital leases 670,000 297,000 248,000 89,000 36,000 - Operating leases 2,949,000 682,000 682,000 644,000 479,000 462,000 Purchase obligations 3,524,000 3,096,000 428,000 - - - Total $7,143,000 $4,075,000 $1,358,000 $733,000 $515,000 $462,000 Capital leases. We lease equipment under capitalized lease obligations with a term of typically 4 or 5 years. We make monthly instalment payments for theseleases. Operating leases. We lease our office and research facilities in California, Colorado and Maryland under operating lease agreements that expire at variousdates from September 2017 through February 2024. We make monthly payments on these leases. Purchase obligations. We enter into purchase obligations with various vendors for goods and services that we need for our operations. The purchaseobligations for goods and services include inventory, research and development, and outsourced laboratory services. Critical Accounting Policies The discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared inaccordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires us to make estimates and judgmentsthat affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures. On an ongoing basis, we evaluate these estimates,including those related to the valuation of share-based payments. We base our estimates on historical experience and on various other assumptions that arebelieved to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilitiesthat are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe that of our significant accounting policies, which are described in Note 2 of the Financial Statements, set forth in Item 8, the followingaccounting policies involve the greatest degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid infully understanding and evaluating our consolidated financial condition and results of operations. Revenue recognition: The Company recognizes sales and the related cost of sales at the time the merchandise is shipped to customers or service is performed,when each of the following conditions have been met: an arrangement exists, delivery has occurred, there is a fixed price, and collectability is reasonablyassured. Discounts, returns and allowances related to sales, including an estimated reserve for returns and allowances, are recorded as reduction of revenue. Shipping and handling fees billed to customers and the cost of shipping and handling fees billed to customers are included in Net sales. Shipping andhandling fees not billed to customers are recognized as cost of sales. Taxes collected from customers and remitted to governmental authorities are excluded from revenue, which is presented on a net basis in the statement ofoperations. -50-Table of Contents Inventories: Inventories are comprised of raw materials, work-in-process and finished goods. They are stated at the lower of cost, determined by the first-in,first-out method, or market. The inventory on the balance sheet is reflected net of valuation allowances. Labor and overhead has been added to inventory thatwas manufactured or characterized by the Company. The Company regularly reviews inventories on hand and reduces the carrying value for slow-moving and obsolete inventory, inventory not meeting qualitystandards and inventory subject to expiration. The reduction of the carrying value for slow-moving and obsolete inventory is based on current estimates offuture product demand, market conditions and related management judgment. Any significant unanticipated changes in future product demand or marketconditions that vary from current expectations could have an impact on the value of inventories. Share-based compensation: The Company has an Equity Incentive Plan under which the Board of Directors may grant restricted stock or stock options toemployees and non-employees. For employees, share-based compensation cost is recorded for all option grants and awards of non-vested stock based on thegrant date fair value of the award, and is recognized over the period the employee is required to provide services for the award. For non-employees, share-based compensation cost is recorded for all option grants and awards of non-vested stock and is remeasured over the vesting term as earned. The expense isrecognized over the period the non-employee is required to provide services for the award. The Company recognizes compensation expense over the requisite service period using the straight-line method for option grants without performanceconditions. For stock options that have both service and performance conditions, the Company recognizes compensation expense using the gradedattribution method. Compensation expense for stock options with performance conditions is recognized only for those awards expected to vest. From time to time, the Company awards shares of its common stock to non-employees for services provided or to be provided. The fair value of the awards aremeasured either based on the fair market value of stock at the date of grant or the value of the services provided, based on which is more reliably measurable.Since these stock awards are fully vested and non-forfeitable, upon issuance the measurement date for the award is usually reached on the date of the award. Item 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk We may become exposed to risks associated with changes in interest rates in connection with our credit facility with Western Alliance. As of December 31,2016, we did not have an outstanding loan payable balance, however, we established a formula based revolving credit line with Western Alliance Bank,pursuant to which we may borrow an aggregate principal amount of up to $5,000,000, subject to certain terms and conditions. If we decide to borrow fromthis credit line, the interest rate will be calculated at a floating rate per month equal to the greater of 3.50% per year or the Prime Rate published in the MoneyRates section of the Western Edition of The Wall Street Journal, or such other rate of interest publicly announced by Lender as its Prime Rate, plus 2.50percentage points, plus an additional 5.00 percentage points during any period that an event of default has occurred and is continuing. If the Prime Rate rises,we will incur more interest expenses. Any borrowing, interest or other fees or obligations that we owe Western Alliance will become due and payable onNovember 4, 2018. Our capital lease obligations bear interest at a fixed rate and therefore have no exposure to changes in interest rates. The Company’s cash consists of short term, high liquid investments in money market funds managed by banks. Due to the short-term duration of ourinvestment portfolio and the relatively low risk profile of our investments, a sudden change in interest rates would not have a material effect on either the fairmarket value of our portfolio, our operating results or our cash flows. Foreign Currency Risk All of our long-lived assets are located within the United States and we do not hold any foreign currency denominated financial instruments. Effects of Inflation We do not believe that inflation has had a material effect on our results of operations or financial condition during the periods presented. -51-Table of Contents Item 8. Financial Statements and Supplementary Data The financial statements are set forth in the pages listed below. PageReport of Independent Registered Public Accounting Firm 53Consolidated Balance Sheets at December 31, 2016 and January 2, 2016 54Consolidated Statements of Operations for the Years Ended December 31, 2016, January 2, 2016 and January 3, 2015 55Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2016, January 2, 2016 and January 3, 2015 56Consolidated Statements of Cash Flows for the Years Ended December 31, 2016, January 2, 2016 and January 3, 2015 57Notes to Consolidated Financial Statements 58 -52-Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Audit Committee of theBoard of Directors and Shareholders ofChromaDex Corporation We have audited the accompanying consolidated balance sheets of ChromaDex Corporation and Subsidiaries (the “Company”) as of December 31, 2016 andJanuary 2, 2016, and the related consolidated statements of operations, stockholders’ equity and cash flows for the years ended December 31, 2016, January2, 2016 and January 3, 2015. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to expressan opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An auditalso includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principlesused and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide areasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position ofChromaDex Corporation and Subsidiaries, as of December 31, 2016 and January 2, 2016, and the consolidated results of its operations and its cash flows forthe years ended December 31, 2016, January 2, 2016 and January 3, 2015 in conformity with accounting principles generally accepted in the United States ofAmerica. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), ChromaDex Corporation andSubsidiaries’ internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control - Integrated Frameworkissued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 16, 2017 expressed an unqualified opinionon the effectiveness of the Company’s internal control over financial reporting. /s/ Marcum llp Marcum LLPNew York, NYMarch 16, 2017 -53-Table of Contents ChromaDex Corporation and Subsidiaries Consolidated Balance Sheets December 31, 2016 and January 2, 2016 2016 2015 Assets Current Assets Cash $1,642,429 $5,549,672 Trade receivables 5,852,030 2,450,591 Inventories 7,912,630 8,173,799 Prepaid expenses and other assets 329,854 373,567 Total current assets 15,736,943 16,547,629 Leasehold Improvements and Equipment, net 3,111,374 1,788,645 Deposits 397,207 58,883 Intangible assets, net 486,226 354,052 Long-term investment, related party 20,318 - Total assets $19,752,068 $18,749,209 Liabilities and Stockholders' Equity Current Liabilities Accounts payable $5,978,288 $6,223,958 Accrued expenses 2,170,172 1,302,865 Current maturities of loan payable - 1,528,578 Current maturities of capital lease obligations 255,461 219,689 Customer deposits and other 389,010 272,002 Deferred rent, current 76,219 39,529 Total current liabilities 8,869,150 9,586,621 Loan payable, less current maturities, net - 3,345,335 Capital lease obligations, less current maturities 343,589 444,589 Deferred rent, less current 564,971 97,990 Total liabilities 9,777,710 13,474,535 Commitments and contingencies Stockholders' Equity Common stock, $.001 par value; authorized 150,000,000 shares; issued and outstanding 2016 37,544,531 and 2015 36,003,589 shares 37,545 36,004 Additional paid-in capital 55,160,387 47,534,059 Accumulated deficit (45,223,574) (42,295,389)Total stockholders' equity 9,974,358 5,274,674 Total liabilities and stockholders' equity $19,752,068 $18,749,209 See Notes to Consolidated Financial Statements. -54-Table of Contents ChromaDex Corporation and Subsidiaries Consolidated Statements of Operations Years Ended December 31, 2016, January 2, 2016 and January 3, 2015 2016 2015 2014 Sales, net $26,811,086 $22,014,140 $15,313,179 Cost of sales 14,889,954 13,533,132 9,987,514 Gross profit 11,921,132 8,481,008 5,325,665 Operating expenses: Sales and marketing 2,250,589 2,326,788 2,136,584 Research and development 2,522,768 891,601 513,671 General and administrative 9,393,209 7,416,451 7,860,930 Loss from investment in affiliate - - 45,829 Operating expenses 14,166,566 10,634,840 10,557,014 Operating loss (2,245,434) (2,153,832) (5,231,349) Nonoperating income (expense): Interest income 2,247 3,325 2,013 Interest expense (371,899) (616,033) (158,849)Loss on debt extinguishment (313,099) - - Nonoperating expenses (682,751) (612,708) (156,836) Loss before income taxes (2,928,185) (2,766,540) (5,388,185)Provision for income taxes - (4,527) - Net loss $(2,928,185) $(2,771,067) $(5,388,185) Basic and Diluted loss per common share $(0.08) $(0.08) $(0.15) Basic and Diluted weighted average common shares outstanding 37,294,321 35,877,341 35,486,460 See Notes to Consolidated Financial Statements. -55-Table of Contents ChromaDex Corporation and Subsidiaries Consolidated Statement of Stockholders' EquityYears Ended December 31, 2016, January 2, 2016 and January 3, 2015 Total Common Stock Additional Accumulated Stockholders' Shares Amount Paid-inCapital Deficit Equity Balance, December 28, 2013 34,841,579 $34,841 $39,766,747 $(34,136,137) $5,665,451 Issuance of warrant - - 246,189 - 246,189 Exercise of stock options 178,238 178 466,971 - 467,149 Issuance of unvested restricted stock 395,333 395 791 - 1,186 Unvested restricted stock (395,333) (395) (791) - (1,186) Share-based compensation 28,333 29 2,861,264 - 2,861,293 Stock issued to settle outstanding payable balance 42,202 42 146,452 - 146,494 Net loss - - - (5,388,185) (5,388,185) Balance, January 3, 2015 35,090,352 35,090 43,487,623 (39,524,322) 3,998,391 Issuance of common stock, net of offering costs of $25,000 533,334 534 1,974,359 - 1,974,893 Exercise of stock options 40,236 40 94,806 - 94,846 Vested restricted stock 228,000 228 (228) - - Share-based compensation 111,667 112 1,977,499 - 1,977,611 Net loss - - - (2,771,067) (2,771,067) Balance, January 2, 2016 36,003,589 36,004 47,534,059 (42,295,389) 5,274,674 1 for 3 reverse stock split, isssuance due to fractional shares round up 1,632 2 (2) - - Issuance of common stock, net of offering costs of $33,000 1,245,227 1,245 5,716,230 - 5,717,475 Exercise of stock options 280,086 280 716,332 - 716,612 Vested restricted stock 13,997 14 (14) - - Share-based compensation - - 1,193,782 - 1,193,782 Net loss - - - (2,928,185) (2,928,185) Balance, December 31, 2016 37,544,531 $37,545 $55,160,387 $(45,223,574) $9,974,358 See Notes to Consolidated Financial Statements. -56-Table of Contents ChromaDex Corporation and Subsidiaries Consolidated Statements of Cash Flows Years Ended December 31, 2016, January 2, 2016 and January 3, 2015 2016 2015 2014 Cash Flows From Operating Activities Net loss $(2,928,185) $(2,771,067) $(5,388,185) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation of leasehold improvements and equipment 331,734 285,536 222,721 Amortization of intangibles 87,826 45,014 35,589 Share-based compensation expense 1,193,782 1,977,611 2,916,924 Allowance for doubtful trade receivables 713,122 329,844 28,779 Loss from disposal of equipment 7,114 19,643 20,400 Loss from impairment of intangibles - 19,495 - Loss from investment in affiliate - - 45,829 Loss on debt extinguishment 313,099 - - Non-cash financing costs 110,161 188,442 49,527 Changes in operating assets and liabilities: Trade receivables (4,114,561) (873,726) (1,096,695) Other receivable - - 215,000 Inventories 240,851 (4,439,458) (1,530,216) Prepaid expenses and other assets (133,855) (82,124) (91,053) Accounts payable (245,670) 2,772,350 2,157,192 Accrued expenses 867,307 449,180 196,978 Customer deposits and other 117,008 37,567 (311,609) Deferred rent 503,671 (69,445) (51,587)Net cash used in operating activities (2,936,596) (2,111,138) (2,580,406) Cash Flows From Investing Activities Purchases of leasehold improvements and equipment (1,504,922) (525,231) (123,096) Purchases of intangible assets (220,000) (122,500) (130,000) Proceeds from sales of equipment - - 1,356 Proceeds from investment in affiliate - - 1,842,015 Net cash provided by (used in) investing activities (1,724,922) (647,731) 1,590,275 Cash Flows From Financing Activities Proceeds from issuance of common stock, net of issuance costs 5,717,474 1,974,893 - Proceeds from exercise of stock options 716,612 94,846 467,149 Proceeds from loan payable - 2,500,000 2,500,000 Payment of debt issuance costs (176,836) (15,000) (102,866) Principal payment on loan payable (5,000,000) - - Cash paid for debt extinguishment costs (281,092) - - Principal payments on capital leases (221,883) (210,948) (170,738)Net cash provided by financing activities 754,275 4,343,791 2,693,545 Net increase in cash (3,907,243) 1,584,922 1,703,414 Cash Beginning of Year 5,549,672 3,964,750 2,261,336 Cash Ending of Year $1,642,429 $5,549,672 $3,964,750 Supplemental Disclosures of Cash Flow Information Cash payments for interest $261,738 $427,591 $74,996 Supplemental Schedule of Noncash Investing Activity Capital lease obligation incurred for the purchase of equipment $156,655 $303,933 $322,802 Inventory supplied to Healthspan Research, LLC for equity interest, at cost $20,318 $- $- Retirement of fully depreciated equipment - cost $90,803 $121,213 $56,110 Retirement of fully depreciated equipment - accumulated depreciation $(90,803) $(121,213) $(56,110) Supplemental Schedule of Noncash Operating Activity Stock issued to settle outstanding payable balance $- $- $146,494 Supplemental Schedule of Noncash Share-based Compensation Changes in prepaid expenses associated with share-based compensation $- $- $55,631 Warrant issued, related to loan payable $- $- $246,189 See Notes to Consolidated Financial Statements. -57-Table of Contents Note 1. Nature of Business and Liquidity Nature of business: ChromaDex Corporation and its wholly owned subsidiaries, ChromaDex, Inc. and ChromaDex Analytics, Inc. (collectively, the“Company” or, in the first person as “we” “us” and “our”) are a natural products company that leverages its complementary business units to discover,acquire, develop and commercialize patented and proprietary ingredient technologies that address the dietary supplement, food, beverage, skin care andpharmaceutical markets. In addition to the Company’s proprietary ingredient technologies segment, the Company also has core standards and contractservices segment, which focuses on natural product fine chemicals (known as “phytochemicals”) and chemistry and analytical testing services, and regulatoryconsulting segment. As a result of the Company’s relationships with leading universities and research institutions, the Company is able to discover andlicense early stage, intellectual property-backed ingredient technologies. The Company then utilizes the Company’s business segments to developcommercially viable proprietary ingredients. The Company’s proprietary ingredient portfolio is backed with clinical and scientific research, as well asextensive intellectual property protection. Liquidity: The Company has incurred a loss from operations of approximately $2.2 million and a net loss of approximately $2.9 million for the year endedDecember 31, 2016, and net losses of approximately $2.8 million and $5.4 million for the years ended January 2, 2016 and January 3, 2015, respectively. Asof December 31, 2016, the cash and cash equivalents totaled approximately $1.6 million. On November 4, 2016, the Company entered into a business financing agreement with Western Alliance Bank, in order to establish a formula based revolvingcredit line up to $5.0 million. As of December 31, 2016, the Company failed to meet one of the covenants of the business financing agreement, which was toat least meet 50% of projections of Earnings Before Depreciation, Amortization and Share-based Compensation (“EBDAS”) and was in default under theagreement (the “Existing Default.”). On March 12, 2017, the Company entered into a modification agreement with Western Alliance under which WesternAlliance waived the Existing Default. As of March 15, 2017, we have not borrowed from this revolving credit line. The Company anticipates that its current cash, cash equivalents, cash to be generated from operations and the established $5.0 million revolving credit linewill be sufficient to meet its projected operating plans through at least March 17, 2018. The Company may, however, seek additional capital prior to March17, 2018, both to meet its projected operating plans after March 17, 2018 and/or to fund its longer term strategic objectives. Note 2. Significant Accounting Policies Significant accounting policies are as follows: Basis of presentation: The financial statements and accompanying notes have been prepared on a consolidated basis and reflect the consolidated financialposition of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated from thesefinancial statements. The Company’s fiscal year ends on the Saturday closest to December 31. The fiscal year ended December 31, 2016 (referred to as 2016)consisted of 52 weeks, the fiscal year ended January 2, 2016 (referred to as 2015) consisted of 52 weeks and the fiscal year ended January 3, 2015 (referred toas 2014) consisted of 53 weeks. Every fifth or sixth fiscal year, the inclusion of an extra week occurs due to the Company’s floating year-end date. The fiscalyear 2017 will include 52 weeks. Changes in accounting principle: In September 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. The ASU is issued to clarify whether certain items,including debt prepayments and extinguishment costs, should be categorized as operating, investing or financing in the statement of cash flows, Theamendments in this ASU clarify that debt extinguishment costs should be classified as financing cash outflows. The Company early adopted the amendmentsin this ASU effective as of October 1, 2016. For the year ended December 31, 2016, the Company incurred loss of approximately $313,000 on debtextinguishment and approximately $281,000 were paid in cash. -58-Table of Contents Use of accounting estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the amountsreported in the financial statements and accompanying notes. Actual results could differ from those estimates. Revenue recognition: The Company recognizes sales and the related cost of sales at the time the merchandise is shipped to customers or service is performed,when each of the following conditions have been met: an arrangement exists, delivery has occurred, there is a fixed price, and collectability is reasonablyassured. Discounts, returns and allowances related to sales, including an estimated reserve for the returns and allowances, are recorded as reduction ofrevenue. Shipping and handling fees billed to customers and the cost of shipping and handling fees billed to customers are included in net sales. For the years endingin December 31, 2016, January 2, 2016 and January 3, 2015, shipping and handling fees billed to customers were approximately $110,000, $113,000 and$115,000, respectively, and the cost of shipping and handling fees billed to customers were approximately, $108,000, $112,000 and $130,000, respectively.Shipping and handling fees not billed to customers are recognized as cost of sales. Taxes collected from customers and remitted to governmental authorities are excluded from revenue, which is presented on a net basis in the statement ofoperations. Cash concentration: The Company maintains its cash in two banks. Trade accounts receivable, net: Trade accounts receivable are carried at original invoice amount less an estimate made for doubtful receivables based onmonthly and quarterly reviews of all outstanding amounts. Management determines the allowance for doubtful accounts by identifying troubled accountsand by using historical experience applied to an aging of accounts. The allowance amounts for the periods ended December 31, 2016 and January 2, 2016 areas follows: 2016 2015 Allowances Related to Customer C $800,000 $- Customer E 198,000 - Customer A - 329,000 Other Allowances 83,000 38,000 $1,081,000 $367,000 Trade accounts receivable are written off when deemed uncollectible. Recoveries of trade accounts receivable previously written off are recorded whenreceived. Credit risk: Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash and cash equivalents and tradereceivables. For cash and cash equivalents, the Company has them either in a form of bank deposits or highly liquid debt instruments in investment-gradepursuant to the Company's investment policy. Accounts at each institution are insured by the Federal Deposit Insurance Corporation ("FDIC") up to$250,000. As of December 31, 2016, we held a total deposit of approximately $1.5 million with one institution which exceeded the FDIC limit. We, however,believe we have very little credit risk exposure for our cash and cash equivalents. Our trade receivables are derived from sales to our customers. We assesscredit risk of our customers through quantitative and qualitative analysis. From this analysis, we establish credit limits and manage the risk exposure. We,however, incur credit losses due to bankruptcy or other failure of the customer to pay. Inventories: Inventories are comprised of primarily finished goods. They are stated at the lower of cost, determined by the first-in, first-out method, or market.The inventory on the balance sheet is recorded net of valuation allowances. Labor and overhead has been added to inventory that was manufactured orcharacterized by the Company. The amounts of major classes of inventory for the periods ended December 31, 2016 and January 2, 2016 are as follows: 2016 2015 Bulk ingredients $7,044,000 $7,196,000 Reference standards 1,033,000 1,239,000 8,077,000 8,435,000 Less valuation allowance 164,000 261,000 $7,913,000 $8,174,000 -59-Table of Contents Our normal operating cycle for reference standards is currently longer than one year. The Company regularly reviews inventories on hand and reduces thecarrying value for slow-moving and obsolete inventory, inventory not meeting quality standards and inventory subject to expiration. The reduction of thecarrying value for slow-moving and obsolete inventory is based on current estimates of future product demand, market conditions and related managementjudgment. Any significant unanticipated changes in future product demand or market conditions that vary from current expectations could have an impact onthe value of inventories. Intangible assets: Intangible assets include licensing rights and are accounted for based on the fair value of consideration given or the fair value of the netassets acquired, whichever is more reliable. Intangible assets with finite useful lives are amortized using the straight-line method over a period of 10 years, or,for licensed patent rights, the remaining term of the patents underlying licensing rights (considered to be the remaining useful life of the license), whicheveris shorter. The useful lives of subsequent milestone payments that are capitalized are the remaining useful life of the initial licensing payment that wascapitalized. Leasehold improvements and equipment, net: Leasehold improvements and equipment are carried at cost and depreciated on the straight-line method overthe lesser of the estimated useful life of each asset or lease term. Leasehold improvements and equipment are comprised of leasehold improvements,laboratory equipment, furniture and fixtures, and computer equipment. Depreciation on equipment under capital lease is included with depreciation onowned assets. Maintenance and repairs are charged to operating expenses as they are incurred. Improvements and betterments, which extend the lives of theassets, are capitalized. Long-lived assets are reviewed for impairment on a periodic basis and when changes in circumstances indicate the possibility that the carrying amount maynot be recoverable. Long-lived assets are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of otherassets. If the forecast of undiscounted future cash flows is less than the carrying amount of the assets, an impairment charge would be recognized to reduce thecarrying value of the assets to fair value. If a possible impairment is identified, the asset group’s fair value is measured relying primarily on a discounted cashflow methodology. Customer deposits and other: Customer deposits and other represent either (i) cash received from customers in advance of product shipment or delivery ofservices; or (ii) cash received from government as research grants, which the Company has yet to complete the research activities. The cash received from government as research grants is recognized as a liability until the research is performed. Other than a nominal management fee,which the Company is entitled to earn when the research is performed, the research activities related to the grants are excluded from revenue and arepresented on a net basis in the statement of operations. Income taxes: Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences andoperating loss and tax credit carryforwards and deferred liabilities are recognized for taxable temporary differences. Temporary differences are the differencesbetween the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion ofmanagement, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted forthe effects of changes in tax laws and rates on the date of enactment. The Company has not recorded a reserve for any tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty aboutthe timing of such deductibility. The Company files tax returns in all appropriate jurisdictions, which include a federal tax return and various state taxreturns. Open tax years for these jurisdictions are 2013 to 2016, which statutes expire in 2017 to 2020, respectively. When and if applicable, potential interestand penalty costs are accrued as incurred, with expenses recognized in general and administrative expenses in the statements of operations. As of December31, 2016, the Company has no liability for unrecognized tax benefits. -60-Table of Contents Research and development costs: Research and development costs consist of direct and indirect costs associated with the development of the Company’stechnologies. These costs are expensed as incurred. Advertising: The Company expenses the production costs of advertising the first time the advertising takes place. Advertising expense for the periods endedDecember 31, 2016, January 2, 2016 and January 3, 2015 were approximately $58,000, $104,000 and $171,000, respectively. Share-based compensation: The Company has an Equity Incentive Plan under which the Board of Directors may grant restricted stock or stock options toemployees and non-employees. For employees, share-based compensation cost is recorded for all option grants and awards of non-vested stock based on thegrant date fair value of the award, and is recognized over the period the employee is required to provide services for the award. For non-employees, share-based compensation cost is recorded for all option grants and awards of non-vested stock and is remeasured over the vesting term as earned. The expense isrecognized over the period the non-employee is required to provide services for the award. The fair value of the Company’s stock options is estimated at the date of grant using the Black-Scholes based option valuation model. The volatilityassumption is based on the historical volatility of the Company's common stock. The dividend yield assumption is based on the Company’s history andexpectation of future dividend payouts on the common stock. The risk-free interest rate is based on the implied yield available on U.S. treasury zero-couponissues with an equivalent remaining term. For the expected term, the Company uses SEC Staff Accounting Bulletin No. 107 simplified method since most ofthe options granted were “plain vanilla” options with following characteristics: (i) the share options are granted at the market price on the grant date; (ii)exercisability is conditional on performing service through the vesting date on most options; (iii) If an employee terminates service prior to vesting, theemployee would forfeit the share options; (iv) if an employee terminates service after vesting, the employee would have 30 days to exercise the share options;and (v) the share options are nontransferable and nonhedgeable. The Company recognizes compensation expense over the requisite service period using the straight-line method for option grants without performanceconditions. For stock options that have both service and performance conditions, the Company recognizes compensation expense using the gradedattribution method. Compensation expense for stock options with performance conditions is recognized only for those awards expected to vest. From time to time, the Company awards shares of its common stock to non-employees for services provided or to be provided. The fair value of the awards aremeasured either based on the fair market value of stock at the date of grant or the value of the services provided, based on which is more reliably measureable.Since these stock awards are fully vested and non-forfeitable, upon issuance the measurement date for the award is usually reached on the date of the award. Fair Value Measurement: The Company follows the provisions of the accounting standard which defines fair value, establishes a framework for measuringfair value and enhances fair value measurement disclosure. Under these provisions, fair value is defined as the price that would be received to sell an asset orpaid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use onunobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use inpricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflectthe Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best informationavailable in the circumstances. The hierarchy is described below: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchygives the highest priority to Level 1 inputs.Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3inputs. -61-Table of Contents Financial instruments: The estimated fair value of financial instruments has been determined based on the Company’s assessment of available marketinformation and appropriate valuation methodologies. The fair value of the Company’s financial instruments that are included in current assets and currentliabilities approximates their carrying value due to their short-term nature. The carrying amounts reported in the balance sheet for capital lease obligations are present values of the obligations, excluding the interest portion. The carrying amounts reported in the balance sheet for loan payable are present values net of discount, excluding the interest portion. The carrying valueapproximates fair value because the Company’s interest rate yield based on the credit rating of the Company is believed to be near current market rates. TheCompany’s loan payable is considered a Level 3 liability within the fair value hierarchy. Recent accounting standards: In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under U.S. Generally Accepted Accounting Principles ("GAAP"). The coreprinciple of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the considerationthat is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it ispossible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP including identifyingperformance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transactionprice to each separate performance obligation. ASU 2014-09 is effective for us in our first quarter of fiscal 2018 using either of two methods: (i) retrospectiveto each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective with thecumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined perASU 2014-09. We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330) - Simplifying the Measurement of Inventory, which requires that inventories, other thanthose accounted for under Last-In-First-Out, will be reported at the lower of cost or net realizable value. Net realizable value is the estimated selling price lesscosts of completion, disposal and transportation. ASU 2015-11 is effective for annual periods beginning after December 15, 2016, and interim periods withinthose annual periods. We are currently evaluating the impact of our pending adoption of ASU 2015-11. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise fromoperating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-useasset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make anaccounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required torecognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Public business entities should applythe amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application ispermitted for all public business entities and all nonpublic business entities upon issuance. We are currently evaluating the impact of our pending adoptionof ASU 2016-02 on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based PaymentAccounting to simplify the accounting for stock compensation. It focuses on income tax accounting, award classification, estimating forfeitures, and cashflow presentation. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. We arecurrently evaluating the impact of our pending adoption of ASU 2016-09. Note 3. Reverse Stock Split On April 13, 2016, the Company effected a 1-for-3 reverse stock split. All information presented herein has been retrospectively adjusted to reflect the reversestock split as if it took place as of the earliest period presented. An additional 1,632 shares were issued to round up fractional shares as a result of the reversestock split. -62-Table of Contents Note 4. Loss Per Share Applicable to Common Stockholders The following table sets forth the computations of loss per share amounts applicable to common stockholders for the years ended December 31, 2016,January 2, 2016 and January 3, 2015. Years Ended 2016 2015 2014 Net loss $(2,928,185) $(2,771,067) $(5,388,185) Basic and diluted loss per common share $(0.08) $(0.08) $(0.15) Weighted average common shares outstanding (1): 37,294,321 35,877,341 35,486,460 Potentially dilutive securities (2): Stock options 5,210,334 5,244,918 4,658,017 Warrants 470,444 423,007 156,340 Convertible debt - 257,798 257,798 (1)Includes approximately 0.4 million, 0.4 million and 0.5 million nonvested restricted stock for the years 2016, 2015 and 2014, respectively, which areparticipating securities that featurevoting and dividend rights. (2)Excluded from the computation of loss per share as their impact is antidilutive. Note 5. Intangible Assets Intangible assets consisted of the following: 2016 2015 RemainingWeightedAverageAmortizationPeriod as ofDecember 31, 2016 License agreements and other $1,469,000 $1,249,000 5.4 years Less accumulated depreciation 983,000 895,000 $486,000 $354,000 Amortization expenses on amortizable intangible assets included in the consolidated statement of operations for the years ended December 31, 2016, January2, 2016 and January 3, 2015 were approximately $88,000, $45,000 and $36,000, respectively. -63-Table of Contents In December 2015, the Company decided to discontinue its efforts to commercialize and market products associated with the patent the Company licensedfrom the Research Foundation of State University of New York in June 2008. The Company paid a license fee of approximately $78,000 and the licensedrights to the patent were recognized as intangible assets with an estimated fair value of approximately $78,000 and a useful life of 10 years. At January 2,2016, the Company determined that these assets no longer had any carrying value as the Company discontinued its operations related to these assets. Theloss from impairment of these assets recorded for the year ended January 2, 2016 was approximately $19,000. Estimated aggregate amortization expense for each of the next five years is as follows: Years ending December: 2017 $94,000 2018 94,000 2019 94,000 2020 89,000 2021 70,000 Thereafter 45,000 $486,000 Note 6. Leasehold Improvements and Equipment, Net Leasehold improvements and equipment consisted of the following: 2016 2015 Useful Life Laboratory equipment $3,851,000 $3,739,000 10 yearsLeasehold improvements 1,721,000 513,000 Lesser of lease term or estimated usefullifeComputer equipment 441,000 404,000 3 to 5 yearsFurniture and fixtures 42,000 17,000 7 yearsOffice equipment 28,000 22,000 10 yearsConstruction in progress 170,000 4,000 6,253,000 4,699,000 Less accumulated depreciation 3,142,000 2,910,000 $3,111,000 $1,789,000 Depreciation expenses on leasehold improvements and equipment included in the consolidated statement of operations for the years ended December 31,2016, January 2, 2016 and January 3, 2015 were approximately $332,000, $286,000 and $223,000, respectively. The Company leases equipment under capitalized lease obligations with a total cost of approximately $1,214,000 and $1,137,000 and accumulatedamortization of $277,000 and $231,000 as of December 31, 2016 and January 2, 2016, respectively. -64-Table of Contents Note 7. Capitalized Lease Obligations Minimum future lease payments under capital leases as of December 31, 2016, are as follows: Year ending December: 2017 $297,000 2018 249,000 2019 89,000 2020 35,000 Total minimum lease payments 670,000 Less amount representing interest at a rate of approximately 8.9% per year 71,000 Present value of net minimum lease payments 599,000 Less current portion 255,000 Long-term obligations under capital leases $344,000 Interest expenses related to capital leases were approximately $48,000, $62,000 and $47,000 for the years ended December 31, 2016, January 2, 2016 andJanuary 3, 2015, respectively. Note 8. Loan Payable 8A. Line of Credit – Western Alliance Bank On November 4, 2016, the Company entered into a business financing agreement (“Financing Agreement”) with Western Alliance Bank (“WesternAlliance”), in order to establish a formula based revolving credit line pursuant to which the Company may borrow an aggregate principal amount of up to$5,000,000, subject to the terms and conditions of the Financing Agreement. Upon execution of the Financing Agreement, the Company paid a $25,000facility fee and a $900 due diligence fee to Western Alliance. The Company also paid a consulting fee of $100,000 to Trump Securities LLC and Credo 180,LLC pursuant to an exclusive placement and advisory agreement by and among the Company. In addition, there was approximately $52,000 of due diligenceand legal fees the Company incurred associated with the Financing Agreement. As of December 31, 2016, the Company did not have any outstanding loanpayable from this line of credit arrangement. The interest rate will be calculated at a floating rate per month equal to (a) the greater of (i) 3.50% per year or (ii) the Prime Rate published in the MoneyRates section of the Western Edition of The Wall Street Journal, or such other rate of interest publicly announced by Lender as its Prime Rate, plus (b) 2.50percentage points, plus an additional 5.00 percentage points during any period that an event of default has occurred and is continuing. The Company’sobligations under the Financing Agreement are secured by a security interest in substantially all of the Company’s current and future personal propertyassets, including intellectual property. Any borrowings, interest or other fees or obligations that the Company owes Western Alliance pursuant to the Financing Agreement will be become due andpayable on November 4, 2018. If the Financing Agreement is terminated prior to November 4, 2017, the Company will pay a termination fee of $50,000 toWestern Alliance, provided that such termination fee will be waived in the event that the Company refinances with Western Alliance. The Financing Agreement includes quick ratio, EBDAS and minimum revenue financial covenants. As of December 31, 2016, the Company failed to meetone of the covenants, which was to at least meet 50% of projections of EBDAS and was in default under the Financing Agreement (the “Existing Default.”).On March 12, 2017, the Company entered into Second Business Financing Modification Agreement with Western Alliance under which Western Alliancewaived the Existing Default. -65-Table of Contents Debt Issuance Costs The Company incurred debt issuance costs of approximately $177,000 in connection with this line of credit arrangement and had an unamortized balance ofapproximately $161,000 as of December 31, 2016. For the line of credit arrangement, the Company has elected a policy to keep the debt issuance costs as anasset, regardless of whether an amount is drawn. The remaining unamortized deferred asset will be amortized over the remaining life of the line of creditarrangement. 8B. Term Loan – Hercules Technology II, L.P. On June 14, 2016, the Company repaid $4,851,542 owed to Hercules Funding II LLC (“Hercules”), under the Company’s loan and security agreement withHercules dated as of September 29, 2014 (the “Loan Agreement”). The payoff amount was comprised of the following: Payoff Amount Principal $4,554,659 Accrued interest 15,790 End of term charge 187,500 Prepayment fee 91,093 Other fees 2,500 Total $4,851,542 Upon receipt of the payoff Amount, the Loan Agreement terminated. The Loan Agreement initially provided the Company with access to a term loan of up to $5 million. The first $2.5 million of the term loan was funded at theclosing of the Loan Agreement, and was repayable in installments over 30 months, following an initial interest-only period of twelve months after closing.The Company drew down the remaining $2.5 million of the term loan on June 17, 2015 and the interest-only period was extended to March 31, 2016. Inconnection with the loan, the Company paid an aggregate of $65,000 in facility charges to Hercules and granted Hercules first priority liens and a securityinterest in substantially all of its assets. The Loan Agreement also provided (i) a borrower option to repay principal in common stock up to an aggregate amount of $500,000 at a conversion price of$3.879 per share and (ii) a lender option to receive principal repayments in common stock up to an aggregate amount of $500,000 at a conversion price of$3.879 per share, subject to certain conditions. However, no principal was repaid in common stock. On the commitment date, no separate accounting wasrequired for the conversion feature. In connection with the termination of the Loan Agreement, Hercules’s commitments to extend further credit to the Company terminated, all obligations,covenants, debts and liabilities of the Company under the Loan Agreement were satisfied and discharged in full, all documents entered into in connectionwith the Loan Agreement, other than a warrant issued pursuant to the Loan Agreement, were terminated, all liens or security interests granted to secure theobligations under the Loan Agreement terminated and all guaranties of the Company’s obligations under the Loan Agreement terminated. The payoff amount, excluding the accrued interest to date, was $4,835,752 and the net carrying amount of the debt on the extinguishment date was$4,522,653. The difference of $313,099 was recognized as a non-operating loss in the statement of operations during the year ended December 31, 2016. -66-Table of Contents Net Carrying Amount Payoff Amount (Excluding Interest) Principal $4,554,659 Principal $4,554,659 Accrued end of term charge 103,909 End of term charge 187,500 Deferred financing cost (45,606) Prepayment fee 91,093 Warrant discount (90,309) Other fees 2,500 Total $4,522,653 Total $4,835,752 (A) (B) Loss on debt extinguishment $(313,099) (A) - (B) The term loan bore interest at the rate per year equal to 9.35% from September 29, 2014 to December 16, 2015 and 9.60% from December 17, 2015 to June14, 2016. The total interest expenses related the term loan, including cash interest payments, the amortizations of debt issuance costs and debt discount, andthe accrual of end of term charge were approximately $324,000, $554,000 and $112,000 for the years ended December 31, 2016, January 2, 2016 and January3, 2015, respectively. Warrant Issued to Lender Pursuant to the Loan Agreement, the Company issued Lender a warrant (the “Warrant”) to purchase 139,674 shares of our common stock at an exercise priceof $3.186 per share, subject to customary anti-dilution provisions. The Warrant is exercisable and expires five years from the date of issuance. The Company determined the Warrant issued to Lender during the year ended January 3, 2015 to be equity classified. The Company estimated the fair valueof this Warrant as of the issuance date using a Black-Scholes option pricing model with the following assumptions: September 29,2014 Fair value of common stock $3.24 Volatility 72.40%Expected dividends 0.00%Contractual term 5.0 years Risk-free rate 1.76% The Company utilized this fair value in its allocation of the loan proceeds between loan payable and the Warrant which was performed on a relative fair valuebasis. The fair value of the Warrant to purchase 139,674 shares of our common stock was approximately $273,000. Ultimately, the Company allocated$246,000 to the Warrant and recognized this amount in additional paid in capital. Accordingly, this amount was recognized as a debt discount and was beingamortized as interest expense using the effective interest method over the term of the loan. Amortizations of this debt discount were $39,000, $90,000 and$28,000 for the years ended December 31, 2016, January 2, 2016 and January 3, 2015, respectively. Debt Issuance Costs and End of Term Charge The Company incurred debt issuance costs of approximately $118,000 in connection with this term loan. The debt issuance costs were being amortized asinterest expense using the effective interest method over the term of the loan. In addition, the Company was obligated to pay an end of term charge of$188,000, which is 3.75% of the $5.0 million drawn under the loan. The end of term charge was being accrued as additional interest expense using theeffective interest rate method over the term of the loan. When the Company paid off the debt on June 14, 2016, there were approximately $46,000 debtissuance costs that had not been amortized and $84,000 end of term charge remaining to be accrued. These unamortized debt issuance costs and the end ofterm charge remaining to be accrued were part of the loss on debt extinguishment recognized in 2016. Interest expense recorded in relation to amortization ofdebt issuance costs and the accrual of the end of term charge prior to the payoff was $55,000, $99,000 and $22,000 for the years ended December 31, 2016,January 2, 2016 and January 3, 2015, respectively. -67-Table of Contents Note 9. Income Taxes The provision for income tax consists of following: 2016 2015 2014 Current Federal $- $- $- State - 4,527 - Deferred (net of valuation allowance) Federal - - - State - - - Income tax provision $- $4,527 $- At December 31, 2016 and January 2, 2016, the Company maintained a full valuation allowance against the entire deferred income tax balance whichresulted in an effective tax rates of 0%, 0.2% and 0% for years 2016, 2015 and 2014, respectively. At December 31, 2016 and January 2, 2016, we recorded avaluation allowance of $15.5 million and $15.0 million, respectively. The valuation allowance increased by $0.5 million during 2016.The valuationallowance increased by $0.5 million during 2016. A reconciliation of income taxes computed at the statutory Federal income tax rate to income taxes as reflected in the financial statements is summarized asfollows: 2016 2015 2014 Federal income tax expense at statutory rate (34.0)% (34.0)% (34.0)%State income tax, net of federal benefit (5.3)% (5.1)% (5.3)%Permanent differences 8.4% 5.7% 2.7%Change in tax rates (0.3)% 0.7% (6.1)%Expirations of state net operating losses 1.8% 17.4% 0.0%Change in stock options and restricted stock 11.8% 0.0% 0.0%Change in valuation allowance 16.4% 13.7% 42.8%Other 1.2% 1.8% (0.1)%Effective tax rate 0.0% 0.2% 0.0% The deferred income tax assets and liabilities consisted of the following components as of December 31, 2016 and January 2, 2016: 2016 2015 Deferred tax assets: Net operating loss carryforward $11,023,000 $10,860,000 Capital loss carryforward 811,000 808,000 Stock options and restricted stock 2,694,000 3,048,000 Inventory reserve 195,000 249,000 Allowance for doubtful accounts 425,000 144,000 Accrued expenses 487,000 277,000 Deferred revenue 13,000 - Intangibles 29,000 23,000 Deferred rent 252,000 54,000 15,929,000 15,463,000 Less valuation allowance (15,530,000) (15,050,000) 399,000 413,000 Deferred tax liabilities: Leasehold improvements and equipment (282,000) (284,000)Prepaid expenses (117,000) (129,000) (399,000) (413,000) $- $- -68-Table of Contents The Company has tax net operating loss carryforwards for federal and state income tax purposes of approximately $29,701,000 and $23,382,000,respectively which begin to expire in the year ending December 31, 2023 and 2017, respectively. In addition, the Company has tax capital loss carry forwardavailable to offset future federal taxable capital income of approximately $2,065,000 which will expire in the year ending December 31, 2019. Under the Internal Revenue Code, certain ownership changes may subject the Company to annual limitations on the utilization of its net operating losscarryforward. The Company will continue to analyze the potential impact of any additional transactions undertaken upon the utilization of the net operatinglosses on a go forward basis. The Company has not identified any uncertain tax positions requiring a reserve as of December 31, 2016 and January 2, 2016. Note 10. Share-Based Compensation 10A. Employee Share-Based Compensation Stock Option Plans At the discretion of the Company’s compensation committee (the “Compensation Committee”), and with the approval of the Company’s board of directors(the “Board of Directors”), the Company may grant options to purchase the Company’s common stock to certain individuals from time to time. Managementand the Compensation Committee determine the terms of awards which include the exercise price, vesting conditions and expiration dates at the time ofgrant. Expiration dates for stock options are not to exceed 10 years from their date of issuance. The Company, under its Second Amended and Restated 2007Equity Incentive Plan, is authorized to issue stock options that total no more than 20% of the shares of common stock issued and outstanding, as determinedon a fully diluted basis. At the discretion of Management, working with the Compensation Committee, and with approval of the Board of Directors, the Company may grant optionsto purchase the Company’s common stock to certain individuals from time to time who are not employees of the Company. These options were granted underthe Second Amended and Restated 2007 Equity Incentive Plan of the Company and were granted on the same terms as those being issued to employees. The remaining amount available for issuance under the Second Amended and Restated 2007 Equity Incentive Plan totaled 993,305 at December 31, 2016. General Vesting Conditions The stock option awards generally vest ratably over a four-year period following grant date after a passage of time. However, some stock option awards areperformance based and vest based on the achievement of certain criteria established by the Compensation Committee, subject to approval by the Board ofDirectors. The fair value of the Company’s stock options was estimated at the date of grant using the Black-Scholes based option valuation model. The table belowoutlines the weighted average assumptions for options granted to employees during the years ended December 31, 2016, January 2, 2016 and January 3,2015. Year Ended December 2016 2015 2014 Expected term 6 years 6 years 6 years Expected Volatility 73.2% 75.8% 74.6%Expected dividends 0.0% 0.0% 0.0%Risk-free rate 1.4% 1.7% 1.9% -69-Table of Contents 1) Service Period Based Stock Options The majority of options granted by the Company are comprised of service based options granted to employees. These options vest ratably over a definedperiod following grant date after a passage of a service period. The following table summarizes service period based stock options activity: Weighted Average Remaining Aggregate Number of Exercise Contractual Fair Intrinsic Shares Price Term Value Value Outstanding at December 28, 2013 4,038,070 $3.18 7.43 Options Granted 744,662 4.17 10.00 $2.70 Options Classification from Employee to Non-Employee (37,717) 2.28 8.68 Options Exercised (178,238) 2.61 $156,000 Options Expired (84,633) 3.00 Options Forfeited (240,758) 3.39 Outstanding at January 3, 2015 4,241,386 $3.39 7.00 Options Granted 730,562 3.66 10.00 $2.28 Options Classification from Employee to Non-Employee (514,024) 2.79 7.78 Options Exercised (40,236) 2.37 $58,000 Options Forfeited (103,425) 3.93 Outstanding at January 2, 2016 4,314,263 $3.50 6.44 Options Granted 742,485 3.91 10.00 $2.49 Options Exercised (238,423) 2.67 $502,000 Options Expired (183,334) 4.50 Options Forfeited (353,840) 4.15 Outstanding at December 31, 2016 4,281,151 $3.52 6.36 $1,352,000 Exercisable at December 31, 2016 3,192,519 $3.40 5.42 $1,234,000 The aggregate intrinsic values in the table above are based on the Company’s closing stock price of $3.31 on the last day of business for the year endedDecember 31, 2016. -70-Table of Contents 2) 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 timeby the Compensation Committee. If these performance criteria are not met, the compensation expenses are not recognized and the expenses that have beenrecognized will be reversed. The following table summarizes performance based stock options activity: Weighted Average Remaining Aggregate Number of Exercise Contractual Fair Intrinsic Shares Price Term Value Value Outstanding at December 28, 2013 66,668 $1.89 9.08 Options Granted - - Options Exercised - - Options Forfeited - - Outstanding at January 3, 2015 66,668 $1.89 8.08 Options Granted - - Options Exercised - - Options Forfeited - - Outstanding at January 2, 2016 66,668 $1.89 7.08 Options Granted - - Options Exercised - - Options Forfeited - - Outstanding at December 31, 2016 66,668 $1.89 6.08 $95,000 Exercisable at December 31, 2016 65,280 $1.89 6.08 $93,000 The aggregate intrinsic value in the table above are, based on the Company’s closing stock price of $3.31 on the last day of business for the period endedDecember 31, 2016. As of December 31, 2016, there was approximately $2,280,000 of total unrecognized compensation expense related to non-vested share-based compensationarrangements granted under the plans for employee stock options. That cost is expected to be recognized over a weighted average period of 2.75 years. -71-Table of Contents Restricted Stock Awards Restricted stock awards granted by the Company to employees have vesting conditions that are unique to each award. The following table summarizes activity of restricted stock awards granted to employees: WeightedAverage Award-Date Shares Fair Value Unvested shares at December 28, 2013 166,668 $2.07 Granted 363,339 4.23 Vested - - Forfeited - - Unvested shares at January 3, 2015 530,007 $3.54 Granted - - Vested (173,336) 4.23 Forfeited - - Unvested shares at January 2, 2016 356,671 $3.21 Granted - - Vested (6,668) 4.23 Forfeited - - Unvested shares at December 31, 2016 350,003 $3.20 Expected to Vest as of December 31, 2016 350,003 $3.20 During the years ended December 31, 2016 and January 2, 2016, several members of the Company’s Board of Directors (the “Board”) resigned from the Boardand received immediate vesting of their unvested restricted stock of 6,668 shares and 173,336 shares, respectively. The expense for the vested restricted stockwas approximately $761,000 and was all recognized during the fiscal year ended January 3, 2015. On January 2, 2014, the Company awarded an aggregate of 363,339 shares of restricted stock to the Company’s officers and members of the Board. The awardincludes the vested shares described above for members who resigned from the Board. These shares were to vest upon the earlier to occur of the following: (i)the market price of the Company’s stock exceeds a certain price, or (ii) one of other certain triggering events, including the termination of the officers andmembers of the board of directors without cause for any reason. The fair values of these restricted stock awards were approximately $1,537,000 in aggregate,and they were based on the trading price of the Company’s common stock on the date of grant. The expense related to the restricted stock award has beenamortized over the period of six months through July 1, 2014, as the Company determined the requisite service period to be 6 months as that is when they areeligible to vest. During the year ended December 31, 2016, the Company and each of the executives and members of the Board amended the restricted stock awards toprovide that the awards shall not vest upon the market price of the Company’s stock exceeding a certain price or listing of the Company’s stock on a nationalsecurities exchange. No separate accounting was done related to this amendment. Employee Option and Restricted Stock Compensation The Company recognized share-based compensation expense of approximately $1,133,000, $1,543,000 and $2,747,000 in general and administrativeexpenses in the statement of operations for the years ended December 31, 2016, January 2, 2016 and January 3, 2015, respectively. -72-Table of Contents 10B. Non-Employee Share-Based Compensation Stock Option Plan The following table summarizes activity of stock options granted to non-employees: Weighted Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value Outstanding at December 28, 2013 282,440 $4.32 5.74 Options Granted 30,001 3.72 10.00 Options Classification from Employee to Non-Employee 37,717 2.28 8.68 Options Exercised - - Options Forfeited - - Outstanding at January 3, 2015 350,158 $4.05 5.46 Options Granted - - Options Classification from Employee to Non-Employee 514,024 2.79 7.78 Options Exercised - - Options Forfeited - - Outstanding at January 2, 2016 864,182 $3.31 6.04 Options Granted 40,000 2.85 10.00 Options Exercised (41,667) 1.92 $98,000 Options Forfeited - - Outstanding at December 31, 2016 862,515 $3.35 5.23 $353,000 Exercisable at December 31, 2016 825,848 $3.37 5.03 $336,000 The aggregate intrinsic values in the table above are, based on the Company’s closing stock price of $3.31 on the last day of business for the year endedDecember 31, 2016. The fair value of the Company’s stock options was estimated at the date of grant using the Black-Scholes based option valuation model. The table belowoutlines the weighted average assumptions for options granted to non-employees during the years ended December 31, 2016 and January 3, 2015. Year Ended December 2016 2015 2014 Expected Term 5 years N/A 5 years Expected Volatility 72.5% N/A 83.1%Expected dividends 0.0% N/A 0.0%Risk-free rate 2.0% N/A 1.6% As of December 31, 2016, there was approximately $62,000 of total unrecognized compensation expense related to non-vested share-based compensationarrangements granted under the plans for non-employee stock options. That cost is expected to be recognized over a weighted average period of 1.79 years. Stock and Restricted Stock Awards Restricted stock awards granted by the Company to non-employees generally feature time vesting service conditions, specified in the respective serviceagreements. Restricted stock awards issued to non-employees are accounted for at current fair value through the vesting period. The following tablesummarizes activity of restricted stock awards issued to non-employees: WeightedAverage Shares Fair Value Unvested shares at December 28, 2013 - $- Granted 32,000 3.90 Vested (6,667) 3.51 Forfeited - - Unvested shares at January 3, 2015 25,333 $2.70 Granted 46,668 2.58 Vested (54,668) 3.63 Forfeited - - Unvested shares at January 2, 2016 17,333 $3.66 Granted - - Vested (7,333) 3.79 Forfeited - - Unvested shares expected to vest at December 31, 2016 10,000 $3.31 -73-Table of Contents As of December 31, 2016, there was approximately $33,000 of total unrecognized compensation expense related to the restricted stock award to a non-employee. That cost is expected to be recognized over a period of 1.2 years as of December 31, 2016. The Company did not award any stock grants to non-employees in 2016. For the years ended January 2, 2016 and January 3, 2015, the Company awarded116,668 and 21,667 shares of the Company’s common stock to non-employees and recognized expenses of $361,000 and $129,000, respectively. Non-Employee Option, Stock, Restricted Stock and Warrant Awards For non-employee share-based compensation, the Company recognized share-based compensation expense of approximately $61,000, $435,000 and$170,000 in general and administrative expenses in the statement of operations for the years ended December 31, 2016, January 2, 2016 and January 3, 2015,respectively. Note 11. Stock Issuance On March 11, 2016, the Company entered into a Securities Purchase Agreement (“SPA”) to raise $500,000 in a registered direct offering. Pursuant to the SPA,the Company sold a total of 128,205 Units at a purchase price of $3.90 per Unit, with each Unit consisting of one share of the Company’s common stock anda warrant to purchase one half of a share of common stock (64,103 total) with an exercise price of $4.80 and a term of 3 years. The estimated fair value of thewarrant was approximately $108,000 and the warrant was determined to be classified as equity. The fair value was estimated at the date of issuance using theBlack-Scholes based valuation model. The table below outlines the assumptions for the warrant issued. March 11,2016 Fair value of common stock $4.41 Contractual term 3.0 years Volatility 60%Risk-free rate 1.16%Expected dividends 0% On June 3, 2016, the Company entered into additional SPAs to raise $5,250,000 in a registered direct offering. Pursuant to the SPAs, the Company sold atotal of 1,117,022 shares of the Company’s common stock at a purchase price of $4.70 per share. In Fiscal Year 2015, the Company entered into SPAs with certain existing stockholders to raise $2,000,000 in a registered direct offering. Pursuant to theSPAs, the Company sold a total of 200,000 Units at a purchase price of $10.00 per Unit, with each Unit consisting of 2.667 shares of the Company’s commonstock and a warrant to purchase 1.333 shares of common stock (266,667 total) with an exercise price of $4.50 and a term of 3 years. The aggregate estimatedfair value of the warrants was approximately $489,000 and these warrants were determined to be classified as equity. The fair value was estimated at the dateof issuance using the Black-Scholes based valuation model. The table below outlines the assumptions for the warrants issued. November 9,2015 Fair value of common stock $4.41 Contractual term 3.0 years Volatility 62%Risk-free rate 1.27%Expected dividends 0% In Fiscal Year 2014, the Company issued 42,202 shares of common stock to vendors to settle outstanding payables balances of approximately $146,000. -74-Table of Contents Note 12. Warrants The following table summarizes activity of warrants at December 31, 2016, January 2, 2016 and January 3, 2015 and changes during the years then ended: Weighted Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value Outstanding at December 28, 2013 - $- - - Warrants Issued 156,341 3.21 4.68 Warrants Exercised - - Warrants Expired - - Outstanding and exercisable at January 3, 2015 156,341 3.21 4.43 Warrants Issued 266,667 4.50 Warrants Exercised - - Warrants Expired - - Outstanding and exercisable at January 2, 2016 423,008 4.02 3.07 Warrants Issued 64,103 4.80 Warrants Exercised - - Warrants Expired (16,667) 3.30 Outstanding and exercisable at December 31, 2016 470,444 $4.15 2.17 $17,000 The aggregate intrinsic values in the table above are based on the Company’s closing stock price of $3.31 on the last day of business for the year endedDecember 31, 2016. The fair values of warrants issued were estimated at the date of issuance using the Black-Scholes based valuation model. The table below outlines theweighted average assumptions for the warrants issued during the years ended December 31, 2016, January 2, 2016 and January 3, 2015. 2016 2015 2014 Fair value of common stock $4.41 $4.41 $3.20 Contractual term 3.0 years 3.0 years 4.7 years Volatility 60% 62% 72%Risk-free rate 1.16% 1.27% 1.62%Expected dividends 0% 0% 0% -75-Table of Contents Note 13. Commitments and Contingencies Lease The Company leases its office and research facilities in California, Colorado and Maryland under operating lease agreements that expire at various dates fromSeptember 2017 through February 2024. Monthly lease payments range from $1,460 per month to $23,472 per month, and minimum lease payments escalateduring the terms of the leases. Generally accepted accounting principles require total minimum lease payments to be recognized as rent expense on a straight-line basis over the term of the lease. The excess of such expense over amounts required to be paid under the lease agreement is carried as a liability on theCompany’s consolidated balance sheet. Minimum future rental payments under all of the leases as of December 31, 2016 are as follows: Fiscal years ending: 2017 $682,000 2018 682,000 2019 644,000 2020 479,000 2021 462,000 Thereafter 737,000 $3,686,000 Rent expense was approximately $606,000, $536,000, and $537,000 for the years ended December 31, 2016, January 2, 2016 and January 3, 2015,respectively. As of December 31, 2016, deferred rent from these operating lease agreements increased to $641,000 compared to $138,000 as of January 2, 2016. InFebruary 2016, the Company renewed its lease for its laboratory facility located in Boulder, Colorado. Pursuant to the term of the renewal, the landlord madeimprovements to the facility’s HVAC system for approximately $180,000. Also, in April 2016, the Company entered into a lease to lease its research facilitylocated in Longmont, Colorado. Pursuant to the term of the lease, the landlord provided tenant improvements for approximately $352,000. These landlordprovided lease incentives (a) have been recorded as leasehold improvement assets and are amortized over the respective lease terms which are through April2023 and February 2024, respectively;and (b) have been recorded as deferred rent and are amortized as reductions to lease expense over the lease terms. Purchase obligations The Company enters into purchase obligations with various vendors for goods and services that we need for our operations. The purchase obligations forgoods and services include inventory, research and development, and outsourced laboratory services. Minimum future payments under purchase obligationsas of December 31, 2016 are as follows: Fiscal years ending: 2017 $3,096,000 2018 428,000 $3,524,000 Royalty The Company has 10 licensing agreements with leading research universities and other patent holders, pursuant to which the Company acquired patentsrelated to certain products the Company offers to its customers. These agreements afford for future royalty payments based on contractual minimums andexpire at various dates from December 31, 2019 through April 12, 2032. Yearly minimum royalty payments including license maintenance fees range from$10,000 per year to $50,000 per year, however, these minimum payments escalate each year with a maximum of $200,000 per year. In addition, the Companyis required to pay a range of 2% to 8% of sales related to the licensed products under these agreements. Total royalty expenses including license maintenancefees from continuing operations for the years ended December 31, 2016, January 2, 2016 and January 3, 2015 were approximately $773,000, $583,000 and$323,000, respectively under these agreements. Minimum royalties including license maintenance fees for the next five years are as follows: Fiscal years ending: 2017 $358,000 2018 396,000 2019 533,000 2020 367,000 2021 385,000 $2,039,000 -76-Table of Contents Legal proceedings On December 29, 2016, ChromaDex, Inc. filed a complaint (the “Complaint”) in the United States District Court for the Central District of California, namingElysium Health, Inc. as defendant. Among other allegations, ChromaDex, Inc. alleges in the Complaint that (i) Elysium breached the Supply Agreement,dated June 26, 2014, by and between ChromaDex, Inc. and Elysium Health, LLC (“Elysium”) (the “pTeroPure® Supply Agreement”), by failing to makepayments to ChromaDex, Inc. for purchases of pTeroPure® pursuant to the pTeroPure® Supply Agreement, (ii) Elysium breached the Supply Agreement,dated February 3, 2014, by and between ChromaDex, Inc. and Elysium, as amended (the “NIAGEN® Supply Agreement”), by failing to make payments toChromaDex, Inc. for purchases of NIAGEN® pursuant to the NIAGEN® Supply Agreement, (iii) Elysium breached the Trademark License and RoyaltyAgreement, dated February 3, 2014, by and between ChromaDex, Inc. and Elysium (the “License Agreement”), by failing to make payments to ChromaDex,Inc. for royalties due pursuant to the License Agreement and (iv) certain officers of Elysium made false promises and representations to induce ChromaDex,Inc. into providing large supplies of pTeroPure® and NIAGEN® to Elysium pursuant to the pTeroPure® Supply Agreement and NIAGEN® SupplyAgreement. ChromaDex, Inc. is seeking punitive damages, money damages and interest. On January 25, 2017, Elysium filed an answer and counterclaims (the “Counterclaim”) in response to the Complaint. Among other allegations, Elysiumalleges in the Counterclaim that (i) ChromaDex, Inc. breached the NIAGEN® Supply Agreement by not issuing certain refunds or credits to Elysium and forviolating certain confidential information provisions, (ii) ChromaDex, Inc. breached the implied covenant of good faith and fair dealing pursuant to theNIAGEN® Supply Agreement, (iii) ChromaDex, Inc. breached certain confidential provisions of the pTeroPure® Supply Agreement, (iv) ChromaDex, Inc.fraudulently induced Elysium into entering into the License Agreement (the “Fraud Claim”), (v) ChromaDex, Inc.’s conduct constitutes misuse of its patentrights (the “Patent Claim”) and (vi) ChromaDex, Inc. has engaged in unlawful or unfair competition under California state law (the “Unfair CompetitionClaim”). Elysium is seeking damages for ChromaDex, Inc.’s alleged breaches of the NIAGEN® Supply Agreement and pTeroPure® Supply Agreement, andcompensatory damages, punitive damages and/or rescission of the License Agreement and restitution of any royalty payments conveyed by Elysium pursuantto the License Agreement. On February 15, 2017, ChromaDex, Inc. filed an amended complaint (the “Amended Complaint”). In the Amended Complaint, ChromaDex, Inc. re-alleges theclaims in the Complaint, and also alleges that Elysium willfully and maliciously misappropriated ChromaDex, Inc.’s trade secrets. On February 15, 2017,ChromaDex, Inc. also filed a motion to dismiss the Fraud Claim, the Patent Claim and the Unfair Competition Claim. While ChromaDex, Inc. expresses noopinion as to the ultimate outcome of this matter, ChromaDex, Inc. believes Elysium’s allegations are without merit and will vigorously defend against them. As of December 31, 2016, ChromaDex, Inc. did not accrue a potential loss for the Counterclaim because ChromaDex, Inc. believes that the allegations arewithout merit and thus it is not probable that a liability had been incurred, and the amount of loss cannot be reasonably estimated. 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 thatis likely to have, individually or in the aggregate, a material adverse effect on our financial condition or results of operations. Severance payments to executive officers As of December 31, 2016, the Company has three executive officers, Frank Jaksch, Jr., Chief Executive Officer, Thomas Varvaro, Chief Financial Officer andTroy A. Rhonemus, Chief Executive Officer. Upon termination, Mr. Jaksch, Mr. Varvaro and Mr. Rhonemus will receive severance payments per the terms ofthe respective employment agreements entered with the Company. The key terms of the employment agreements, including the severance terms are asfollows: -77-Table of Contents Employment Agreement with Frank L. Jaksch Jr. On April 19, 2010, the Company entered into an Amended and Restated Employment Agreement (the “Jaksch Agreement”) with Frank L. Jaksch Jr. TheJaksch Agreement automatically renews unless terminated in accordance with its terms. On January 2, 2014, the Board approved raising the annual basesalary of Mr. Jaksch to $275,000 per year and the annual cash bonus target up to 50% of his base salary. On March 14, 2016, the Board increased the basesalary of Mr. Jaksch to $320,000. On April 25, 2016, Mr. Jaksch’s base salary increased to $370,000 as the Company’s common stock was listed on NasdaqStock Market. The severance terms provide that in the event Mr. Jaksch’s employment with the Company is terminated voluntarily, he will be entitled to any accrued butunpaid base salary, any stock vested through the date of his termination and a pro-rated portion of 50% of his salary for the bonus. In addition, if Mr. Jakschleaves the Company for “Good Reason”, (as defined in Jaksch Agreement), he will also be entitled to severance equal to 50% of his salary, and he will bedeemed to have been employed for the entirety of such year. Severance will then consist of 16 weeks of paid salary, unless Mr. Jaksch signs a release, inwhich case he will receive compensation up to 12 months paid salary. In the event the Company terminates Mr. Jaksch’s employment “without Cause” (as defined in the Jaksch Agreement), Mr. Jaksch will be entitled toseverance in the form of any stock vested through the date of his termination and continuation of his base salary for a period of eight weeks, or, if Mr. Jakschenters into a standard separation agreement, Mr. Jaksch will receive continuation of base salary and health benefits, together with applicable fringe benefitsuntil 24 months from the date of termination (the “Severance Period”), and he will receive a bonus of 50% of his base salary as well as the full vesting of anyotherwise unvested stock. Employment Agreement with Thomas C. Varvaro On April 19, 2010, the Company entered into an Amended and Restated Employment Agreement (the “Varvaro Agreement”) with Thomas C. Varvaro. TheVarvaro Agreement automatically renews unless terminated in accordance with its terms. On January 2, 2014, the Board approved raising the annual basesalary of Mr. Varvaro to $225,000 per year and raising the annual cash bonus target up to 40% of his base salary. On March 14, 2016, the Board increased thebase salary of Mr. Varvaro to $250,000. On April 25, 2016, Mr. Varvaro’s base salary increased to $300,000 as the Company’s common stock was listed onNasdaq Stock Market. The severance terms provide that in the event Mr. Varvaro’s employment with us is terminated voluntarily, he will be entitled to any accrued but unpaid basesalary, any stock vested through the date of his termination and a pro-rated portion of 40% of his salary for the bonus. In addition, if Mr. Varvaro leaves theCompany for “Good Reason” (as defined in the Varvaro Agreement), he will also be entitled to severance equal to 50% of his salary, and he shall be deemedto have been employed for the entirety of such year. Severance will then consist of 16 weeks of paid salary, unless Mr. Varvaro signs a release, in which casehe will receive compensation up to 12 months paid salary. In the event the Company terminates Mr. Varvaro’s employment “without Cause,” Mr. Varvaro will be entitled to severance in the form of any stock vestedthrough the date of his termination and continuation of his base salary for a period of eight weeks, or, if Mr. Varvaro enters into a standard separationagreement, Mr. Varvaro will receive continuation of base salary and health benefits, together with applicable fringe benefits until 24 months from the date oftermination (the “Severance Period”), will receive a bonus of 40% of his base salary as well as the full vesting of any otherwise unvested stock. Employment Agreement with Troy A. Rhonemus On March 6, 2014, the Company entered into an Employment Agreement (the “Rhonemus Agreement”) with Mr. Troy Rhonemus pursuant to which Mr.Rhonemus was appointed to serve as the Chief Operating Officer of the Company. On March 17, 2015, the Board increased the base salary to $190,000. TheRhonemus Agreement provides for an annual cash bonus (based on performance targets) of up to 30% of his base salary. On March 14, 2016, the Boardincreased the base salary of Mr. Rhonemus to $210,000. On April 25, 2016, Mr. Rhonemus’ base salary increased to $235,000 as the Company’s commonstock was listed on Nasdaq Stock Market. -78-Table of Contents Upon termination, Mr. Rhonemus will be entitled to any accrued but unpaid base salary and any accrued but unpaid welfare and retirement benefits up to thetermination date. In addition, if Mr. Rhonemus leaves the Company for “Good Reason” (as defined in the Rhonemus Agreement), he will also be entitled toseverance equal to two weeks of base salary for each full year of service to a maximum of eight weeks of the base salary. In the event the Company terminates Mr. Rhonemus’ employment “without Cause,” Mr. Rhonemus will be entitled to severance equal to two weeks of basesalary for each full year of service to a maximum of eight weeks of the base salary, or, if Mr. Rhonemus enters into a standard separation agreement, Mr.Rhonemus will receive continuation of base salary and health benefits, together with applicable fringe benefits as provided until the expiration of the term orrenewal term then in effect, however, that in the case of medical and dental insurance, until the expiration of 12 months from the date of termination. Note 14. Related Party Transactions On August 28, 2015, the Company entered into an Exclusive Supply Agreement (the “Supply Agreement”) with Healthspan Research, LLC (“Healthspan”).Under the terms of the Supply Agreement, Healthspan agreed to purchase NIAGEN® from the Company and the Company granted to Healthspan worldwiderights for resale of specific dietary supplements containing NIAGEN® in certain direct response channels. Pursuant to the terms of the Supply Agreement, in exchange for a 4% equity interest in Healthspan, the Company agreed to initially supply NIAGEN® toHealthspan up to a certain amount, and in exchange for an additional 5% equity interest in Healthspan, the Company will grant to Healthspan certainexclusive rights to resell NIAGEN®. Healthspan will pay the Company royalties on the cumulative worldwide net sales of its finished products containingNIAGEN®. The exclusivity rights will remain for so long as Healthspan meets certain minimum purchase requirements. In the event that, during the initialterm, the Company terminates the exclusivity rights due to failure to meet the minimum purchase requirements or for any reason other than a material breachof the Supply Agreement by Healthspan, then the 5% equity interest shall be automatically redeemed for a purchase price of $1.00 effective upon the date oftermination of the exclusivity rights. In connection with the foregoing, also on August 28, 2015, the Company and Healthspan entered into an interest purchase agreement and limited liabilitycompany agreement pursuant to which the Company was issued 9% of the outstanding equity interests of Healthspan. Rob Fried, a director of the Company,is the manager of Healthspan and owns 91% of the outstanding equity interests of Healthspan. The Supply Agreement, interest purchase agreement andlimited liability company agreement were unanimously approved by the independent directors of the Company. During the year ended December 31, 2016, the Company shipped NIAGEN® to Healthspan to satisfy part of our obligation to supply a certain amount ofNIAGEN® in exchange for the 4% equity interest in Healthspan, which our cost was approximately $20,000. This was recorded as a long-term investment atour cost. The Company accounts for its ownership interest under the cost method of accounting as the Company does not have an ability to exercise significantinfluence on Healthspan. Subsequent to the year ended December 31, 2016, the Company acquired all of the outstanding equity interests of Healthspan. Please refer to Note 17.Subsequent Events for more details on the acquisition of Healthspan. Note 15. Business Segmentation and Geographical Distribution The Company has the following three reportable segments: ●Ingredients segment develops and commercializes proprietary-based ingredient technologies and supplies these ingredients to the manufacturers ofconsumer products in various industries including the nutritional supplement, food and beverage and animal health industries. ●Core standards, and contract services segment includes supply of phytochemical reference standards, which are small quantities of plant-basedcompounds typically used to research an array of potential attributes, reference materials, and related contract services. ●Scientific and regulatory consulting segment which consist of providing scientific and regulatory consulting to the clients in the food, supplementand pharmaceutical industries to manage potential health and regulatory risks. -79-Table of Contents The “Other” classification includes corporate items not allocated by the Company to each reportable segment. Further, there are no intersegment sales thatrequire elimination. The Company evaluates performance and allocates resources based on reviewing gross margin by reportable segment. Year ended December 31, 2016 Ingredients CoreStandardsandContractServices RegulatoryConsulting segment segment segment Other Total Net sales $16,774,641 $9,371,001 $665,444 $- $26,811,086 Cost of sales 7,920,516 6,504,005 465,433 - 14,889,954 Gross profit 8,854,125 2,866,996 200,011 - 11,921,132 Operating expenses: Sales and marketing 1,196,711 1,042,878 11,000 - 2,250,589 Research and development 2,487,978 34,790 - - 2,522,768 General and administrative - - - 9,393,209 9,393,209 Operating expenses 3,684,689 1,077,668 11,000 9,393,209 14,166,566 Operating income (loss) $5,169,436 $1,789,328 $189,011 $(9,393,209) $(2,245,434) Year ended January 2, 2016 Ingredients CoreStandardsandContractServices RegulatoryConsulting segment segment segment Other Total Net sales $12,542,314 $8,418,672 $1,053,154 $- $22,014,140 Cost of sales 6,664,164 6,346,903 522,065 - 13,533,132 Gross profit 5,878,150 2,071,769 531,089 - 8,481,008 Operating expenses: Sales and marketing 1,111,993 1,201,455 13,340 - 2,326,788 Research and development 891,601 - - - 891,601 General and administrative - - - 7,416,451 7,416,451 Operating expenses 2,003,594 1,201,455 13,340 7,416,451 10,634,840 Operating income (loss) $3,874,556 $870,314 $517,749 $(7,416,451) $(2,153,832) -80-Table of Contents Year ended CoreStandards January 3, 2015 Ingredientssegment andContractServicessegment RegulatoryConsultingsegment Other Total Net sales $6,857,177 $7,487,189 $968,813 $- $15,313,179 Cost of sales 4,257,347 5,141,667 588,500 - 9,987,514 Gross profit 2,599,830 2,345,522 380,313 - 5,325,665 Operating expenses: Sales and marketing 1,081,209 975,800 79,575 - 2,136,584 Research and development 513,671 - - - 513,671 General and administrative - - - 7,860,930 7,860,930 Loss from investment in affiliate - - - 45,829 45,829 Operating expenses 1,594,880 975,800 79,575 7,906,759 10,557,014 Operating income (loss) $1,004,950 $1,369,722 $300,738 $(7,906,759) $(5,231,349) At December 31, 2016 CoreStandards Scientificand Ingredients andContractServices RegulatoryConsulting segment segment segment Other Total Total assets $13,257,289 $3,806,248 $112,192 $2,576,339 $19,752,068 At January 2, 2016 CoreStandards Scientificand Ingredients andContractServices RegulatoryConsulting segment segment segment Other Total Total assets $9,105,502 $3,306,624 $111,765 $6,225,318 $18,749,209 Revenues from international sources for the ingredients segment approximated $502,000, $277,000 and $35,000 for the years ended December 31, 2016,January 2, 2016 and January 3, 2015, respectively. Revenues from international sources for the core standards and contract services segment approximated$1,720,000, $1,651,000 and $1,756,000 for the years ended December 31, 2016, January 2, 2016 and January 3, 2015, respectively. Revenues frominternational sources for the scientific and regulatory consulting segment approximated $154,000, $283,000 and $104,000 for the years ended December 31,2016, January 2, 2016 and January 3, 2015, respectively. International sources which the Company generates revenue include Europe, North America, SouthAmerica, Asia, and Oceania. The Company’s long-lived assets are located within the United States. -81-Table of Contents Disclosure of major customers Major customers who accounted for more than 10% of the Company’s total sales were as follows: Years Ended Major Customers 2016 2015 2014 Customer C (Ingredients segment) 19.3% * * Customer B (Ingredients segment) * 11.0% * Customer A (Ingredients segment) * * 10.2% * Represents less than 10%. Major customers who accounted for more than 10% of the Company's total trade receivables were as follows: Percentage of the Company'sTotal Trade Receivables Major Customers At December31, 2016 At January 2,2016 Customer D (Ingredients and Core segment) 10.2% 22.8%Customer C (Ingredients segment) 45.8% * Customer A (Ingredients segment) * 14.7% * Represents less than 10%. Disclosure of major vendors Major vendors who accounted for more than 10% of the Company's total accounts payable were as follows: Percentage of the Company'sTotal Accounts Payable Major Vendors At December31, 2016 At January 2,2016 Vendor A (Ingredients segment) 39.5% 78.7%Vendor B (Ingredients segment) 20.8% * * Represents less than 10%. -82-Table of Contents Note 16. Quarterly Financial Information (unaudited) Three Months Ended April 2, 2016 July 2, 2016 October 1,2016 December 31,2016 Sales, net $7,331,945 $8,829,579 $5,007,450 $5,642,112 Cost of sales 3,880,526 4,702,132 2,964,980 3,342,316 Gross profit 3,451,419 4,127,447 2,042,470 2,299,796 Operating expenses 2,997,353 3,756,316 2,989,186 4,423,711 Operating income (loss) 454,066 371,131 (946,716) (2,123,915) Nonoperating expenses (187,701) (457,885) (10,827) (26,338)Provision for income taxes (10,740) 4,087 3,153 3,500 Net income (loss) $255,625 $(82,667) $(954,390) $(2,146,753) Basic earnings (loss) per common share $0.01 $(0.00) $(0.03) $(0.06) Diluted earnings (loss) per common share $0.01 $(0.00) $(0.03) $(0.06) Basic weighted average common shares outstanding 36,414,041 36,990,032 37,868,672 37,904,534 Diluted weighted average common shares outstanding 37,472,579 36,990,032 37,868,672 37,904,534 Three Months Ended April 4, 2015 July 4, 2015 October 3,2015 January 2,2016 Sales, net $5,260,971 $6,101,380 $6,287,309 $4,364,480 Cost of sales 3,333,347 3,630,688 3,805,679 2,763,418 Gross profit 1,927,624 2,470,692 2,481,630 1,601,062 Operating expenses 2,833,708 2,654,752 2,304,500 2,841,880 Operating income (loss) (906,084) (184,060) 177,130 (1,240,818) Nonoperating expenses (119,431) (131,132) (180,846) (181,299)Provision for income taxes - - - (4,527) Net loss $(1,025,515) $(315,192) $(3,716) $(1,426,644) Basic and Diluted loss per common share $(0.03) $(0.01) $(0.00) $(0.04) Basic and Diluted weighted average common shares outstanding 35,732,866 35,803,298 35,814,305 36,158,895 -83-Table of Contents Three Months Ended March 29,2014 June 28, 2014 September 27,2014 January 3,2015 Sales, net $3,074,138 $3,856,154 $4,139,710 $4,243,177 Cost of sales 2,089,130 2,457,388 2,616,764 2,824,232 Gross profit 985,008 1,398,766 1,522,946 1,418,945 Operating expenses 2,823,773 3,040,194 2,170,380 2,522,667 Operating loss (1,838,765) (1,641,428) (647,434) (1,103,722) Nonoperating expenses (9,251) (11,714) (12,219) (123,652) Net loss $(1,848,016) $(1,653,142) $(659,653) $(1,227,374) Basic and Diluted loss per common share $(0.05) $(0.05) $(0.02) $(0.03) Basic and Diluted weighted average common shares outstanding 35,358,787 35,395,195 35,536,800 35,643,016 Note 17. Subsequent Events Acquisition of Healthspan Research, LLC On March 12, 2017, ChromaDex Corporation acquired all of the outstanding equity interests of Healthspan Research, LLC (“Healthspan”) pursuant to aMembership Interest Purchase Agreement (the “Purchase Agreement”) by and among (i) Robert Fried, Jeffrey Allen and Dr. Charles Brenner (the “Sellers”)and (ii) ChromaDex Corporation (the “Acquisition”). Pursuant to the Purchase Agreement, ChromaDex purchased all of the outstanding membership interestsfrom the Sellers. Upon the closing of, and as consideration for, the Acquisition, ChromaDex Corporation issued an aggregate of 367,648 unregistered shares of ChromaDexCorporation’s common stock to the Sellers (the “Stock Consideration”) and, in cancellation of a loan owed by Healthspan to Mr. Fried, paid $32,500 to Mr.Fried and will also pay Mr. Fried $100,000 on March 12, 2018. The issuance of the Stock Consideration was not registered under the Securities Act of 1933,as amended (the “Securities Act”), and therefore may not be offered or sold in the United States absent registration or an applicable exemption fromregistration requirements. ChromaDex Corporation is relying on the exemption from federal registration under Section 4(a)(2) of the Securities Act and/orRule 506 promulgated thereunder. Hiring of Robert Fried as President and Chief Strategy Officer Also on March 12, 2017, the Board of Directors (“Board”) of ChromaDex Corporation appointed Robert Fried, a member of the Board since July 2015, asPresident and Chief Strategy Officer, effective immediately. Mr. Fried will continue to serve as a member of the Board, but resigned as a member of theNominating and Corporate Governance Committee of the Board. In connection with his appointment as President and Chief Strategy Officer, ChromaDex and Mr. Fried entered into an Executive Employment Agreement(the “Employment Agreement”). Pursuant to the Employment Agreement, Mr. Fried is entitled to: (i) an annual base salary of $300,000; (ii) an annual cashbonus equal to (a) 1% of net direct-to-consumer sales of products with nicotinamide riboside as a lead ingredient by ChromaDex plus (b) 2% of direct toconsumer net sales of products with nicotinamide riboside as a lead ingredient for the portion of such sales that exceeded prior year sales plus (c) 1% of thegross profit derived from nicotinamide riboside ingredient sales to dietary supplement producers; (iii) an option to purchase up to 500,000 shares ofChromaDex common stock under the ChromaDex Second Amended and Restated 2007 Equity Incentive Plan or any subsequent equity plan (the “Plan”),subject to monthly vesting over a three-year period; and (iv) 166,667 shares of restricted ChromaDex Corporation common stock, subject to annual vestingover a three-year period. Subject to requisite stockholder approval and Mr. Fried’s continuous service through such date, Mr. Fried is also eligible to receive (i) on March 12, 2018,166,667 shares of restricted ChromaDex Corporation common stock, subject to annual vesting over a two-year period, (ii) on March 12, 2019, 166,666 sharesof restricted ChromaDex Corporation common stock that vest in full on the one year anniversary of the grant date and (iii) up to 500,000 shares of fully-vested restricted ChromaDex Corporation common stock that will be granted upon the achievement of certain performance goals. -84-Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None. Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, with the participation of our principal executive officer and principal financial officer carried out an evaluation of the effectiveness of ourdisclosure controls and procedures as of December 31, 2016. Pursuant to Rule13a−15(e) promulgated by the Commission pursuant to the SecuritiesExchange Act of 1934, as amended (the “Exchange Act”) “disclosure controls and procedures” means controls and other procedures that are designed toinsure that information required to be disclosed by us in the reports that we file with the Commission is recorded, processed, summarized and reported withinthe time periods specified in the Commission’s rules and forms. “Disclosure controls and procedures” include, without limitation, controls and proceduresdesigned to insure that information that we are required to disclose in the reports we file with the Commission is accumulated and communicated to ourprincipal executive officer and principal financial officer as appropriate to allow timely decisions regarding required disclosure. Based on their evaluation,our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2016. Inherent Limitations on Disclosure Controls and Procedures The effectiveness of our disclosure controls and procedures is subject to various inherent limitations, including cost limitations, judgments used in decisionmaking, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover,projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditionsand the risk that the degree of compliance with policies or procedures may deteriorate over time. Because of these limitations, there can be no assurance thatany system of disclosure controls and procedures, no matter how well conceived, will be successful in preventing all errors or fraud or in making all materialinformation known in a timely manner to the appropriate levels of management. Changes in Internal Control over Financial Reporting There were no change in internal controls over financial reporting (as defined in Rule 13a−15(f) promulgated under the Exchange Act) that occurred duringour fourth fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting. Management Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-(f)under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of consolidated financial statements for external purposes in accordance with U.S. generally accepted accounting principles.Our internal control over financial reporting include those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our consolidated financial statements inaccordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizationsof our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that couldhave a material effect on the consolidated financial statements. -85-Table of Contents Our management, including the undersigned principal executive officer and principal financial officer, assessed the effectiveness of our internal control overfinancial reporting as of December 31, 2016. In conducting its assessment, our management used the criteria issued by the Committee of SponsoringOrganizations of the Treadway Commission in Internal Control—Integrated Framework in 2013. Based on this assessment, our management concluded that,as of December 31, 2016, our internal control over financial reporting was effective based on those criteria. Inherent Limitations on Internal Control Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations,including the possibility of human error and circumvention by collusion or overriding of control. Accordingly, even an effective internal control system maynot prevent or detect material misstatements on a timely basis. Also, projections of any evaluation of effectiveness to future periods are subject to the risk thatthe controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.Accordingly, our internal control over financial reporting is designed to provide reasonable assurance of achieving their objectives. Attestation Report of the Registered Public Accounting Firm The effectiveness of our internal control over financial reporting has been audited by Marcum LLP, an independent registered public accounting firm, asstated in their attestation report herein, which expresses an unqualified opinion on the effectiveness of our internal control over financial reporting as ofDecember 31, 2016. -86-Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ONINTERNAL CONTROL OVER FINANCIAL REPORTING To the Audit Committee of theBoard of Directors and Shareholders ofChromaDex Corporation We have audited ChromaDex Corporation and Subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2016, based oncriteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.The Company's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness ofinternal control over financial reporting, included in the accompanying “Management Annual Report on Internal Control over Financial Reporting”. Ourresponsibility is to express an opinion on the Company's internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require thatwe plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all materialrespects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing therisk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our auditalso included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis forour opinion. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal controlover financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are beingmade only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation ofeffectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that degree of compliancewith the policies or procedures may deteriorate. In our opinion, ChromaDex Corporation and Subsidiaries maintained, in all material aspects, effective internal control over financial reporting as ofDecember 31, 2016, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of theTreadway Commission in 2013. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheetsas of December 31, 2016 and January 2, 2016 and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years endedDecember 31, 2016, January 2, 2016 and January 3, 2015 of the Company and our report dated March 16, 2017 expressed an unqualified opinion on thosefinancial statements. /s/ Marcum LLP Marcum LLPNew York, NYMarch 16, 2017 -87-Table of Contents Item 9B. Other Information Acquisition of Healthspan Research, LLC On March 12, 2017, ChromaDex Corporation acquired all of the outstanding equity interests of Healthspan Research, LLC (“Healthspan”) pursuant to aMembership Interest Purchase Agreement (the “Purchase Agreement”) by and among (i) Robert Fried, Jeffrey Allen and Dr. Charles Brenner (the “Sellers”)and (ii) ChromaDex Corporation (the “Acquisition”). Pursuant to the Purchase Agreement, ChromaDex purchased all of the outstanding membership interestsfrom the Sellers. Upon the closing of, and as consideration for, the Acquisition, ChromaDex Corporation issued an aggregate of 367,648 unregistered shares of ChromaDexCorporation’s common stock to the Sellers (the “Stock Consideration”) and, in cancellation of a loan owed by Healthspan to Mr. Fried, paid $32,500 to Mr.Fried and will also pay Mr. Fried $100,000 on March 12, 2018. The issuance of the Stock Consideration was not registered under the Securities Act of 1933,as amended (the “Securities Act”), and therefore may not be offered or sold in the United States absent registration or an applicable exemption fromregistration requirements. ChromaDex Corporation is relying on the exemption from federal registration under Section 4(a)(2) of the Securities Act and/orRule 506 promulgated thereunder. Hiring of Robert Fried as President and Chief Strategy Officer Also on March 12, 2017, the Board of Directors (“Board”) of ChromaDex Corporation appointed Robert Fried, a member of the Board since July 2015, asPresident and Chief Strategy Officer, effective immediately. Mr. Fried will continue to serve as a member of the Board, but resigned as a member of theNominating and Corporate Governance Committee of the Board. Mr. Fried, age 57, has served as a director of ChromaDex since July 2015. Mr. Fried served as Chairman of the Board of Directors of IDI, Inc. (formerly TigerMedia, Inc.), an information solutions provider focused on the data fusion market and formerly a Chinese advertising company prior to its merger with theparent company of Interactive Data, LLC, from 2011 until June 2015. From 2007 through 2009, he was the president, Chief Executive Officer and a directorof Ideation Acquisition Corporation, a special purpose acquisition company. Mr. Fried is the founder and Chief Executive Officer of Feeln, a subscriptionstreaming video service, which was acquired by Hallmark Cards Inc. in 2012. Since then, Mr. Fried manages digital businesses for Hallmark including Feeln,Hallmark e-cards, and Hallmark Print on Demand. Mr. Fried is also an Academy Award winning motion picture producer whose credits include Rudy,Collateral, Boondock Saints, So I Married an Axe Murderer, Godzilla, and numerous others. From December 1994 until June 1996, he was President andChief Executive Officer of Savoy Pictures, a unit of Savoy Pictures Entertainment, Inc., which was sold in 1996 to Silver King Communications, which is nowa part of InterActive Corp. Mr. Fried has also held several executive positions including Executive Vice President in charge of Production for ColumbiaPictures, Director of Film Finance and Special Projects for Columbia Pictures, and Director of Business Development at Twentieth Century Fox. Mr. Friedholds an M.S. from Cornell University and an M.B.A. from the Columbia University Graduate School of Business. In connection with his appointment as President and Chief Strategy Officer, ChromaDex and Mr. Fried entered into an Executive Employment Agreement(the “Employment Agreement”). Pursuant to the Employment Agreement, Mr. Fried is entitled to: (i) an annual base salary of $300,000; (ii) an annual cashbonus equal to (a) 1% of net direct-to-consumer sales of products with nicotinamide riboside as a lead ingredient by ChromaDex plus (b) 2% of direct toconsumer net sales of products with nicotinamide riboside as a lead ingredient for the portion of such sales that exceeded prior year sales plus (c) 1% of thegross profit derived from nicotinamide riboside ingredient sales to dietary supplement producers; (iii) an option to purchase up to 500,000 shares ofChromaDex common stock under the ChromaDex Second Amended and Restated 2007 Equity Incentive Plan or any subsequent equity plan (the “Plan”),subject to monthly vesting over a three-year period; and (iv) 166,667 shares of restricted ChromaDex Corporation common stock, subject to annual vestingover a three-year period. Subject to requisite stockholder approval and Mr. Fried’s continuous service through such date, Mr. Fried is also eligible to receive(i) on March 12, 2018, 166,667 shares of restricted ChromaDex Corporation common stock, subject to annual vesting over a two-year period, (ii) on March12, 2019, 166,666 shares of restricted ChromaDex Corporation common stock that vest in full on the one year anniversary of the grant date and (iii) up to500,000 shares of fully-vested restricted ChromaDex Corporation common stock that will be granted upon the achievement of certain performance goals.Any unvested options or shares of restricted stock will vest in full upon (a) a change of control of ChromaDex Corporation, (b) Mr. Fried’s death, (c) Mr.Fried’s disability, (d) termination by ChromaDex Corporation of Mr. Fried’s employment without cause or (e) Mr. Fried’s resignation for good reason, subjectin each case to Mr. Fried’s continuous service as an employee or consultant of ChromaDex Corporation or any of its subsidiaries though such event. -88-Table of Contents If (i) Mr. Fried’s employment is terminated by ChromaDex Corporation without cause, for death or disability, or Mr. Fried resigns for good reason, or (ii) (a) achange of control of ChromaDex Corporation occurs and (b) within one month prior to the date of such change of control or twelve months after the date ofsuch change of control R. Fried’s employment is terminated by ChromaDex Corporation other than for cause, then, subject to executing a release, Mr. Friedwill receive (w) continuation of his base salary for 12 months, (x) COBRA premiums for 12 months, (y) a prorated annual cash bonus and (z) an extendedexercise period for his options. Mr. Fried is a party to ChromaDex Corporation’s form of indemnity agreement for directors and officers. Mr. Fried will receive no additional compensationfor his service on the Board. The foregoing summary of the Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the completeEmployment Agreement, a copy of which is attached hereto as Exhibit 10.65, and is incorporated herein by reference. Prior to the Acquisition, Mr. Fried owned approximately 84.7% of the outstanding equity interest of Healthspan. On August 28, 2015, ChromaDex enteredinto an Exclusive Supply Agreement (the “Supply Agreement”) with Healthspan. Under the terms of the Supply Agreement, Healthspan agreed to purchaseNIAGEN® from ChromaDex and ChromaDex granted to Healthspan worldwide rights for resale of specific dietary supplements containing NIAGEN® incertain direct response channels. Pursuant to the terms of the Supply Agreement, in exchange for a 4% equity interest in Healthspan, ChromaDex agreed toinitially supply NIAGEN® to Healthspan up to a certain amount, and in exchange for an additional 5% equity interest in Healthspan, ChromaDex wouldgrant to Healthspan certain exclusive rights to resell NIAGEN®. In connection with the foregoing, also on August 28, 2015, ChromaDex and Healthspanentered into an interest purchase agreement and limited liability company agreement pursuant to which ChromaDex was issued 9% of the outstanding equityinterests of Healthspan. During the year ended December 31, 2016, ChromaDex shipped NIAGEN® to Healthspan to satisfy part of its obligation to supply acertain amount of NIAGEN® in exchange for the 4% equity interest in Healthspan, which ChromaDex’s cost was approximately $20,000. In connection with the Acquisition, Mr. Fried received 339,595 unregistered shares of ChromaDex’s common stock and, in cancellation of a loan owed byHealthspan to Mr. Fried, a cash payment of $32,500, and will receive an additional cash payment of $100,000 on March 12, 2018. There are no arrangements or understandings between Mr. Fried and any other persons pursuant to which he was selected as ChromaDex Corporation’sPresident and Chief Strategy Officer. There are also no family relationships between Mr. Fried and any of ChromaDex Corporation’s directors or executiveofficers and he has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K, other than thetransactions listed above. Cash Bonuses On March 14, 2017, the Board approved 2016 incentive cash bonus payments to our executive officers. The bonus payments were based on an assessment ofthe achievement of corporate goals set out and approved by the Board of Directors in 2016. The 2016 cash bonuses approved for each of our namedexecutive officers were as follows: Name 2016 Cash Bonus Frank L. Jaksch, Jr. $122,562 Thomas Varvaro $79,500 Troy Rhonemus $46,706 -89-Table of Contents PART III Item 10. Directors, Executive Officers and Corporate Governance Information required by this item will be contained in the Proxy Statement under the headings “Management and Corporate Governance,” and “Section 16(a)Beneficial Ownership Reporting Compliance,” and is incorporated herein by reference. Item 11. Executive Compensation The information required by this item regarding executive compensation is incorporated by reference to the information set forth in the sections titled“Executive Compensation” in the Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this item regarding security ownership of certain beneficial owners and management is incorporated by reference to theinformation set forth in the section titled “Security Ownership of Certain Beneficial Owners and Management” in the Proxy Statement. The information required by Item 201(d) of Regulation S-K is incorporated by reference to the information set forth in the section titled “ExecutiveCompensation” in the Proxy Statement. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this item regarding certain relationships and related transactions and director independence is incorporated by reference to theinformation set forth in the sections titled “Certain Relationships and Related Transactions” and “Management and Corporate Governance – DirectorIndependence,” respectively, in the Proxy Statement. Item 14. Principal Accounting Fees and Services The information required by this item regarding principal accountant fees and services is incorporated by reference to the information set forth in the sectiontitled “Audit Fees” in the Proxy Statement. -90-Table of Contents PART IV Item 15. Exhibits and Financial Statement Schedules (a)(1) Financial Statements Reference is made to Item 8 of this Form 10-K. (a)(2) Financial Statement Schedules All schedules have been omitted because they are not required or because the required information is given in the Financial Statements or Notes thereto setforth under Part II, Item 8 of this Form 10-K. (a)(3) List of Exhibits Reference is made to the Exhibit Index immediately following the signature page of this Form 10-K. The exhibits listed in the Exhibit Index are filed orincorporated by reference as part of this Form 10-K. -91-Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on itsbehalf by the undersigned thereunto duly authorized, on the 16th day of March 2017. CHROMADEX CORPORATION By: /s/ FRANK L. JAKSCH JR. Frank L. Jaksch Jr. Chief Executive Officer KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Frank L. Jaksch Jr. and Thomas C.Varvaro, and each of them, his true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, placeand stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this report, and to file the same, with allexhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact andagents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith,as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or either ofthem, or their or his substitutes or substitute, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant inthe capacities and on the dates indicated. Signature Title Date /s/ FRANK L. JAKSCH JR. Chief Executive Officer and Director March 16, 2017Frank L. Jaksch Jr. (Principal Executive Officer) /s/ THOMAS C. VARVARO Chief Financial Officer and Secretary March 16, 2017Thomas C. Varvaro (Principal Financial and Accounting Officer) /s/ ROBERT FRIED President, Chief Strategy Officer and Director March 16, 2017Robert Fried /s/ STEPHEN ALLEN Chairman of the Board and Director March 16, 2017Stephen Allen /s/ STEPHEN BLOCK Director March 16, 2017Stephen Block /s/ JEFF BAXTER Director March 16, 2017Jeff Baxter /s/ KURT GUSTAFSON Director March 16, 2017Kurt Gustafson -92-Table of Contents EXHIBIT INDEX Exhibit No. Description2.1 Agreement and Plan of Merger, dated as of May 21, 2008, among Cody, CDI Acquisition, Inc. and ChromaDex, Inc. as amended on June 10,2008 (incorporated by reference from, and filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Commission onJune 24, 2008)3.1 Amended and Restated Certificate of Incorporation of ChromaDex Corporation, a Delaware corporation ❖3.2 Certificate of Amendment to the Certificate of Incorporation of ChromaDex Corporation, a Delaware corporation (incorporated by referencefrom, and filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Commission on April 12, 2016)3.3 Bylaws of ChromaDex Corporation, a Delaware corporation (incorporated by reference from, and filed as Exhibit 3.2 to the Company’sCurrent Report on Form 8-K filed with the Commission on June 24, 2008)3.4 Amendment to Bylaws of ChromaDex Corporation, a Delaware corporation (incorporated by reference from, and filed as Exhibit 3.1 to theCompany’s Current Report on Form 8-K filed with the Commission on July 19, 2016)4.1 Form of Stock Certificate representing shares of ChromaDex Corporation Common Stock (incorporated by reference from, and filed asExhibit 4.1 of the Company’s Annual Report on Form 10-K 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 andChromaDex (incorporated by reference from, and filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with theCommission on June 24, 2008)4.3 Tag-Along Agreement effective as of December 31, 2005, by and among the Company, Frank Louis Jaksch, Snr. & Maria Jaksch, Trustees ofthe Jaksch Family Trust, Margery Germain, Lauren Germain, Emily Germain, Lucie Germain, Frank Louis Jaksch, Jr., and the University ofMississippi Research Foundation (incorporated by reference from, and filed as Exhibit 4.2 to the Company’s Current Report on Form 8-Kfiled with the Commission on June 24, 2008)4.4 Form of Stock Certificate representing shares of ChromaDex Corporation Common Stock (New design effective as of January 1, 2016,incorporated as by reference from and filed as Exhibit 4.4 to the Company’s Annual Report on Form 10-K filed with the Commission onMarch 17, 2016)10.1 ChromaDex, Inc. 2000 Non-Qualified Incentive Stock Option Plan effective October 1, 2000 (incorporated by reference from, and filed asExhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on June 24, 2008)(1)+10.2 Second Amended and Restated 2007 Equity Incentive Plan effective March 13, 2007, as amended May 20, 2010 (incorporated by referencefrom, and filed as Appendix B to the Company’s Current Definitive Proxy Statement on Schedule 14A filed with the Commission on May 4,2010)(1)+10.3 Form of Stock Option Agreement under the ChromaDex, Inc. Second Amended and Restated 2007 Equity Incentive Plan (incorporated byreference from, and filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the Commission on June 24, 2008)(1)+10.4 Form of Restricted Stock Purchase Agreement under the ChromaDex, Inc. 2007 Equity Incentive Plan (incorporated by reference from, andfiled as Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the Commission on June 24, 2008)(1)+10.5 Amended and Restated Employment Agreement dated April 19, 2010, by and between Frank L. Jaksch, Jr. and ChromaDex, Inc.(incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission onApril 22, 2010)(1)+10.6 Amended and Restated Employment Agreement dated April 19, 2010, by and between Thomas C. Varvaro and ChromaDex, Inc.(incorporated by reference from, and filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Commission onApril 22, 2010)(1)+10.7 Standard Industrial/Commercial Multi-Tenant Lease – Net dated December 19, 2006, by and between ChromaDex, Inc. and SCIF PortfolioII, LLC (incorporated by reference from, and filed as Exhibit 10.7 to the Company’s Current Report on Form 8-K filed with the Commissionon June 24, 2008) -93-Table of Contents 10.8 First Amendment to Standard Industrial/Commercial Multi-Tenant Lease, made as of July 18, 2008, between SCIF Portfolio II, LLC(“Lessor”) and ChromaDex, Inc. (“Lessee”) (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K filed with the Commission on July 23, 2008)10.9 Second Amendment to Standard Industrial/Commercial Multi-Tenant Lease, made as of May 7, 2013, between SCIF Portfolio II, LLC(“Lessor”) and ChromaDex, Inc. (“Lessee”) (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K filed with the Commission on May 7, 2013)10.10 First Amendment to Standard Industrial/Commercial Multi-Tenant Lease, made as of July 18, 2008, between SCIF Portfolio II, LLC(“Lessor”) and ChromaDex, Inc. (“Lessee”) (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Current Report onForm 8-K filed with the Commission on July 23, 2008)10.11 Lease Agreement dated October 26, 2001, by and between Railhead Partners, LLC and NaPro BioTherapeutics, Inc., as assigned toChromaDex Analytics, Inc. on April 9, 2003 and amended on September 24, 2003 (incorporated by reference from, and filed as Exhibit 10.8to the Company’s Current Report on Form 8-K filed with the Commission on June 24, 2008)10.12 Second Addendum to Lease Agreement, made as of April 27, 2009, by and between Railhead Partners, LLC and ChromaDex Analytics, Inc.(incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission onApril 28, 2009)10.13 Third Addendum to Lease Agreement, made as of February 29, 2016, by and between Railhead Partners, LLC and ChromaDex Analytics,Inc. (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission onMarch 3, 2016)10.14 Licensing Agreement Nutraceutical Standards effective as of December 31, 1999 between the University of Mississippi ResearchFoundation and ChromaDex (incorporated by reference from, and filed as Exhibit 10.9 to the Company’s Current Report on Form 8-K filedwith the Commission on June 24, 2008)10.15 Equity Based License Agreement dated October 25, 2001, by and between the Company and Bayer Innovation, as amended as of October30, 2003 (incorporated by reference from, and filed as Exhibit 10.10 to the Company’s Current Report on Form 8-K filed with theCommission on June 24, 2008)10.16 Stock Redemption Agreement, dated June 18, 2008 between ChromaDex, Inc. and Bayer Innovation GmbH (formerly named BayerInnovation Beteiligungsgesellschaft mbH) (incorporated by reference from, and filed as Exhibit 10.13 to the Company’s Current Report onForm 8-K filed with the Commission on June 24, 2008)10.17 License Agreement, dated March 25, 2010 between the University of Mississippi and ChromaDex, Inc. (incorporated by reference from, andfiled as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed with the Commission on May 18, 2010)*10.18 First Amendment to License Agreement, made as of June 3, 2011 between the University of Mississippi and ChromaDex, Inc. (incorporatedby reference from, and filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on August 11,2011)*10.19 Restated and Amended License Agreement, effective as of June 3, 2015 between the University of Mississippi and ChromaDex, Inc.(incorporated by reference from, and filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the Commission onAugust 13, 2015)*10.20 License Agreement, dated July 5, 2011 between ChromaDex, Inc. and Cornell University (incorporated by reference from, and filed asExhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 10, 2011)*10.21 Exclusive License Agreement, dated September 8, 2011 between the Regents of the University of California and ChromaDex, Inc.(incorporated by reference from, and filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the Commission onNovember 10, 2011)*10.22 First Amendment to the License Agreement, effective as of September 5, 2014 between the Regents of the University of California andChromaDex, Inc. (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with theCommission on November 6, 2014)*10.23 Second Amendment to the License Agreement, effective as of December 31, 2015, between the Regents of the University of California andChromaDex, Inc. (incorporated by reference from, and filed as Exhibit 10.8 to the Company’s Quarterly Report on Form 10-Q filed with theCommission on November 10, 2016)* -94-Table of Contents 10.24 Exclusive License Agreement, dated July 13, 2012 between Dartmouth College and ChromaDex, Inc. (incorporated by reference from, andfiled as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 10, 2016)10.25 Exclusive License Agreement, dated March 7, 2013 between Washington University and ChromaDex, Inc. (incorporated by reference from,and filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 10, 2016)10.26 Amendment #1 to Exclusive License Agreement, effective as of December 15, 2015, between Washington University and ChromaDex, Inc.(incorporated by reference from, and filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q filed with the Commission onNovember 10, 2016)10.27 Niagen Supply Agreement, dated July 9, 2013, by and between ChromaDex, Inc. and Thorne Research, Inc. (incorporated by reference from,and filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the Commission on July 12, 2013)10.28 Addendum to the Nicotinamide Riboside Supply Agreement, dated July 24, 2015, by and between ChromaDex, Inc. and Thorne Research,Inc. (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Commissionon November 10, 2016)*10.29 Second Addendum to the Nicotinamide Riboside Supply Agreement, dated September 14, 2016, by and between ChromaDex, Inc. andThorne Research, Inc. (incorporated by reference from, and filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed withthe Commission on November 10, 2016)*10.30 License Agreement, made as of August 1, 2013, between Green Molecular S.L., Inc. and ChromaDex, Inc. (incorporated by reference from,and filed as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 10, 2016)10.31 NIAGEN® Supply Agreement by and between ChromaDex, Inc. and 5Linx Enterprises, Inc. effective as of January 3, 2014 (incorporated byreference from, and filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on May 8, 2014)*10.32 Purenergy Supply Agreement by and between ChromaDex, Inc. and 5Linx Enterprises, Inc. effective as of January 3, 2014 (incorporated byreference from, and filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on May 8, 2014)*10.33 Addendum to NIAGEN® Supply Agreement, effective as of June 26, 2014, between 5Linx Enterprises, Inc. and ChromaDex, Inc.(incorporated by reference from, and filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed with the Commission onMay 12, 2016)10.34 First Amendment to NIAGEN® Supply Agreement, effective as of March 31, 2015, between 5Linx Enterprises, Inc. and ChromaDex, Inc.(incorporated by reference from, and filed as Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q filed with the Commission onMay 12, 2016)*10.35 Second Amendment to NIAGEN® Supply Agreement, effective as of March 3, 2016, between 5Linx Enterprises, Inc. and ChromaDex, Inc.(incorporated by reference from, and filed as Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q filed with the Commission onMay 12, 2016)*10.36 Employment Agreement by and between ChromaDex Corp. and Troy Rhonemus dated March 6, 2014 (incorporated by reference from, andfiled as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on March 10, 2014)+10.37 Exclusive License Agreement, effective as of May 16, 2014 between Dartmouth College and ChromaDex, Inc. (incorporated by referencefrom, and filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on August 12, 2014)*10.38 First Amendment to Exclusive License Agreement, effective as of June 13, 2016, between Dartmouth College and ChromaDex, Inc.(incorporated by reference from, and filed as Exhibit 10.10 to the Company’s Quarterly Report on Form 10-Q filed with the Commission onNovember 10, 2016)*10.39 Loan and Security Agreement by and between ChromaDex Corporation and Hercules Technology II, L.P., as Lender and HerculesTechnology Growth Capital, Inc., as agent dated September 29, 2014 (incorporated by reference from, and filed as Exhibit 10.39 to theCompany’s Annual report on Form 10-K filed with the Commission on March 19, 2015) -95-Table of Contents 10.40 Amendment No. 1 to Loan and Security Agreement by and between ChromaDex Corporation and Hercules Technology II, L.P., as Lenderand Hercules Technology Growth Capital, Inc., as agent dated June 17, 2015 (incorporated by reference from and filed as Exhibit 10.1 to theCompany’s Current Report on Form 8-K filed with the Commission on June 19, 2015)10.41 License Agreement, effective as of October 15, 2014 between University of Mississippi and ChromaDex, Inc. (incorporated by referencefrom, and filed as Exhibit 10.40 to the Company’s Annual report on Form 10-K filed with the Commission on March 19, 2015)*10.42 First Amendment to Exclusive License Agreement, effective as of July 6, 2015, between University of Mississippi and ChromaDex, Inc.(incorporated by reference from, and filed as Exhibit 10.7 to the Company’s Quarterly report on Form 10-Q filed with the Commission onNovember 10, 2016)10.43 Exclusive License and Supply Agreement, effective as of May 12, 2015 between Suntava, Inc. and ChromaDex, Inc. (incorporated byreference from, and filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on August 13, 2015)*10.44 Exclusive Supply Agreement, effective as of August 27, 2015 between Healthspan Research, LLC and ChromaDex, Inc. (incorporated byreference from, and filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 12,2015)*10.45 Limited Liability Company Agreement, effective as of August 27, 2015 between Healthspan Research LLC and ChromaDex, Inc.(incorporated by reference from, and filed as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the Commission onNovember 12, 2015)*10.46 Interest Purchase Agreement, effective as of August 27, 2015 between Healthspan Research LLC and ChromaDex, Inc. (incorporated byreference from, and filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 12,2015)*10.47 Take or Pay Purchase Agreement for nicotinamide riboside chloride, effective as of September 21, 2015, between W.R. Grace & Co. Conn.And ChromaDex, Inc. (incorporated by reference from, and filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed withthe Commission on November 12, 2015)*10.48 Supply Agreement, effective as of August 28, 2015 and First Addendum to Supply Agreement, effective as of September 30, 2015 betweenNectar7 LLC and ChromaDex, Inc. (incorporated by reference from, and filed as Exhibit 10.5 to the Company’s Quarterly Report on Form10-Q filed with the Commission on November 12, 2015)*10.49 Second Addendum to Supply Agreement, effective as of January 28, 2016, between Nectar7 LLC and ChromaDex, Inc. (incorporated byreference from, and filed as Exhibit 10.9 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 10,2016)*10.50 Form of Securities Purchase Agreement, dated as of November 4, 2015, between existing stockholders and ChromaDex Corporation.(incorporated by reference from and filed as Exhibit 10.01 to the Company’s Current Report on Form 8-K filed with the Commission onNovember 5, 2015)10.51 Form of Warrant under the Securities Purchase Agreement, dated as of November 4, 2015, between existing stockholders and ChromaDexCorporation (incorporated by reference from and filed as Exhibit 10.02 to the Company’s Current Report on Form 8-K filed with theCommission on November 5, 2015)10.52 Joint Development Agreement, effective as of October 30, 2015, between the Procter & Gamble Company and ChromaDex, Inc.*10.53 Form of Securities Purchase Agreement, dated as of March 11, 2016, between an existing stockholder and ChromaDex Corporation(incorporated by reference from and filed as Exhibit 10.01 to the Company’s Current Report on Form 8-K filed with the Commission onMarch 11, 2016)10.54 Form of Warrant under the Securities Purchase Agreement, dated as of March 11, 2016, between an existing stockholder and ChromaDexCorporation (incorporated by reference from and filed as Exhibit 10.02 to the Company’s Current Report on Form 8-K filed with theCommission on March 11, 2016)10.55 Lease Agreement, made as of April 14, 2016, by and between Longmont Diagonal Investments LLC and ChromaDex Analytics, Inc.(incorporated by reference from and filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on April20, 2016) -96-Table of Contents 10.56 Supply Agreement, effective as of February 3, 2014, between Elysium Health, Inc. and ChromaDex, Inc. (incorporated by reference from,and filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on May 12, 2016)*10.57 Supply Agreement, effective as of June 26, 2014, between Elysium Health, Inc. and ChromaDex, Inc. (incorporated by reference from, andfiled as Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on May 12, 2016)*10.58 Amendment to Supply Agreement, effective as of February 19, 2016, between Elysium Health, Inc. and ChromaDex, Inc. (incorporated byreference from, and filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on May 12, 2016)*10.59 Form of Securities Purchase Agreement, dated as of June 3, 2016, between an existing stockholder and ChromaDex Corporation(incorporated by reference from and filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on June6, 2016)10.60 Business Financing Agreement, dated as of November 4, 2016, between Western Alliance Bank and ChromaDex Corporation ❖10.61 First Business Financing Modification Agreement, dated as of February 16, 2017, between Western Alliance Bank and ChromaDexCorporation ❖10.62 Second Business Financing Modification Agreement, dated as of March 12, 2017, between Western Alliance Bank and ChromaDexCorporation ❖10.63 Form of Indemnity Agreement, between ChromaDex Corporation and each of its existing directors and executive officers. (incorporated byreference from and filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission on December 16, 2016)+10.64 Amended and Restated Non-Employee Director Compensation Policy ❖ +10.65 Executive Employment Agreement, dated as of March 12, 2017, between Robert Fried and ChromaDex Corporation ❖ +21.1 Subsidiaries of ChromaDex Corporation ❖23.1 Consent of Marcum, LLP, Independent Registered Public Accounting Firm ❖31.1 Certification of the Chief Executive Officer pursuant to §240.13a-14 or §240.15d-14 of the Securities Exchange Act of 1934, as amended ❖31.2 Certification of the Chief Financial Officer pursuant to §240.13a-14 or §240.15d-14 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) ❖ _________❖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, amongChromaDex Corporation (formerly Cody Resources, Inc.), CDI Acquisition, Inc. and ChromaDex, Inc.+Indicates management contract or compensatory plan or arrangement.*This Exhibit has been granted confidential treatment and has been filed separately with the Commission. The confidential portions of this Exhibithave been omitted and are marked by an asterisk. -97- Exhibit 3.1 AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF CHROMADEX CORPORATION ChromaDex Corporation, a corporation organized and existing under the laws and by virtue of the General Corporation Law of the State of Delaware(the “Corporation”). DOES HEREBY CERTIFY: 1. The name of the Corporation is ChromaDex Corporation. 2. The Corporation was originally incorporated under the name Cody Resources, Inc. The date of filing of the original Certificate of Incorporation ofthe Corporation with the Secretary of State of the State of Delaware was June 19, 2008 (the “Initial Certificate”). The date of the filing of the name change toChromaDex Corporation with the Secretary of State of the State of Delaware was June 20, 2008 (together with the Initial Certificate, the “Original Certificateof Incorporation”). 3. This Amended and Restated Certificate of Incorporation was duly adopted by the Board of Directors of the Corporation and holders of a majority ofshares entitled to vote thereon pursuant to the applicable provisions of Sections 242 and 245 of the General Corporation Law of the State of Delaware. 4. The Original Certificate of Incorporation, shall be amended and restated in its entirety to read as follows: I. The name of this corporation is ChromaDex Corporation. II. The address, including street, number, city and country, of the registered office of the corporation in the State of Delaware is Corporation Trust Center,1209 Orange Street, in the City of Wilmington, County of New Castle, Delaware, 19801; and the name of the registered agent of the Corporation in the Stateof Delaware at such address is The Corporation Trust Company. III. The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Lawof the State of Delaware. IV. The Corporation is authorized to issue one class of stock, which shall be designated as “Common Stock”. The total number of shares of Common Stockthe Corporation is authorized to issue is One Hundred Fifty Million (150,000,000) with a par value of $.001 per share. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, repeal, alter, amend andrescind any or all of the Bylaws of the corporation. V. The number of directors of the corporation shall be fixed from time to time by a bylaw or amendment thereof duly adopted by the Board of Directors orby the stockholders. VI. The election of directors need not be by written ballot unless the Bylaws of the corporation shall so provide. VII. Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws may provide. The books of the corporation may be kept(subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Boardof Directors or in the Bylaws of the corporation. -1- VIII. The corporation shall, to the fullest extent permitted by Section 145 of the General Corporation Law of Delaware, as the same exists or as may hereafterbe amended and supplemented from time to time, indemnify any and all directors and officers whom it shall have the power to indemnify under saidSection 145 from and against any and all of the expenses, liabilities, or other matters referred to or covered by said Section, and the indemnification providedfor herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any bylaw, agreement, vote of stockholders ordisinterested directors or otherwise, both as to action in their official capacities and as to action in another capacity while holding such office, and shallcontinue as to a person who has ceased to be a director or officer, and shall inure to the benefit of the heirs, executors, and administrators of such a person. Tothe fullest extent permitted by Delaware law, as it may be amended from time to time, no director of the Corporation shall be personally liable to theCorporation or any of its stockholders for monetary damages for breach of fiduciary duty as a director. IX. The corporation reserves the right at any time, and from time to time, to amend, alter, change or repeal any provision contained in this Certificate ofIncorporation, and other provisions authorized by the laws of the State of Delaware at the time in force may be added or inserted, in the manner now orhereafter prescribed by law; and all rights, preferences and privileges of whatsoever nature conferred upon stockholders, directors or any other personswhomsoever by and pursuant to this Certificate of Incorporation in its present form or as hereafter amended are granted subject to the rights reserved in thisarticle. IN WITNESS WHEREOF, ChromaDex Corporation has caused this Amended and Restated Certificate of Incorporation to be signed by Frank L.Jaksch, Jr., its President and Chief Executive Officer, this 20th day of May, 2010. CHROMADEX CORPORATION By: /s/ Frank L. Jaksch, Jr. Frank L. Jaksch, Jr.,President and Chief Executive Officer -2- Exhibit 10.60 BUSINESS FINANCING AGREEMENT Borrowers:CHROMADEX CORPORATION, Lender:WESTERN ALLIANCE BANK,a Delaware corporation an Arizona corporation 55 Almaden Boulevard, Suite 100 CHROMADEX, INC., San Jose, CA 95113 a California corporation CHROMADEX ANALYTICS, INC., a Nevada corporation SPHERIX CONSULTING, INC., a Delaware corporation 10005 Muirlands Blvd., Suite G Irvine, CA 92618 This BUSINESS FINANCING AGREEMENT, dated as of November 4, 2016, is made and entered into between WESTERN ALLIANCE BANK, anArizona corporation (“Lender”) and CHROMADEX CORPORATION, a Delaware corporation, CHROMADEX, INC., a California corporation,CHROMADEX ANALYTICS, INC., a Nevada corporation and SPHERIX CONSULTING, INC., a Delaware corporation (each, a “Borrower” and collectively,“Borrowers”) on the following terms and conditions: 1.REVOLVING CREDIT LINE. 1.1Advances. Subject to the terms and conditions of this Agreement, from the date on which this Agreement becomes effective until theMaturity Date, Lender will make Advances to Borrowers not exceeding the Credit Limit or the Borrowing Base, whichever is less; providedthat in no event shall Lender be obligated to make any Advance that results in an Overadvance or while any Overadvance is outstanding.Amounts borrowed under this Section may be repaid and subject to the terms and conditions hereof reborrowed during the term of thisAgreement. It shall be a condition to each Advance that (a) an Advance Request acceptable to Lender has been received by Lender, (b) allof the representations and warranties set forth in Section 3 are true and correct in all material respects on the date of such Advance as thoughmade at and as of each such date, and (c) no Default has occurred and is continuing, or would result from such Advance. 1.2Advance Requests. A Borrower may request that Lender make an Advance by delivering to Lender an Advance Request therefor andLender shall be entitled to rely on all the information provided by Borrowers to Lender on or with the Advance Request. Lender may honorAdvance Requests, instructions or repayments given by any Borrower (if an individual) or by any Authorized Person. So long as all of theconditions for an Advance set forth herein have been satisfied, Lender shall fund such Advance into Borrowers’ Account within onebusiness day of Lender's receipt of the applicable Advance Request. 1.3Due Diligence. Lender may audit Borrowers’ Receivables/Eligible Inventory and any and all records pertaining to the Collateral, atLender’s sole discretion (subject to the following provisions) and at Borrowers expense. The first such audit shall be completed prior to thefirst Advance being made and no less often than annually thereafter. Lender may at any time and from time to time contact Account Debtorsand other persons obligated or knowledgeable in respect of Receivables/Eligible Inventory to, among other things, confirm the ReceivableAmount of such Receivables/Eligible Inventory, to determine whether Receivables/Eligible Inventory constitute Eligible Receivables orthe value of the Eligible Inventory, and for any other purpose in connection with this Agreement. If any of the Collateral or Borrowers’books or records pertaining to the Collateral are in the possession of a third party, Borrowers authorize that third party to permit Lender orits agents to have access to perform inspections or audits thereof and to respond to Lender's requests for information concerning suchCollateral and records. -1- 1.4Collections. (a)Lender shall have the exclusive right to receive all Collections on all Receivables. Borrowers shall, within 60 days of the date ofthis Agreement, (i) notify, transfer and deliver to Lender all Collections Borrowers receive for deposit into the Collection Account,(ii) deliver to Lender a detailed cash receipts journal on Friday of each week until the Lockbox is operational, and (iii)immediately enter into a collection services agreement acceptable to Lender (the “Lockbox Agreement”) pursuant to which allCollections received in the Lockbox shall be deposited into the Collection Account. Borrowers shall use the Lockbox address asthe remit to and payment address for all of Borrowers’ Collections from Account Debtors, and within 60 days of the date of thisAgreement, Borrowers shall instruct all Account Debtors to make payments either directly to the Lockbox for deposit by Lenderdirectly to the Collection Account, or instruct them to deliver such payments to Lender by wire transfer, ACH, or other means asLender may direct for deposit to the Lockbox or Collection Account. It will be considered an immediate Event of Default if thisdoes not occur or the Lockbox is not operational within 60 days of the date of this Agreement. (b)At Lender’s option, Lender may either (i) transfer all Collections deposited into the Collection Account to Borrowers’ Account, or(ii) apply the Collections deposited into the Collection Account to the outstanding Account Balance, in either case, within threebusiness days of the date received; provided that upon the occurrence and during the continuance of any Default, Lender mayapply all Collections to the Obligations in such order and manner as Lender may determine. Lender has no duty to do any act otherthan to apply such amounts as required above. If an item of Collections is not honored or Lender does not receive good funds forany reason, any amount previously transferred to Borrowers’ Account or applied to the Account Balance shall be reversed as of thedate transferred or applied, as applicable, and, if applied to the Account Balance, the Finance Charge will accrue as if theCollections had not been so applied. Lender shall have, with respect to any goods related to the Receivables, all the rights andremedies of an unpaid seller under the UCC and other applicable law, including the rights of replevin, claim and delivery,reclamation and stoppage in transit. -2- 1.5Receivables Activity Report. Within 30 days after the end of each Month End, Lender shall send to Borrowers a report covering thetransactions for the prior billing period, including the amount of all Advances, Collections, Adjustments, Finance Charges, and other feesand charges. The accounting shall be deemed correct and conclusive unless a Borrower makes a written objection to Lender within 30 daysafter Lender sends the accounting to Borrowers. 1.6Adjustments. In the event any Adjustment or dispute is asserted by any Account Debtor, Borrowers shall promptly advise Lender and shall,subject to Lender’s approval, resolve such disputes and advise Lender of any Adjustments; provided that in no case will the aggregateAdjustments made with respect to all Receivables exceed $50,000 in the aggregate in any calendar month unless Borrowers have obtainedthe prior written consent of Lender. So long as any Obligations are outstanding, Lender shall have the right, at any time, to take possessionof any rejected, returned, or recovered personal property. If such possession is not taken by Lender, Borrowers shall, if requested by Lender,resell such returned, rejected or recovered personal property for Lender’s account at Borrowers’ expense with the proceeds made payable toLender. While Borrowers retain possession of any returned goods, Borrowers shall, if requested by Lender, segregate said goods and markthem as property of Lender. 1.7Recourse; Maturity. Advances and the other Obligations shall be with full recourse against Borrowers. On the Maturity Date, Borrowerswill pay all then outstanding Advances and other Obligations to Lender or such earlier date as shall be herein provided. 1.8Letter of Credit Line. Subject to the terms and conditions of this Agreement, Lender hereby agrees to issue or cause an Affiliate to issueletters of credit for the account of any Borrower (each, a "Letter of Credit" and collectively, "Letters of Credit") from time to time;provided that (a) the Letter of Credit Obligations shall not at any time exceed the Letter of Credit Sublimit and (b) the Letter of CreditObligations will be treated as Advances for purposes of determining availability under the Credit Limit and shall decrease, on a dollar-for-dollar basis, the amount available for other Advances. The form and substance of each Letter of Credit shall be subject to approval byLender, in its sole discretion. Each Letter of Credit shall be subject to the additional terms of the Letter of Credit agreements, applicationsand any related documents required by Lender in connection with the issuance thereof (each, a "Letter of Credit Agreement"). Each draftpaid under any Letter of Credit shall be repaid by Borrowers in accordance with the provisions of the applicable Letter of Credit Agreement.No Letter of Credit shall be issued that results in an Overadvance or while any Overadvance is outstanding. Upon the Maturity Date, theamount of Letters of Credit Obligations shall be secured by unencumbered cash on terms acceptable to Lender if the term of this Agreementis not extended by Lender. 1.9Cash Management Services. Borrowers may use availability hereunder up to the Cash Management Sublimit for Lender's cashmanagement services, which may include merchant services, direct deposit of payroll, business credit card, and check cashing servicesidentified in various cash management services agreements related to such services (the "Cash Management Services"). The entire CashManagement Sublimit will be treated as an Advance for purposes of determining availability under the Credit Limit and shall decrease, on adollar-for-dollar basis, the amount available for other Advances. The Cash Management Services shall be subject to additional terms setforth in applicable cash management services agreements. 1.10Foreign Exchange Facility. Any Borrower may enter in foreign exchange forward contracts with Lender under which such Borrowercommits to purchase from or sell to Lender a set amount of foreign currency more than one business day after the contract date (the "FXForward Contract"). The total FX Forward Contracts at any one time may not exceed 10 times the amount of the FX Sublimit. 10% of theamount of each outstanding FX Forward Contract shall be treated as an Advance for purposes of determining availability under the CreditLimit and shall decrease, on a dollar-for-dollar basis, the amount available for other Advances. Lender may terminate the FX ForwardContracts if an Event of Default occurs. Each FX Forward Contract shall be subject to additional terms set forth in the applicable FXForward Contract or other agreements executed in connection with the foreign exchange facility. 1.11Overadvances. Upon any occurrence of an Overadvance, Borrowers shall immediately pay down the Advances such that, after giving effectto such payments, no Overadvance exists. 2.FEES AND FINANCE CHARGES. 2.1Finance Charges. Lender may, but is not required to, deduct the amount of accrued Finance Charge from Collections received by Lender.The accrued and unpaid Finance Charge shall be due and payable within 10 calendar days after each Month End during the term hereof. -3- 2.2Fees. (a)Termination Fee. In the event this Agreement is terminated prior to the first anniversary of the date of this Agreement, Borrowersshall pay the Termination Fee to Lender, provided that such Termination Fee shall be waived in the event that Borrower refinanceswith Lender or Lender’s Affiliates; (b)Facility Fee. Borrowers shall pay the Facility Fee to Lender promptly upon the execution of this Agreement and annuallythereafter. Lender acknowledges receipt of a good faith deposit from Borrowers in the amount of $25,000 which shall be used tocover Lender’s diligence expenses incurred through the Closing Date with the remainder (if any) to be applied to the Facility Fee. (c)Letter of Credit Fees. Borrowers shall pay to Lender fees upon the issuance of each Letter of Credit, upon the payment ornegotiation of each draft under any Letter of Credit and upon the occurrence of any other activity with respect to any Letter ofCredit (including without limitation, the transfer, amendment or cancellation of any Letter of Credit) determined in accordancewith Lender's standard fees and charges then in effect for such activity. (d)Maintenance Fee. The accrued and unpaid Maintenance Fee shall be due and payable within 10 calendar days after each MonthEnd during the term hereof. (e)Cash Management and FX Forward Contract Fees. Borrowers shall pay to Lender fees in connection with the Cash ManagementServices and the FX Forward Contracts as determined in accordance with Lender’s standard fees and charges then in effect for suchactivity. (f)Due Diligence Fee. Borrowers shall pay the Due Diligence Fee to Lender promptly upon the execution of this Agreement and onthe first anniversary of this Agreement. 3.REPRESENTATIONS AND WARRANTIES. Each Borrower represents and warrants: 3.1No representation, warranty or other statement of Borrower in any certificate or written statement given to Lender contains any untruestatement of a material fact or omits to state a material fact necessary to make the statement contained in the certificates or statement notmisleading. 3.2Borrower is duly existing and in good standing in its state of formation and qualified and licensed to do business in, and in good standingin, any state in which the conduct of its business or its ownership of property requires that it be qualified. 3.3The execution, delivery and performance of this Agreement has been duly authorized, and does not conflict with Borrower’s organizationaldocuments, nor constitute an Event of Default under any material agreement by which Borrower is bound. Borrower is not in default underany agreement to which or by which it is bound. 3.4Borrower has good title to the Collateral and all inventory is in all material respects of good and marketable quality, free from materialdefects. 3.5Borrower’s name, form of organization, chief executive office, and the place where the records concerning all Receivables and Collateralare kept is set forth at the beginning of this Agreement, Borrower’s chief executive office is located at its address for notices set forth in thisAgreement. 3.6If Borrower owns, holds or has any interest in, any copyrights (whether registered, or unregistered), patents or trademarks, and licenses ofany of the foregoing, such interest has been specifically disclosed and identified to Lender in writing. 4.MISCELLANEOUS PROVISIONS. Each Borrower will: 4.1Maintain its corporate existence and good standing in its jurisdictions of incorporation and maintain its qualification in each jurisdictionnecessary to Borrower's business or operations and not merge or consolidate with or into any other business organization, or acquire all orsubstantially all of the capital stock or property of a third party, unless (i) any such acquired entity becomes a “borrower” under thisAgreement and (ii) Lender has previously consented to the applicable transaction in writing. 4.2Give Lender at least 30 days prior written notice of changes to its name, or state of organization, and 15 days’ prior written notice ofchanges to its chief executive office or location of records. 4.3Pay all its taxes including gross payroll, withholding and sales taxes when due and will deliver satisfactory evidence of payment to Lenderif requested, provided that Borrower need not make any payment if the amount or validity of such payment is contested in good faith byappropriate proceedings and is reserved against (to the extent required by generally accepted accounting principles) by Borrower, and, byreason of such contest or nonpayment, no property is subject to a risk of loss or forfeiture. -4- 4.4Maintain: (a)insurance satisfactory to Lender as to amount, nature and carrier covering property damage (including loss of use and occupancy)to any of Borrower's properties, business interruption insurance, public liability insurance including coverage for contractualliability, product liability and workers' compensation, and any other insurance which is usual for Borrower's business. Each suchpolicy shall provide for at least thirty (30) days prior notice to Lender of any cancellation thereof (other than cancellation due tonon-payment of premium, which shall require ten (10) days’ prior notice to Lender). (b)all risk property damage insurance policies (including without limitation windstorm coverage, and hurricane coverage asapplicable) covering the tangible property comprising the collateral. Each insurance policy must be for the full replacement cost ofthe collateral and include a replacement cost endorsement, or in an amount acceptable to Lender. The insurance must be issued byan insurance company acceptable to Lender and must include a lender's loss payable endorsement in favor of Lender in a formacceptable to Lender. Upon the request of Lender, Borrower shall deliver to Lender a copy of each insurance policy, or, if permitted by Lender, a certificate of insurance listing allinsurance in force. 4.5Immediately transfer and deliver to Lender all Collections Borrower receives. 4.6Not create, incur, assume, or be liable for any indebtedness, other than Permitted Indebtedness. 4.7Immediately notify Lender if Borrower hereafter obtains any interest in any copyrights. With delivery of each Compliance Certificate,notify Lender if Borrower hereafter obtains any interest in any patents, trademarks or licenses that are significant in value or are material tothe conduct of its business. 4.8Provide the following financial information and statements in form and content acceptable to Lender, and such additional information asrequested by Lender from time to time. Lender has the right to require Borrower to deliver financial information and statements to Lendermore frequently than otherwise provided below, and to use such additional information and statements to measure any applicable financialcovenants in this Agreement. (a)Within 120 days of the Borrower’s fiscal year end, the annual financial statements of Borrower, certified and dated by anauthorized financial officer. These financial statements must be audited (with an opinion satisfactory to Lender) by a CertifiedPublic Accountant acceptable to Lender. The statements shall be prepared on a consolidated basis. (b)No later than 30 days after the end of each Month End (including the last period in each fiscal year), monthly financial statementsof Borrower, certified and dated by an authorized financial officer. The statements shall be prepared on a consolidated, andconsolidating (if applicable), basis. (c)Promptly, upon sending or receipt, copies of any management letters and correspondence relating to management letters, sent orreceived by Borrower to or from Borrower's auditor. If no management letter is prepared, Borrower shall, upon Lender's request,obtain a letter from such auditor stating that no deficiencies were noted that would otherwise be addressed in a management letter. (d)If applicable, copies of the Form 10-K Annual Report, Form 10-Q Quarterly Report and Form 8-K Current Report for Borrowerconcurrent with the date of filing with the Securities and Exchange Commission. (e)Board-approved financial projections covering a time period acceptable to Lender and specifying the assumptions used in creatingthe projections. Board-approved annual projections shall in any case be provided to Lender no less than 30 days after thebeginning of each fiscal year. (f)Within 15 days of filing (including the filing of any request for an extension), copies of all business tax returns, which must beprepared by a Certified Public Accountant acceptable to Lender. (g)Within 30 days of each Month End, a Compliance Certificate of Borrower, signed by an authorized financial officer and settingforth (i) the information and computations (in sufficient detail) to establish compliance with all financial covenants at the end ofthe period covered by the financial statements then being furnished and (ii) whether there existed as of the date of such financialstatements and whether there exists as of the date of the certificate, any default under this Agreement and, if any such defaultexists, specifying the nature thereof and the action Borrower is taking and proposes to take with respect thereto. (h)Within 15 days after each Month End, a borrowing base certificate, in form and substance satisfactory to Lender, setting forthEligible Receivables and Receivable Amounts thereof and Eligible Inventory as of the last day of the preceding calendar month. -5- (i)Within 15 days after each Month End, a detailed aging of Borrower’s Receivables by invoice or a summary aging by accountdebtor, together with payable aging, inventory analysis, deferred revenue report, cash receipts journal, sales journal, and such othermatters as Lender may request. (j)Promptly upon Lender's request, such other books, records, statements, lists of property and accounts, budgets, forecasts or reportsas to Borrower and as to each guarantor of Borrower's obligations to Lender as Lender may reasonably request. (k)Notwithstanding the foregoing or anything to the contrary herein, documents required to be delivered pursuant to the term of thisAgreement (to the extent any such documents are included in materials otherwise filed with the SEC) may be deliveredelectronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower delivers to Lender afunctioning link to the public filing of such documents on the internet at Borrower’s website address. 4.9Maintain its depository, operating and investment accounts with Lender; provided that, for a period of time not to exceed 60 days after theClosing Date, Borrowers may maintain up to 10% of the aggregate amount of all their cash and cash equivalents in accounts with financialinstitutions other than Lender so long as (i) such accounts are closed and all funds therein transferred to Lender within 60 days of theClosing Date and (ii) any funds in excess of the 10% threshold set forth above deposited into Borrower’s accounts at other financialinstitutions are transferred to Borrower’s accounts with Lender within 2 business days of Borrower’s receipt of the same. 4.10Provide to Lender promptly upon the execution hereof, the following documents which shall be in form satisfactory to Lender: (i) copies ofall (x) property policies with a lender’s loss payable endorsement showing Lender as loss payee; and (y) liability policies withendorsements showing Lender as an additional insured, (ii) an insurance authorization letter duly executed by Chromadex, Inc. on behalf ofall Borrowers, (iii) resolutions to borrow duly executed by an Authorized Person of each Borrower, (iv) an intellectual property securityagreement duly executed by each Borrower, (v) a landlord’s waiver for each of the following leased locations: 10005 Muirlands Blvd.,Suite G, Irvine, CA 92618; 2830 Wilderness Place, Boulder, CO 80301; and 1751 South Fordham Street, Suite 350, Longmont, CO 80301;(vi) a bailee’s waiver from Westset Logistics for the location at 14041 Rosecrans Ave., La Mirada, CA 90638 and (vii) an audit ofBorrowers’ Receivables and inventory and any and all records pertaining to the Collateral, at Borrower’s expense. 4.11Promptly provide to Lender such additional information and documents regarding the finances, properties, business or books and records ofBorrower or any guarantor or any other obligor as Lender may request. 4.12Maintain Borrowers’ financial condition as follows in accordance with GAAP, subject to customary adjustments, and used consistently withprior practices (except to the extent modified by the definitions herein): (a)Quick Ratio, at all times, but tested at each Month End, not less than 0.8 to 1.0. (b)EBDAS (measured on a trailing 12 month basis) of at least 50% of the amount projected in Borrowers’ projections (approved byBorrowers’ board of directors) with respect to any fiscal quarter of Borrowers. (c)Revenue (measured on a trailing 12 month basis) of at least 50% of the sales projections approved by Borrower’s board of directorswith respect to any fiscal quarter of Borrowers. 4.13Not make or contract to make, without Lender’s prior written consent, capital expenditures, including leasehold improvements, in any fiscalyear in excess of $500,000 or incur liability for rentals of property (including both real and personal property) in an amount which, togetherwith capital expenditures, shall in any fiscal year exceed such sum. 5.SECURITY INTEREST. To secure the prompt payment and performance to Lender of all of the Obligations, each Borrower hereby grants to Lendera continuing security interest in the Collateral. No Borrower is authorized to sell, assign, transfer or otherwise convey any Collateral withoutLender’s prior written consent, except for the sale of finished inventory in Borrowers’ usual course of business and Permitted Transfers. EachBorrower agrees to sign any instruments and documents requested by Lender to evidence, perfect, or protect the interests of Lender in the Collateral.Each Borrower agrees to deliver to Lender, promptly upon Lender’s request, the originals of all instruments, chattel paper and documents evidencingor related to Receivables and Collateral. No Borrower shall grant or permit any lien or security in the Collateral or any interest therein other thanPermitted Liens. 6.POWER OF ATTORNEY. Each Borrower irrevocably appoints Lender and its successors as true and lawful attorney in fact, and authorizes Lender(a) to, whether or not there has been an Event of Default, (i) demand, collect, receive, sue, and give releases to any Account Debtor for the moniesdue or which may become due upon or with respect to the Receivables and to compromise, prosecute, or defend any action, claim, case orproceeding relating to the Receivables, including the filing of a claim or the voting of such claims in any bankruptcy case, all in Lender’s name orBorrower’s name, as Lender may choose; (ii) prepare, file and sign Borrower’s name on any notice, claim, assignment, demand, draft, or notice of orsatisfaction of lien or mechanics’ lien or similar document; (iii) notify all Account Debtors with respect to the Receivables to pay Lender directly;(iv) receive and open all mail addressed to Borrower for the purpose of collecting the Receivables; (v) endorse Borrower’s name on any checks orother forms of payment on the Receivables; (vi) execute on behalf of Borrower any and all instruments, documents, financing statements and the liketo perfect Lender’s interests in the Receivables and Collateral; (vii) debit any Borrower’s deposit accounts maintained with Lender for any and allObligations due under this Agreement; and (viii) do all acts and things necessary or expedient, in furtherance of any such purposes, and (b) to, uponthe occurrence and during the continuance of an Event of Default, sell, assign, transfer, pledge, compromise, or discharge the whole or any part of theReceivables. Upon the occurrence and continuation of an Event of Default, all of the power of attorney rights granted by Borrower to Lenderhereunder shall be applicable with respect to all Receivables and all Collateral. -6- 7.DEFAULT AND REMEDIES. 7.1Events of Default. The occurrence of any one or more of the following shall constitute an Event of Default hereunder. (a)Failure to Pay. Borrowers fail to make a payment when due under this Agreement. (b)Lien Priority. Lender fails to have an enforceable first lien (except for any prior liens to which Lender has consented in writingand for Permitted Liens which may pursuant to this Agreement or operation of law have priority over Lender’s liens) on or securityinterest in the Collateral. (c)False Information. Any Borrower (or any guarantor) has given Lender any materially false or misleading information orrepresentations or has failed to disclose any material fact relating to the subject matter of this Agreement as of the date made ordeemed made. (d)Bankruptcy. Any Borrower (or any guarantor) files a bankruptcy petition, a bankruptcy petition is filed against any Borrower (orany guarantor) or any Borrower (or any guarantor) makes a general assignment for the benefit of creditors, in each case that is notdismissed or stayed within 45 days (provided that no credit extensions will be made prior to the dismissal of such proceeding). (e)Receivers. A receiver or similar official is appointed for a substantial portion of any Borrower’s (or any guarantor’s) business, orthe business is terminated, that is not dismissed or stayed within 45 days (provided that no credit extensions will be made prior tothe dismissal of such proceeding). (f)Judgments. Any judgments or arbitration awards (not covered by Borrower’s insurance) are entered against any Borrower (or anyguarantor), or any Borrower (or any guarantor) enters into any settlement agreements with respect to any litigation or arbitrationand the amount of any such judgments, award or agreement exceeds $250,000. (g)Material Adverse Change. Means a material adverse change on (i) the business operations, condition (financial or otherwise) ofBorrowers and their subsidiaries taken as a whole or (ii) the ability of Borrowers to repay the Obligations or otherwise perform theirobligations hereunder or (iii) the value or priority of Lender’s security interests in the Collateral. (h)Cross-default. Any default occurs under any agreement in connection with any indebtedness any Borrower (or any guarantor) hasobtained from anyone other than Lender or which any Borrower (or any guarantor) has guaranteed resulting in a right by such thirdparty or parties, whether or not exercised, to accelerate the maturity of any indebtedness in an amount in excess of $250,000 (ineach case, other than trade amounts payable incurred in the ordinary course of business and not more than 90 days past due). (i)Default under Related Documents. Any default occurs (and is not cured within the cure period (if any) provided in such otheragreement) under any guaranty, subordination agreement, security agreement, deed of trust, mortgage, or other document requiredby or delivered in connection with this Agreement or any such document is no longer in effect unless terminated by writtenagreement of the parties. (j)Other Agreements. Any Borrower (or any guarantor) fails to meet the conditions of, or fails to perform any obligation under anyother agreement any Borrower (or any guarantor) has with Lender or any Affiliate of Lender and such failure is not cured within thecure period (if any) provided in such agreement. (k)Change of Control. A transaction, other than a bona fide equity financing or series of financings on terms and from investorsreasonably acceptable to Lender, occurs in which any “person” or “group” (within the meaning of Section 13(d) and 14(d)(2) ofthe Securities Exchange Act of 1934, as amended) becomes the “beneficial owner” (as defined in Rule 13d-3 under the SecuritiesExchange Act of 1934, as amended), directly or indirectly, of a sufficient number of shares of all classes of stock then outstandingof ChromaDex Corporation ordinarily entitled to vote in the election of directors, empowering such “person” or “group” to elect amajority of the Board of Directors of ChromaDex Corporation, who did not have such power before such transaction. (l)Other Breach Under Agreement. Any Borrower fails to meet the conditions of, or fails to perform any obligation under, any termof this Agreement not specifically referred to above and Borrower has failed to cure such default within 10 business days afterBorrower receives notice thereof or any officer of Borrower becomes aware thereof; provided, however, that if the default cannot byits nature be cured within the 10 business day period or cannot after diligent attempts by Borrower be cured within such 10business day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additionalreasonable period (which shall not in any case exceed 30 days) to attempt to cure such default, and within such reasonable timeperiod the failure to have cured such default shall not be deemed an Event of Default but no credit extensions will be madehereunder. 7.2Remedies. Upon the occurrence of an Event of Default, (1) without implying any obligation to do so, Lender may cease making Advancesor extending any other financial accommodations to Borrowers; (2) all or a portion of the Obligations shall be, at the option of and upondemand by Lender, or with respect to an Event of Default described in Section 7.1(e), automatically and without notice or demand, due andpayable in full; and (3) Lender shall have and may exercise all the rights and remedies under this Agreement and under applicable law,including the rights and remedies of a secured party under the UCC, all the power of attorney rights described in Section 6 with respect toall Collateral, and the right to collect, dispose of, sell, lease, use, and realize upon all Receivables and all Collateral in any commerciallyreasonable manner. -7- 8.ACCRUAL OF INTEREST. All interest and finance charges hereunder calculated at an annual rate shall be based on a year of 360 days, whichresults in a higher effective rate of interest than if a year of 365 or 366 days were used. Lender may charge interest, finance charges and fees basedupon the projected amounts thereof as of the due dates therefor, and adjust subsequent charges to account for the actual accrued amounts. If anyamount due under Section 2.2, amounts due under Section 9, and any other Obligations not otherwise bearing interest hereunder is not paid whendue, such amount shall bear interest at a per annum rate equal to the Finance Charge Percentage until the earlier of (i) payment in good funds or(ii) entry of a trial judgment thereof, at which time the principal amount of any money judgment remaining unsatisfied shall accrue interest at thehighest rate allowed by applicable law. 9.FEES, COSTS AND EXPENSES; INDEMNIFICATION. Borrowers will pay to Lender upon demand all fees, costs and expenses (including fees ofattorneys and professionals and their costs and expenses) that Lender incurs or may from time to time impose in connection with any of thefollowing: (a) preparing, negotiating, administering, and enforcing this Agreement or any other agreement executed in connection herewith,including any amendments, waivers or consents in connection with any of the foregoing, (b) any litigation or dispute (whether instituted by Lender,Borrowers or any other person) in any way relating to the Receivables, the Collateral, this Agreement or any other agreement executed in connectionherewith or therewith, (c) enforcing any rights against any Borrower or any guarantor, or any Account Debtor, (d) protecting or enforcing its interestin the Receivables or the Collateral, (e) collecting the Receivables and the Obligations, or (f) the representation of Lender in connection with anybankruptcy case or insolvency proceeding involving any Borrower, any Receivable, the Collateral, any Account Debtor, or any guarantor.Borrowers shall indemnify and hold Lender harmless from and against any and all claims, actions, damages, costs, expenses, and liabilities of anynature whatsoever arising in connection with any of the foregoing. 10.INTEGRATION, SEVERABILITY WAIVER, CHOICE OF LAW, FORUM AND VENUE. 10.1This Agreement and any related security or other agreements required by this Agreement, collectively: (a) represent the sum of theunderstandings and agreements between Lender and Borrowers concerning this credit; (b) replace any prior oral or written agreementsbetween Lender and Borrowers concerning this credit; and (c) are intended by Lender and Borrowers as the final, complete and exclusivestatement of the terms agreed to by them. In the event of any conflict between this Agreement and any other agreements required by thisAgreement, this Agreement will prevail. If any provision of this Agreement is deemed invalid by reason of law, this Agreement will beconstrued as not containing such provision and the remainder of the Agreement shall remain in full force and effect. Lender retains all of itsrights, even if it makes an Advance after a default. If Lender waives a default, it may enforce a later default. Any consent or waiver under, oramendment of, this Agreement must be in writing, and no such consent, waiver, or amendment shall imply any obligation by Lender tomake any subsequent consent, waiver, or amendment. 10.2THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS OF THESTATE OF CALIFORNIA. THE PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITHTHIS AGREEMENT OR ANY OTHER RELATED DOCUMENTS SHALL BE TRIED AND LITIGATED ONLY IN THE STATE ANDFEDERAL COURTS LOCATED IN THE COUNTY OF SANTA CLARA, CALIFORNIA. EACH PARTY HERETO WAIVES ANY RIGHT TOASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING ISBROUGHT IN ACCORDANCE WITH THIS SECTION AND STIPULATES THAT THE STATE AND FEDERAL COURTS LOCATED INTHE COUNTY OF SANTA CLARA, CALIFORNIA SHALL HAVE IN PERSONAM JURISDICTION AND VENUE OVER EACH SUCHPARTY FOR THE PURPOSE OF LITIGATING ANY SUCH DISPUTE, CONTROVERSY, OR PROCEEDING ARISING OUT OF ORRELATED TO THIS AGREEMENT, OR ANY OTHER RELATED DOCUMENTS. SERVICE OF PROCESS SUFFICIENT FOR PERSONALJURISDICTION IN ANY ACTION AGAINST ANY BORROWER MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURNRECEIPT REQUESTED, TO ITS ADDRESS SPECIFIED FOR NOTICES PURSUANT TO SECTION 11. 11.NOTICES; TELEPHONIC AND TELEFAX AUTHORIZATIONS. All notices shall be given to Lender and Borrowers at the addresses or faxes setforth on the signature page of this agreement and shall be deemed to have been delivered and received: (a) if mailed, three (3) calendar days afterdeposited in the United States mail, first class, postage pre-paid, (b) one (1) calendar day after deposit with an overnight mail or messenger service;or (c) on the same date of confirmed transmission if sent by hand delivery, telecopy, telefax or telex. Lender may honor telephone or telefaxinstructions for Advances or repayments given, or purported to be given, by any one of the Authorized Persons. Borrowers will indemnify and holdLender harmless from all liability, loss, and costs in connection with any act resulting from telephone or telefax instructions Lender reasonablybelieves are made by any Authorized Person. This paragraph will survive this Agreement's termination, and will benefit Lender and its officers,employees, and agents. 12.DEFINITIONS AND CONSTRUCTION. 12.1Definitions. In this Agreement: “Account Balance” means at any time the aggregate of the Advances outstanding as reflected on the records maintained by Lender,together with any past due Finance Charges thereon. “Account Debtor” has the meaning in the UCC and includes any person liable on any Receivable, including without limitation, anyguarantor of any Receivable and any issuer of a letter of credit or banker’s acceptance assuring payment thereof. -8- “Adjustments” means all discounts, allowances, disputes, offsets, defenses, rights of recoupment, rights of return, warranty claims, or shortpayments, asserted by or on behalf of any Account Debtor with respect to any Receivable. “Advance” means an advance made by Lender to a Borrower under this Agreement and any deemed Advances with respect to the FXSublimit, the Letter of Credit Sublimit and the Cash Management Sublimit. “Advance Rate” means (i) 80% in the case of the Eligible Receivables and (ii) 40% in the case of the Eligible Inventory, or, in either case,such greater or lesser percentage as Lender may from time to time establish in its good faith business discretion upon notice to Borrower. “Advance Request” means a writing in form and substance satisfactory to Lender and signed by an Authorized Person requesting anAdvance. “Agreement” means this Business Financing Agreement. "Affiliate" means, as to any person or entity, any other person or entity directly or indirectly controlling or controlled by, or under direct orindirect common control with, such person or entity. “Authorized Person” means any one of the individuals authorized to sign on behalf of a Borrower, and any other individual designated byany one of such authorized signers. “Borrowers’ Account” means CHROMADEX, INC.’s general operating account maintained with Lender, into which all Advances will bedeposited unless otherwise instructed by a Borrower in writing. "Borrowing Base" means at any time the sum of (i) the Eligible Receivable Amount multiplied by the applicable Advance Rate plus (ii)the lesser of (x) the value of Eligible Inventory multiplied by the applicable Advance Rate or (y) the Inventory Sublimit minus (iii) suchreserves as Lender may deem proper and necessary from time to time in Lender’s good faith business discretion, provided that lender shallprovide prior written notice to Borrowers of any such reserves or change in the reserve requirement. "Cash Management Sublimit" means $50,000. “Collateral” means all of each Borrower’s rights and interest in any and all personal property, whether now existing or hereafter acquired orcreated and wherever located, and all products and proceeds thereof and accessions thereto, including but not limited to the following(collectively, the “Collateral”): (a) all accounts (including health care insurance receivables), chattel paper (including tangible andelectronic chattel paper), inventory (including all goods held for sale or lease or to be furnished under a contract for service, and includingreturns and repossessions), equipment (including all accessions and additions thereto), instruments (including promissory notes),investment property (including securities and securities entitlements), documents (including negotiable documents), deposit accounts,letter of credit rights, money, any commercial tort claim of a Borrower which is now or hereafter identified by a Borrower or Lender, generalintangibles (including payment intangibles and software), goods (including fixtures) and all of each Borrower’s books and records withrespect to any of the foregoing, and the computers and equipment containing said books and records; and (b) any and all cash proceedsand/or noncash proceeds thereof, including without limitation, insurance proceeds, and all supporting obligations and the securitytherefore or for any right to payment. Notwithstanding the foregoing, the Collateral shall not include more than sixty-five percent (65.0%)of the presently existing and hereafter arising issued and outstanding shares of capital stock owned by any Borrower of any subsidiary notorganized under the laws of the United States or any state or territory thereof or the District of Columbia which shares entitle the holderthereof to vote for directors or any other matter. “Collection Account” means the deposit account maintained with Lender which, pursuant to the Lockbox Agreement, all Collectionsreceived in the Lockbox are to be deposited, and as to which Borrowers have no right to withdraw funds. “Collections” means all payments from or on behalf of an Account Debtor with respect to Receivables. “Compliance Certificate” means a certificate in the form attached as Exhibit A to this Agreement by an Authorized Person that, amongother things, the representations and warranties set forth in this Agreement are true and correct as of the date such certificate is delivered. “Credit Limit” means $5,000,000, which is intended to be the maximum principal amount of Advances at any time outstanding. “Default” means any Event of Default or any event that with notice, lapse of time or otherwise would constitute an Event of Default. “Due Diligence Fee” means a payment of an annual fee equal to $900 due upon the first anniversary of the date of this Agreement. "EBDAS" means earnings before depreciation, amortization and stock compensation. -9- "Eligible Inventory" means Inventory (which shall be valued at the lower of cost determined on an averagecost basis or forced liquidationvalue) and which satisfies the following requirements: (a)the Inventory is owned by a Borrower free of any title defects or any liens or interests of others except the security interest in favorof Lender; (b)the Inventory is held for sale or use in the ordinary course of Borrower's business and is of good and merchantable quality. Displayitems, raw materials, work-in-process, parts, samples, and packing and shipping materials are not eligible. Inventory which isobsolete, unsalable, damaged, defective, used, discontinued, perishable or slow-moving, or which has been returned by the buyer,is not eligible; (c)the Inventory is covered by insurance as required in Section 4.4 of this Agreement; (d)the Inventory has not been manufactured to the specifications of a particular Account Debtor; (e)the Inventory is not subject to any licensing agreements which would prohibit or restrict in any way the ability of Lender to sellthe Inventory (including its packaging) to third parties; (f)the Inventory has been produced in compliance with the requirements of the U.S. Fair Labor Standards Act (29 U.S.C. §§201 etseq.); (g)the Inventory is not on consignment; (h)the Inventory is not related to an "undesirable" industry, as determined by Lender from time to time in its sole discretion; (i)the Inventory is located United States at one of the addresses listed on the first page hereof, or at a location that has been disclosedto Lender in this Agreement, the Capital Finance Loan Application or otherwise, and such locations are the subject of an executedlandlord/bailee waiver in form acceptable to Lender; (j)Lender has received an audit on the Inventory satisfactory to Lender; and (k)the Inventory is otherwise acceptable to Lender. “Eligible Receivable” means a Receivable that satisfies all of the following: (a)The Receivable has been created by a Borrower in the ordinary course of such Borrower’s business and without any obligation onthe part of such Borrower to render any further performance. (b)There are no conditions which must be satisfied before a Borrower is entitled to receive payment of the Receivable, and theReceivable does not arise from COD sales, consignments or guaranteed sales. (c)The Account Debtor upon the Receivable does not claim any defense to payment of the Receivable, whether well founded orotherwise. (d)The Receivable is not the obligation of an Account Debtor who has asserted or may be reasonably be expected to assert anycounterclaims or offsets against any Borrower (including offsets for any “contra accounts” owed by any Borrower to the AccountDebtor for goods purchased by such Borrower or for services performed for any Borrower). (e)The Receivable represents a genuine obligation of the Account Debtor and to the extent any credit balances exist in favor of theAccount Debtor, such credit balances shall be deducted in calculating the Receivable Amount. (f)A Borrower has sent an invoice to the Account Debtor in the amount of the Receivable. (g)No Borrower is prohibited by the laws of the state where the Account Debtor is located from bringing an action in the courts of thatstate to enforce the Account Debtor’s obligation to pay the Receivable. The applicable Borrower has taken all appropriate actionsto ensure access to the courts of the state where Account Debtor is located, including, where necessary; the filing of a Notice ofBusiness Activities Report or other similar filing with the applicable state agency or the qualification by such Borrower as aforeign corporation authorized to transact business in such state. (h)The Receivable is owned by a Borrower free of any title defects or any liens or interests of others except the security interest infavor of Lender and Permitted Liens, and Lender has a perfected, first priority security interest in such Receivable. (i)The Account Debtor on the Receivable is not any of the following: (1) an employee, Affiliate, parent or subsidiary of a Borrower,or an entity which has common officers or directors with any Borrower; (2) the U.S. government or any agency or department of theU.S. government unless the applicable Borrowers complies with the procedures in the Federal Assignment of Claims Act of 1940(41 U.S.C. §15) with respect to the Receivable, and the underlying contract expressly provides that neither the U.S. governmentnor any agency or department thereof shall have the right of set-off against Borrowers and only then if the Receivable is deemedeligible by Lender in its sole discretion on a case-by-case basis; (3) any person or entity located in a foreign country (other thanCanada), unless approved in writing by Lender; or (4) an Account Debtor as to which 35% or more of the aggregate dollar amountof all outstanding Receivables owing from such Account Debtor have not been paid within 90 days from invoice date. -10- (j)The Receivable is not in default (a Receivable will be considered in default if any of the following occur: (i) the Receivable is notpaid within 90 days from its invoice date; (ii) the Account Debtor obligated upon the Receivable suspends business, makes ageneral assignment for the benefit of creditors, or fails to pay its debts generally as they come due; or (iii) any petition is filed by oragainst the Account Debtor obligated upon the Receivable under any bankruptcy law or any other law or laws for the relief ofdebtors). (k)The Receivable does not arise from the sale of goods which remain in any Borrower’s possession or under any Borrower’s control. (l)The Receivable is not evidenced by a promissory note or chattel paper, nor is the Account Debtor obligated to any Borrower underany other obligation which is evidenced by a promissory note. (m)the Receivable is not that portion of Receivables due from an Account Debtor which is in excess of the lesser of (i) 20% ofBorrowers’ aggregate dollar amount of all outstanding Receivables or (ii) $500,000 (except for Receivables owing from ArizonaNutritional Supplements, LLC as to which the foregoing amount shall be $1,000,000). (n)The Receivable does not constitute a retention billing. (o)The Receivable does not constitute a progress billing. (p)The Receivable is not owing from Elysium Health or its affiliates. (q)The Receivable is otherwise acceptable to Lender. "Eligible Receivable Amount" means at any time the sum of the Receivable Amounts of the Eligible Receivables. “Event of Default” has the meaning set forth in Section 7.1. “Facility Fee” means a payment of an annual fee equal to $25,000 due upon the date of this Agreement. “Finance Charge” means an interest amount equal to the Finance Charge Percentage of the ending daily Account Balance for the relevantperiod. “Finance Charge Percentage” means a floating rate per month equal to the Prime Rate plus 2.50 percentage points plus an additional 5.00percentage points during any period that an Event of Default has occurred and is continuing. "FX Sublimit" means $500,000, less any amounts outstanding under the Letter of Credit Sublimit. “GAAP” means generally accepted accounting principles consistently applied and used consistently with prior practices. "Inventory" means and includes all of Borrowers’ now owned or hereafter acquired goods, merchandise and other personal property,wherever located, to be furnished under any consignment, arrangement, contract of service or held for sale or lease, all raw materials, workin process, finished goods and materials and supplies of any kind, nature or description which are or might be used or consumed inBorrowers’ business or used in selling or furnishing such goods, merchandise and other personal property, and all documents of title orother documents representing them. "Inventory Sublimit" means $1,500,000. “Lender” means WESTERN ALLIANCE BANK, an Arizona corporation, and its successors and assigns. "Letter of Credit" has the meaning set forth in Section 1.8. "Letters of Credit Obligation" means, at any time, the sum of, without duplication, (i) the maximum amount available to be drawn on alloutstanding Letters of Credit issued by Lender or by Lender’s Affiliate and (ii) the aggregate amount of all amounts drawn andunreimbursed with respect to Letters of Credit issued by Lender or by Lender’s Affiliate. -11- "Letter of Credit Sublimit" means $500,000, less any amounts outstanding under the FX Sublimit. “Lockbox” is defined in the Lockbox Agreement. “Lockbox Agreement” is defined in Section 1.4(a). "Maintenance Fee" means the amount equal to 0.05 percentage points per month of the ending daily Account Balance for the relevantperiod. “Maturity Date” means two years from the date hereof or such earlier date as Lender shall have declared the Obligations immediately dueand payable pursuant to Section 7.2. “Month End” means the last day of each fiscal month of Borrower. “Obligations” means all liabilities and obligations of Borrowers to Lender of any kind or nature, present or future, arising under or inconnection with this Agreement or under any other document, instrument or agreement, whether or not evidenced by any note, guarantee orother instrument, whether arising on account or by overdraft, whether direct or indirect (including those acquired by assignment) absoluteor contingent, primary or secondary, due or to become due, now owing or hereafter arising, and however acquired; including, withoutlimitation, all Advances, Finance Charges, fees, interest, expenses, professional fees and attorneys’ fees. “Overadvance” means at any time an amount equal to the greater of (a) the amounts (if any) by which the total amount of the outstandingAdvances (including deemed Advances with respect to the FX Sublimit and the Letter of Credit Sublimit and the total amount of the CashManagement Sublimit) exceeds the lesser of the Credit Limit or the Borrowing Base or (b) the amounts (if any) by which the total amount ofthe outstanding deemed Advances with respect to the FX Sublimit, the Letter of Credit Sublimit or the Cash Management Sublimit) exceedsSubfacility Maximum. “Permitted Indebtedness” means: (a)Indebtedness under this Agreement or that is otherwise owed to Lender. (b)Indebtedness existing on the date hereof and specifically disclosed on a schedule to this Agreement. (c)Purchase money indebtedness (including capital leases) incurred to acquire capital assets in ordinary course of business and notexceeding $500,000 in total principal amount at any time outstanding. (d)Other indebtedness in an aggregate amount not to exceed $50,000 at any time outstanding; provided that such indebtedness isjunior in priority (if secured) to the Obligations and provided that the incurrence of such Indebtedness does not otherwise cause anEvent of Default hereunder. (e)Indebtedness incurred in the refinancing of any indebtedness set forth in (a) through (d) above, provided that the principal amountthereof is not increased or the terms thereof are not modified to impose more burdensome terms upon Borrowers. (f)Subordinated Debt. “Permitted Liens” means the following but only with respect to property not consisting of Receivables or Inventory: (a)Liens securing any of the indebtedness described in clauses (a) through (d) of the definition of Permitted Indebtedness. (b)Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith byappropriate proceedings, provided the same have no priority over any of Lender’s security interests. (c)Liens of carriers, warehousemen, suppliers, or other persons that are possessory in nature arising in the ordinary course of businessso long as such liens secure liabilities in the aggregate amount not to exceed Fifty Thousand Dollars ($50,000.00) and are notdelinquent or remain payable without penalty or are being contested in good faith and by appropriate proceedings whichproceedings have the effect of preventing the forfeiture or sale of the property subject thereto; provided the same have no priorityover any of Lender’s security interests. (d)Leases or subleases of real property granted in the ordinary course of Borrower’s business; (e)Non-exclusive licenses of Intellectual Property granted to third parties in the ordinary course of business; and licenses that couldnot result in a legal transfer of title of the licensed property but that may be exclusive in respects other than territory and that maybe exclusive as to territory only as to discrete geographical areas outside of the United States in the ordinary course of business. -12- (f)Liens incurred in connection with the extension, renewal or refinancing of the indebtedness described in clause (e) of thedefinition of Permitted Indebtedness, provided that any extension, renewal or replacement lien shall be limited to the propertyencumbered by the existing lien and the principal amount of the indebtedness being extended, renewed or refinanced does notincrease. (g)Liens securing Subordinated Debt. “Permitted Transfers” means the conveyance, sale, lease, transfer or disposition by Borrowers of: (a) Inventory in the ordinary course of business; (b) worn-out, surplus or obsolete Equipment; (d) Borrower’s use or transfer of money or cash in the ordinary course of its business in a manner that is notprohibited by the terms ofthis Agreement; and (e) other assets of Borrower that do not in the aggregate exceed $100,000 during any fiscal year. “Prime Rate” means the greater of (i) 3.50% per year or (ii) the Prime Rate published in the Money Rates section of the Western Edition ofThe Wall Street Journal, or such other rate of interest publicly announced by Lender as its Prime Rate. Any change in the Prime Rate shalltake effect at the opening of business on the day specified in the public announcement of a change in Lender’s Prime Rate. "Quick Ratio" means the aggregate of Borrowers’ unrestricted cash, cash equivalents and marketable securities at Lender plus receivablesconvertible into cash (net of uncollectable accounts and affiliate receivables) divided by total current liabilities including, but not limitedto all Obligations owing from Borrowers to Lender. “Receivable Amount” means as to any Receivable, the Receivable Amount due from the Account Debtor after deducting all discounts,credits, offsets, payments or other deductions of any nature whatsoever, whether or not claimed by the Account Debtor. “Receivables” means each Borrower’s rights to payment arising in the ordinary course of such Borrower’s business, including accounts,chattel paper, instruments, contract rights, documents, general intangibles, letters of credit, drafts, and bankers acceptances. "Subfacility Maximum" means $550,000. “Subordinated Debt” means indebtedness of any Borrower that is expressly subordinated to the indebtedness of such Borrower owed toLender pursuant to a subordination agreement satisfactory in form and substance to Lender. “Termination Fee” means a payment equal to 1.00% of the Credit Limit. “UCC” means the California Uniform Commercial Code, as amended or supplemented from time to time. 12.2Construction: (a)In this Agreement: (i) references to the plural include the singular and to the singular include the plural; (ii) references to anygender include any other gender; (iii) the terms “include” and “including” are not limiting; (iv) the term “or” has the inclusivemeaning represented by the phrase “and/or,” (v) unless otherwise specified, section and subsection references are to thisAgreement, and (vi) any reference to any statute, law, or regulation shall include all amendments thereto and revisions thereof. (b)Neither this Agreement nor any uncertainty or ambiguity herein shall be construed or resolved using any presumption againsteither Borrowers or Lender, whether under any rule of construction or otherwise. On the contrary, this Agreement has beenreviewed by each party hereto and their respective counsel. In case of any ambiguity or uncertainty, this Agreement shall beconstrued and interpreted according to the ordinary meaning of the words used to accomplish fairly the purposes and intentions ofall parties hereto. (c)Titles and section headings used in this Agreement are for convenience only and shall not be used in interpreting this Agreement. -13- 13.JURY TRIAL WAIVER. THE UNDERSIGNED ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL ONE, BUTTHAT IT MAY BE WAIVED UNDER CERTAIN CIRCUMSTANCES. TO THE EXTENT PERMITTED BY LAW, EACH PARTY, AFTERCONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER CHOICE, KNOWINGLY ANDVOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OFLITIGATION ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENTBETWEEN THE UNDERSIGNED PARTIES. 14.JUDICIAL REFERENCE PROVISION. 14.1In the event the Jury Trial Waiver set forth above is not enforceable, the parties elect to proceed under this Judicial Reference Provision. 14.2With the exception of the items specified in Section 14.3, below, any controversy, dispute or claim (each, a “Claim”) between the partiesarising out of or relating to this Agreement or any other document, instrument or agreement between the undersigned parties (collectivelyin this Section, the “Loan Documents”), will be resolved by a reference proceeding in California in accordance with the provisions ofSections 638 et seq. of the California Code of Civil Procedure (“CCP”), or their successor sections, which shall constitute the exclusiveremedy for the resolution of any Claim, including whether the Claim is subject to the reference proceeding. Except as otherwise provided inthe Loan Documents, venue for the reference proceeding will be in the state or federal court in the county or district where the real propertyinvolved in the action, if any, is located or in the state or federal court in the county or district where venue is otherwise appropriate underapplicable law (the “Court”). 14.3The matters that shall not be subject to a reference are the following: (i) nonjudicial foreclosure of any security interests in real or personalproperty, (ii) exercise of self-help remedies (including, without limitation, set-off), (iii) appointment of a receiver and (iv) temporary,provisional or ancillary remedies (including, without limitation, writs of attachment, writs of possession, temporary restraining orders orpreliminary injunctions). This reference provision does not limit the right of any party to exercise or oppose any of the rights and remediesdescribed in clauses (i) and (ii) or to seek or oppose from a court of competent jurisdiction any of the items described in clauses (iii) and(iv). The exercise of, or opposition to, any of those items does not waive the right of any party to a reference pursuant to this referenceprovision as provided herein. 14.4The referee shall be a retired judge or justice selected by mutual written agreement of the parties. If the parties do not agree within ten (10)days of a written request to do so by any party, then, upon request of any party, the referee shall be selected by the Presiding Judge of theCourt (or his or her representative). A request for appointment of a referee may be heard on an ex parte or expedited basis, and the partiesagree that irreparable harm would result if ex parte relief is not granted. Pursuant to CCP § 170.6, each party shall have one peremptorychallenge to the referee selected by the Presiding Judge of the Court (or his or her representative). 14.5The parties agree that time is of the essence in conducting the reference proceedings. Accordingly, the referee shall be requested, subject tochange in the time periods specified herein for good cause shown, to (i) set the matter for a status and trial-setting conference within fifteen(15) days after the date of selection of the referee, (ii) if practicable, try all issues of law or fact within one hundred twenty (120) days afterthe date of the conference and (iii) report a statement of decision within twenty (20) days after the matter has been submitted for decision. 14.6The referee will have power to expand or limit the amount and duration of discovery. The referee may set or extend discovery deadlines orcutoffs for good cause, including a party’s failure to provide requested discovery for any reason whatsoever. Unless otherwise ordered basedupon good cause shown, no party shall be entitled to “priority” in conducting discovery, depositions may be taken by either party uponseven (7) days written notice, and all other discovery shall be responded to within fifteen (15) days after service. All disputes relating todiscovery which cannot be resolved by the parties shall be submitted to the referee whose decision shall be final and binding. 14.7Except as expressly set forth herein, the referee shall determine the manner in which the reference proceeding is conducted including thetime and place of hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the referenceproceeding. All proceedings and hearings conducted before the referee, except for trial, shall be conducted without a court reporter, exceptthat when any party so requests, a court reporter will be used at any hearing conducted before the referee, and the referee will be provided acourtesy copy of the transcript. The party making such a request shall have the obligation to arrange for and pay the court reporter. Subjectto the referee’s power to award costs to the prevailing party, the parties will equally share the cost of the referee and the court reporter attrial. 14.8The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California.The rules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The refereeshall be empowered to enter equitable as well as legal relief, enter equitable orders that will be binding on the parties and rule on anymotion which would be authorized in a court proceeding, including without limitation motions for summary judgment or summaryadjudication. The referee shall issue a decision at the close of the reference proceeding which disposes of all claims of the parties that arethe subject of the reference. Pursuant to CCP § 644, such decision shall be entered by the Court as a judgment or an order in the samemanner as if the action had been tried by the Court and any such decision will be final, binding and conclusive. The parties reserve the rightto appeal from the final judgment or order or from any appealable decision or order entered by the referee. The parties reserve the right tofindings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a different judgment, whichnew trial, if granted, is also to be a reference proceeding under this provision. -14- 14.9If the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute betweenthe parties that would otherwise be determined by reference procedure will be resolved and determined by arbitration. The arbitration willbe conducted by a retired judge or justice, in accordance with the California Arbitration Act §1280 through §1294.2 of the CCP asamended from time to time. The limitations with respect to discovery set forth above shall apply to any such arbitration proceeding. 14.10THE PARTIES RECOGNIZE AND AGREE THAT ALL CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED UNDER THISREFERENCE PROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THEOPPORTUNITY TO CONSULT) WITH COUNSEL OF ITS, HIS OR HER OWN CHOICE, EACH PARTY KNOWINGLY ANDVOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALL PARTIES, AGREES THAT THIS REFERENCE PROVISION WILL APPLYTO ANY CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR AMONG THEM ARISING OUT OF OR IN ANY WAY RELATED TO,THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. 15.EXECUTION, EFFECTIVENESS, SURVIVAL. This Agreement may be executed in counterparts (and by different parties hereto in differentcounterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement andthe other documents executed in connection herewith constitute the entire contract among the parties relating to the subject matter hereof andsupersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Delivery of an executedcounterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.This Agreement shall become effective upon the execution and delivery hereof by Borrowers and Lender and shall continue in full force and effectuntil the Maturity Date or termination by Borrower pursuant to Section 18 and thereafter so long as any Obligations remain outstanding hereunder.Lender reserves the right to issue press releases, advertisements, and other promotional materials describing any successful outcome of servicesprovided on Borrowers’ behalf, provided that Borrower has the opportunity to review and approve any such items in advance. Each Borrower agreesthat Lender shall have the right to identify Borrower by name in those materials, provided that Borrower has the opportunity to review and approveany such items in advance. 16.OTHER AGREEMENTS. Any security agreements, liens and/or security interests securing payment of any obligations of any Borrower owing toLender or its Affiliates also secure the Obligations, and are valid and subsisting and are not adversely affected by execution of this Agreement. AnEvent of Default under this Agreement constitutes a default under other outstanding agreements between any Borrower and Lender or its Affiliates. 17.REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or payment of the Obligations by any Borrower or any guarantor, orthe transfer to Lender of any property should for any reason subsequently be asserted, or declared, to be void or voidable under any state or federallaw relating to creditors' rights, including provisions of the United States Bankruptcy Code relating to fraudulent conveyances, preferences, or othervoidable or recoverable payments of money or transfers of property (each, a "Voidable Transfer"), and if Lender is required to repay or restore, inwhole or in part, any such Voidable Transfer, or elects to do so upon the reasonable advice of its counsel, then, as to any such Voidable Transfer, orthe amount thereof that Lender is required or elects to repay or restore, and as to all reasonable costs, expenses, and reasonable attorneys' fees ofLender related thereto, the liability of Borrowers and such guarantor automatically shall be revived, reinstated, and restored and shall exist as thoughsuch Voidable Transfer had never been made. 18.TERM AND TERMINATION. Borrowers have the right to terminate this Agreement at any time upon no less than 30 days’ notice to Lender andpayment in full of the Obligations (other than inchoate indemnity obligations) including the Termination Fee (if applicable). Upon such notice andpayment in full of the Obligations (other than inchoate indemnity obligations), Lender agrees that (i) all guarantees granted to the Lender as aguarantee for such Obligations shall be automatically released and discharged, (ii) all of the right, title and interest (including security interests) ofthe Lender in and to all of the Collateral shall automatically be released, discharged and terminated, (iv) Lender shall execute and deliver toBorrowers any lien releases, mortgage releases, discharges of security interests, and other similar discharge or release documents (in recordable formif applicable) as are necessary to effectuate the termination and release of the security interests and liens securing the Obligations, (v) Lender shallreturn any promissory notes issued by Borrowers in connection with the credit extended under this Agreement, duly marked “paid in full” or“cancelled”, (vi) Lender shall return to Borrowers any physical Collateral delivered by Borrowers in connection herewith, and (vii) any Borrower orits designate shall be authorized to file termination statements with respect to all UCC financing statements filed by or for the benefit of the Lenderagainst Borrowers in respect of the Obligations. 19.PATRIOT ACT NOTIFICATION. Lender hereby notifies Borrowers that pursuant to the requirements of the USA Patriot Act, Title III of Pub. L.107-56, signed into law October 26, 2001 (“Patriot Act”), Lender is required to obtain, verify and record information that identifies Borrowers,which information includes the names and addresses of Borrowers and other information that will allow Lender to identify Borrowers in accordancewith the Patriot Act. 20.NOTICE OF FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS WRITTENAGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, (B) THERE ARE NO UNWRITTEN ORAL AGREEMENTSBETWEEN 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. [Balance of Page Intentionally Left Blank] -15- IN WITNESS WHEREOF, Borrowers and Lender have executed this Agreement on the day and year above written. BORROWERS: CHROMADEX CORPORATION, a Delaware corporation By /s/ Thomas C. Varvaro Name: Thomas C. Varvaro Title: Chief Financial Officer CHROMADEX, INC., a California corporation By /s/ Thomas C. Varvaro Name: Thomas C. Varvaro Title: Chief Financial Officer CHROMADEX ANALYTICS, INC., a Nevada corporation By /s/ Thomas C. Varvaro Name: Thomas C. Varvaro Title: Chief Financial Officer SPHERIX CONSULTING, INC., a Delaware corporation By /s/ Thomas C. Varvaro Name: Thomas C. Varvaro Title: Chief Financial Officer Address for Notices:CHROMADEX CORPORATION, on behalf of all Borrowers10005 Muirlands Blvd., Suite GIrvine, CA 92618Fax: 949-419-0294 Email: legal@chromadex.com Attn: Chief Financial Officer IN WITNESS WHEREOF, Borrowers and Lender have executed this Agreement on the day and year above written.LENDER: WESTERN ALLIANCE BANK, AN ARIZONA CORPORATION By /s/ Grant Simon Name: Grant Simon Title: Associate Vice President Address for Notices:WESTERN ALLIANCE BANK55 Almaden Blvd.San Jose, CA 95113Fax: (408) 423-8520Email: grant.simon@bridgebank.com Attn: -16- EXHIBIT A COMPLIANCE CERTIFICATE (see attached) A-1 COMPLIANCE CERTIFICATE TO: WESTERN ALLIANCE BANK, an Arizona corporation (the “Lender”) FROM: CHROMADEX CORPORATION, on behalf of all Borrowers The undersigned authorized officer of CHROMADEX CORPORATION hereby certifies on behalf of all Borrowers that in accordance with the termsand conditions of the Business Financing Agreement between Borrowers and Lender (the “Agreement”), (i) each Borrower is in complete compliance for theperiod ending _______________ with all required covenants except as noted below and (ii) all representations and warranties of each Borrower stated in theAgreement are true and correct as of the date hereof. Attached herewith are the required documents supporting the above certification. The Officer furthercertifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to thenext except as explained in an accompanying letter or footnotes. Please indicate compliance status by circling Yes/No under “Complies” column. Reporting CovenantRequiredComplies Consolidated monthly financial statements and Compliance CertificateWithin 30 days of the end of each calendar monthYesNo A/R & A/P Agings, Borrowing Base Certificate, Cash Receipts Journal,Sales Journal, Inventory Schedule and Deferred Revenue ScheduleMonthly within 15 days thereafterYesNo Consolidated annual financial statements (CPA audited)Within 120 days of each FYEYesNo 10K and 10Q reportsWithin 5 days of SEC filing dates (where applicable)YesNo A/R & Collateral AuditPrior to the initial Advance and annually thereafterYesNo Board approved operating projections (including income statements,balance sheets and cash flow statements)30 days after the beginning of each fiscal year YesNo Financial CovenantsRequiredActualComplies Quick Ratio (at all times, measured monthly)0.80 to 1.00 ______ to 1.00YesNo Performance to Plan (trailing 12 month, measured quarterly) RevenueAt least 50% of projections_____________YesNo EBDASAt least 50% of projections_____________YesNo Deposits Deposits held at Western Alliance Bank: $ Deposits held outside of Western Alliance Bank: $ Comments Regarding Exceptions: See Attached.BANK USE ONLY Received by: Sincerely,AUTHORIZED SIGNER CHROMADEX CORPORATION, on behalf of all BorrowersDate: Verified: SIGNATUREAUTHORIZED SIGNER Date: TITLE Compliance StatusYesNo DATE A-2 Schedules to Business Financing Agreement “Permitted Indebtedness” 1. ChromaDex, Inc. and ChromaDex Analytics, Inc. currently have following capital leases: Original AmountMaturityCurrent Balance(1)Monthly Payment(2)CollateralCreditor$38,151Oct, 2016$781$787Laboratory EquipmentQuantum Analytics$50,787Dec, 2016$3,106$1,051Phone SystemCIT Financial Services$18,996Nov, 2017$4,956$369Laboratory EquipmentThermo Fisher Finance$116,122Dec, 2017$34,118$2,422Laboratory EquipmentUS Bank$55,729June, 2018$21,776$1,160Laboratory EquipmentUS Bank$53,549Sep, 2018$23,902$1,076Laboratory EquipmentSusquehanna Commercial$76,615Sep, 2018$34,875$1,592Laboratory EquipmentM2 Lease Fund$222,629Mar, 2019$122,049$4,524Laboratory EquipmentQuantum Analytics$100,175Oct, 2019$66,406$2,031Laboratory EquipmentQuantum Analytics$303,933Jan, 2019$188,151$7,420Laboratory EquipmentQuantum Analytics$39,000 (3)Sep, 2019$39,000$1,250Laboratory EquipmentQuantum Analytics (1)Current balance is estimated as of September 15, 2016 and consists of principal only. (2)Monthly payment amounts include principal and interest. (3)A new capital lease entered into in Sep, 2016. This is an estimated amount. A-3 “Permitted Liens” ChromaDex, Inc. and ChromaDex Analytics, Inc. currently have following capital leases, and there are liens on the equipment being leased: Original AmountMaturityCurrent Balance(1)Monthly Payment(2)CollateralCreditor$38,151Oct, 2016$781$787Laboratory EquipmentQuantum Analytics$50,787Dec, 2016$3,106$1,051Phone SystemCIT Financial Services$18,996Nov, 2017$4,956$369Laboratory EquipmentThermo Fisher Finance$116,122Dec, 2017$34,118$2,422Laboratory EquipmentUS Bank$55,729June, 2018$21,776$1,160Laboratory EquipmentUS Bank$53,549Sep, 2018$23,902$1,076Laboratory EquipmentSusquehanna Commercial$76,615Sep, 2018$34,875$1,592Laboratory EquipmentM2 Lease Fund$222,629Mar, 2019$122,049$4,524Laboratory EquipmentQuantum Analytics$100,175Oct, 2019$66,406$2,031Laboratory EquipmentQuantum Analytics$303,933Jan, 2019$188,151$7,420Laboratory EquipmentQuantum Analytics$39,000 (3)Sep, 2019$39,000$1,250Laboratory EquipmentQuantum Analytics (1)Current balance is estimated as of September 15, 2016 and consists of principal only. (2)Monthly payment amounts include principal and interest. (3)A new capital lease entered into in Sep, 2016. This is an estimated amount. A-4 Exhibit 10.61 FIRST BUSINESS FINANCING MODIFICATION AGREEMENT This First Business Financing Modification Agreement (this “Agreement”) is entered into as of February 16, 2017, by and among CHROMADEXCORPORATION, a Delaware corporation, CHROMADEX, INC., a California corporation, CHROMADEX ANALYTICS, INC., a Nevada corporation, (each, a“Borrower” and collectively, “Borrowers”) and WESTERN ALLIANCE BANK, an Arizona corporation (“Lender”). 1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be owing by Borrowers to Lender, Borrowers are indebted toLender pursuant to, among other documents, a Business Financing Agreement, dated November 4, 2016, by and among Borrowers and Lender, as may beamended from time to time (the “Business Financing Agreement”). Capitalized terms used without definition herein shall have the meanings assigned tothem in the Business Financing Agreement. Hereinafter, all indebtedness owing by Borrowers to Lender under the Existing Documents (defined herein) shall be referred to as the “Indebtedness”and the Business Financing Agreement and any and all other documents executed by Borrowers in favor of Lender in connection therewith shall be referredto as the “Existing Documents.” 2. DESCRIPTION OF CHANGE IN TERMS. A. Modification to Business Financing Agreement and all Existing Documents: (i) The following defined term and its respective definition set forth in Section 12.1 of the Business Financing Agreement hereby isamended and restated in its entirety and replaced with the following: “Cash Management Sublimit” means $250,000. 3. MERGER OF SPHERIX CONSULTING. Bank hereby acknowledges that as of December 31, 2016, SPHERIX CONSULTING, INC., a Delaware corporationmerged into CHROMADEX, INC. with CHROMADEX, INC. as the surviving corporation. Accordingly, Spherix Consulting, Inc. hereby is removed as a“Borrower” under the Business Financing Agreement effective as of December 31, 2016. Bank hereby further acknowledges and agrees that no Event ofDefault occurred under the Existing Documents in connection with the foregoing merger transaction. 4. CONSISTENT CHANGES. The Existing Documents are each hereby amended wherever necessary to reflect the changes described above. 5. PAYMENT OF DOCUMENTATION FEE. Borrowers shall pay Lender all out-of-pocket expenses (including but not limited to legal fees and due diligencefees (if any)) incurred by Lender in connection with the execution of this Agreement. 6. NO DEFENSES OF BORROWERS/GENERAL RELEASE. Each Borrower agrees that, as of this date, it has no defenses against the obligations to pay anyamounts under the Indebtedness. Each Borrower (each, a “Releasing Party”) acknowledges that Lender would not enter into this Agreement withoutReleasing Party’s assurance that it has no claims against Lender or any of Lender’s officers, directors, employees or agents. Except for the obligations arisinghereafter under this Agreement, each Releasing Party releases Lender, and each of Lender’s and entity’s officers, directors and employees from any known orunknown claims that Releasing Party now has against Lender of any nature, including any claims that Releasing Party, its successors, counsel, and advisorsmay 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 anyother 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 DOES NOT KNOW OR SUSPECT TO EXISTIN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER, MUST HAVEMATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. The provisions, waivers and releases set forth in this section are binding upon each Releasing Party and its shareholders, agents, employees, assigns andsuccessors 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 thisAgreement and the Business Financing Agreement, and/or Lender’s actions to exercise any remedy available under the Business Financing Agreement orotherwise. -1- 7. CONTINUING VALIDITY. Borrowers understand and agree that in modifying the existing Indebtedness, Lender is relying upon Borrowers’representations, warranties, and agreements, as set forth in the Existing Documents. Except as expressly modified pursuant to this Agreement, the terms of theExisting Documents remain unchanged and in full force and effect. Lender’s agreement to modifications to the existing Indebtedness pursuant to thisAgreement in no way shall obligate Lender to make any future modifications to the Indebtedness. Nothing in this Agreement shall constitute a satisfaction ofthe Indebtedness. It is the intention of Lender and Borrowers to retain as liable parties all makers and endorsers of Existing Documents, unless the party isexpressly released by Lender in writing. No maker, endorser, or guarantor will be released by virtue of this Agreement except in accordance with the terms ofthis Agreement. The terms of this paragraph apply not only to this Agreement, but also to any subsequent Business Financing modification agreements. 8. REFERENCE PROVISION. A. In the event the Jury Trial waiver is not enforceable, the parties elect to proceed under this Judicial Reference Provision. B. With the exception of the items specified in Section 7(c) below, any controversy, dispute or claim (each, a “Claim”) between the parties arisingout of or relating to this Agreement or any other document, instrument or agreement between the undersigned parties (collectively in this Section, the “LoanDocuments”), will be resolved by a reference proceeding in California in accordance with the provisions of Sections 638 et seq. of the California Code ofCivil Procedure (“CCP”), or their successor sections, which shall constitute the exclusive remedy for the resolution of any Claim, including whether theClaim is subject to the reference proceeding. Except as otherwise provided in the Loan Documents, venue for the reference proceeding will be in the state orfederal court in the county or district where the real property involved in the action, if any, is located or in the state or federal court in the county or districtwhere venue is otherwise appropriate under applicable law (the “Court”). C. The matters that shall not be subject to a reference are the following: (i) nonjudicial foreclosure of any security interests in real or personalproperty, (ii) exercise of self-help remedies (including, without limitation, set-off), (iii) appointment of a receiver and (iv) temporary, provisional or ancillaryremedies (including, without limitation, writs of attachment, writs of possession, temporary restraining orders or preliminary injunctions). This referenceprovision does not limit the right of any party to exercise or oppose any of the rights and remedies described in clauses (i) and (ii) or to seek or oppose from acourt of competent jurisdiction any of the items described in clauses (iii) and (iv). The exercise of, or opposition to, any of those items does not waive theright of any party to a reference pursuant to this reference provision as provided herein. D. The referee shall be a retired judge or justice selected by mutual written agreement of the parties. If the parties do not agree within ten (10) days ofa written request to do so by any party, then, upon request of any party, the referee shall be selected by the Presiding Judge of the Court (or his or herrepresentative). A request for appointment of a referee may be heard on an ex parte or expedited basis, and the parties agree that irreparable harm would resultif ex parte relief is not granted. Pursuant to CCP § 170.6, each party shall have one peremptory challenge to the referee selected by the Presiding Judge of theCourt (or his or her representative). E. The parties agree that time is of the essence in conducting the reference proceedings. Accordingly, the referee shall be requested, subject tochange in the time periods specified herein for good cause shown, to (i) set the matter for a status and trial-setting conference within fifteen (15) days after thedate of selection of the referee, (ii) if practicable, try all issues of law or fact within one hundred twenty (120) days after the date of the conference and (iii)report a statement of decision within twenty (20) days after the matter has been submitted for decision. F. The referee will have power to expand or limit the amount and duration of discovery. The referee may set or extend discovery deadlines or cutoffsfor good cause, including a party’s failure to provide requested discovery for any reason whatsoever. Unless otherwise ordered based upon good cause shown,no party shall be entitled to “priority” in conducting discovery, depositions may be taken by either party upon seven (7) days written notice, and all otherdiscovery shall be responded to within fifteen (15) days after service. All disputes relating to discovery which cannot be resolved by the parties shall besubmitted to the referee whose decision shall be final and binding. G. Except as expressly set forth herein, the referee shall determine the manner in which the reference proceeding is conducted including the time andplace of hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding. Allproceedings and hearings conducted before the referee, except for trial, shall be conducted without a court reporter, except that when any party so requests, acourt reporter will be used at any hearing conducted before the referee, and the referee will be provided a courtesy copy of the transcript. The party makingsuch a request shall have the obligation to arrange for and pay the court reporter. Subject to the referee’s power to award costs to the prevailing party, theparties will equally share the cost of the referee and the court reporter at trial. -2- H. The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California. Therules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be empowered toenter equitable as well as legal relief, enter equitable orders that will be binding on the parties and rule on any motion which would be authorized in a courtproceeding, including without limitation motions for summary judgment or summary adjudication. The referee shall issue a decision at the close of thereference proceeding which disposes of all claims of the parties that are the subject of the reference. Pursuant to CCP § 644, such decision shall be entered bythe Court as a judgment or an order in the same manner as if the action had been tried by the Court and any such decision will be final, binding andconclusive. The parties reserve the right to appeal from the final judgment or order or from any appealable decision or order entered by the referee. The partiesreserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a different judgment, whichnew trial, if granted, is also to be a reference proceeding under this provision. I. If the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute between theparties that would otherwise be determined by reference procedure will be resolved and determined by arbitration. The arbitration will be conducted by aretired judge or justice, in accordance with the California Arbitration Act §1280 through §1294.2 of the CCP as amended from time to time. The limitationswith respect to discovery set forth above shall apply to any such arbitration proceeding. J. THE PARTIES RECOGNIZE AND AGREE THAT ALL CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED UNDER THIS REFERENCEPROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT)WITH COUNSEL OF ITS, HIS OR HER OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALLPARTIES, AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR AMONGTHEM ARISING OUT OF OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. 9. CONDITIONS. The effectiveness of this Agreement is conditioned upon payment of all expenses incurred by Lender in connection with the executionhereof. 10. NOTICE OF FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS WRITTENAGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, (B) THERE ARE NO UNWRITTEN ORAL AGREEMENTSBETWEEN 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. 11. COUNTERSIGNATURE. This Agreement shall become effective only when executed by Lender and Borrowers. -3- IN WITNESS WHEREOF, Borrowers and Lender have executed this Agreement on the date and year above written. BORROWERS: CHROMADEX CORPORATION, a Delaware corporation By: /s/Thomas C. Varvaro Name: Thomas C. Varvaro Title: CFO CHROMADEX, INC., a California corporation By: /s/Thomas C. Varvaro Name: Thomas C. Varvaro Title: CFO CHROMADEX ANALYTICS, INC., a Nevada corporation By: /s/Thomas C. Varvaro Name: Thomas C. Varvaro Title: CFO [Signatures continued on the next page] -4- IN WITNESS WHEREOF, Borrowers and Lender have executed this Agreement on the date and year above written. LENDER: WESTERN ALLIANCE BANK, an Arizona corporation By: /s/Grant Simon Name: Grant Simon Title: Associate Vice President -5- Exhibit 10.62 SECOND BUSINESS FINANCING MODIFICATION AGREEMENT This Second Business Financing Modification Agreement (this “Agreement”) is entered into as of March 12, 2017, by and among CHROMADEXCORPORATION, a Delaware corporation, CHROMADEX, INC., a California corporation, CHROMADEX ANALYTICS, INC., a Nevada corporation, (each, a“Borrower” and collectively, “Borrowers”) and WESTERN ALLIANCE BANK, an Arizona corporation (“Lender”). 1. DESCRIPTION OF EXISTING INDEBTEDNESS: Among other indebtedness which may be owing by Borrowers to Lender, Borrowers are indebted toLender pursuant to, among other documents, a Business Financing Agreement, dated November 4, 2016, by and among Borrowers and Lender, as may beamended from time to time, including by that certain First Business Financing Modification Agreement dated as of February 16, 2017 (the “BusinessFinancing Agreement”). Capitalized terms used without definition herein shall have the meanings assigned to them in the Business Financing Agreement. Hereinafter, all indebtedness owing by Borrowers to Lender under the Existing Documents (defined herein) shall be referred to as the “Indebtedness”and the Business Financing Agreement and any and all other documents executed by Borrowers in favor of Lender in connection therewith shall be referredto as the “Existing Documents.” 2. ACKNOWLEDGMENT OF DEFAULT. Borrower hereby acknowledges that it is currently in default under the Business Financing Agreement due toBorrower’s failure to maintain the minimum EBDAS as required by Section 4.12(b) of the Business Financing Agreement for the measuring period endedDecember 31, 2016 (the “Existing Default”). 3. WAIVER OF EXISTING DEFAULT. On the date of this Agreement, Lender hereby waives the Existing Default under Section 4.12(b). Nothing containedherein shall constitute or effect a continuing waiver or a course of conduct waiving these or any other provision of the Business Financing Agreement. 4. CONSENT TO ACQUISITION OF HEALTHSPAN. Notwithstanding anything in the Business Financing Agreement to the contrary, so long as (i)Healthspan (as defined below) is added as a Borrower under the Business Financing Agreement within thirty (30) days of the closing of the HealthspanAcquisition (as defined below), and (ii) the maximum amount of cash consideration paid by the Borrowers in connection with the Healthspan Acquisitiondoes not exceed $135,500, Lender hereby consents to Borrowers’ acquisition of Healthspan Research, LLC a Delaware limited liability company(“Healthspan”) on the terms and subject to the conditions set forth in that certain Membership Interest Purchase Agreement (the “Acquisition Agreement”) byand among ChromaDex Corporation, Robert N. Fried, Dr. Charles Brenner and Jeffrey Allen in substantially the form attached hereto as Exhibit A (the“Healthspan Acquisition”). Lender hereby further acknowledges and agrees that so long as the Acquisition Agreement is not materially altered between thedate of this Agreement and the closing of the Healthspan Acquisition, no Event of Default shall occur under the Existing Documents in connection with theHealthspan Acquisition; provided that it shall be an immediate and non-curable Event of Default under the Business Financing Agreement if Healthspan isnot joined as a Borrower to the Business Financing Agreement within thirty (30) days of the closing of the Healthspan Acquisition. 5. CONSISTENT CHANGES. The Existing Documents are each hereby amended wherever necessary to reflect the changes described above. 6. PAYMENT OF DOCUMENTATION FEE. Borrowers shall pay Lender all out-of-pocket expenses (including but not limited to legal fees and due diligencefees (if any)) incurred by Lender in connection with the execution of this Agreement. 7. NO DEFENSES OF BORROWERS/GENERAL RELEASE. Each Borrower agrees that, as of this date, it has no defenses against the obligations to pay anyamounts under the Indebtedness. Each Borrower (each, a “Releasing Party”) acknowledges that Lender would not enter into this Agreement withoutReleasing Party’s assurance that it has no claims against Lender or any of Lender’s officers, directors, employees or agents. Except for the obligations arisinghereafter under this Agreement, each Releasing Party releases Lender, and each of Lender’s and entity’s officers, directors and employees from any known orunknown claims that Releasing Party now has against Lender of any nature, including any claims that Releasing Party, its successors, counsel, and advisorsmay 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 anyother 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 DOES NOT KNOW OR SUSPECT TO EXISTIN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER, MUST HAVEMATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. The provisions, waivers and releases set forth in this section are binding upon each Releasing Party and its shareholders, agents, employees, assigns andsuccessors 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 thisAgreement and the Business Financing Agreement, and/or Lender’s actions to exercise any remedy available under the Business Financing Agreement orotherwise. -1- 8. CONTINUING VALIDITY. Borrowers understand and agree that in modifying the existing Indebtedness, Lender is relying upon Borrowers’representations, warranties, and agreements, as set forth in the Existing Documents. Except as expressly modified pursuant to this Agreement, the terms of theExisting Documents remain unchanged and in full force and effect. Lender’s agreement to modifications to the existing Indebtedness pursuant to thisAgreement in no way shall obligate Lender to make any future modifications to the Indebtedness. Nothing in this Agreement shall constitute a satisfaction ofthe Indebtedness. It is the intention of Lender and Borrowers to retain as liable parties all makers and endorsers of Existing Documents, unless the party isexpressly released by Lender in writing. No maker, endorser, or guarantor will be released by virtue of this Agreement except in accordance with the terms ofthis Agreement. The terms of this paragraph apply not only to this Agreement, but also to any subsequent Business Financing modification agreements. 9. REFERENCE PROVISION. A. In the event the Jury Trial waiver is not enforceable, the parties elect to proceed under this Judicial Reference Provision. B. With the exception of the items specified in Section 8(c) below, any controversy, dispute or claim (each, a “Claim”) between the parties arisingout of or relating to this Agreement or any other document, instrument or agreement between the undersigned parties (collectively in this Section, the “LoanDocuments”), will be resolved by a reference proceeding in California in accordance with the provisions of Sections 638 et seq. of the California Code ofCivil Procedure (“CCP”), or their successor sections, which shall constitute the exclusive remedy for the resolution of any Claim, including whether theClaim is subject to the reference proceeding. Except as otherwise provided in the Loan Documents, venue for the reference proceeding will be in the state orfederal court in the county or district where the real property involved in the action, if any, is located or in the state or federal court in the county or districtwhere venue is otherwise appropriate under applicable law (the “Court”). C. The matters that shall not be subject to a reference are the following: (i) nonjudicial foreclosure of any security interests in real or personalproperty, (ii) exercise of self-help remedies (including, without limitation, set-off), (iii) appointment of a receiver and (iv) temporary, provisional or ancillaryremedies (including, without limitation, writs of attachment, writs of possession, temporary restraining orders or preliminary injunctions). This referenceprovision does not limit the right of any party to exercise or oppose any of the rights and remedies described in clauses (i) and (ii) or to seek or oppose from acourt of competent jurisdiction any of the items described in clauses (iii) and (iv). The exercise of, or opposition to, any of those items does not waive theright of any party to a reference pursuant to this reference provision as provided herein. D. The referee shall be a retired judge or justice selected by mutual written agreement of the parties. If the parties do not agree within ten (10) days ofa written request to do so by any party, then, upon request of any party, the referee shall be selected by the Presiding Judge of the Court (or his or herrepresentative). A request for appointment of a referee may be heard on an ex parte or expedited basis, and the parties agree that irreparable harm would resultif ex parte relief is not granted. Pursuant to CCP § 170.6, each party shall have one peremptory challenge to the referee selected by the Presiding Judge of theCourt (or his or her representative). E. The parties agree that time is of the essence in conducting the reference proceedings. Accordingly, the referee shall be requested, subject tochange in the time periods specified herein for good cause shown, to (i) set the matter for a status and trial-setting conference within fifteen (15) days after thedate of selection of the referee, (ii) if practicable, try all issues of law or fact within one hundred twenty (120) days after the date of the conference and (iii)report a statement of decision within twenty (20) days after the matter has been submitted for decision. F. The referee will have power to expand or limit the amount and duration of discovery. The referee may set or extend discovery deadlines or cutoffsfor good cause, including a party’s failure to provide requested discovery for any reason whatsoever. Unless otherwise ordered based upon good cause shown,no party shall be entitled to “priority” in conducting discovery, depositions may be taken by either party upon seven (7) days written notice, and all otherdiscovery shall be responded to within fifteen (15) days after service. All disputes relating to discovery which cannot be resolved by the parties shall besubmitted to the referee whose decision shall be final and binding. G. Except as expressly set forth herein, the referee shall determine the manner in which the reference proceeding is conducted including the time andplace of hearings, the order of presentation of evidence, and all other questions that arise with respect to the course of the reference proceeding. Allproceedings and hearings conducted before the referee, except for trial, shall be conducted without a court reporter, except that when any party so requests, acourt reporter will be used at any hearing conducted before the referee, and the referee will be provided a courtesy copy of the transcript. The party makingsuch a request shall have the obligation to arrange for and pay the court reporter. Subject to the referee’s power to award costs to the prevailing party, theparties will equally share the cost of the referee and the court reporter at trial. -2- H. The referee shall be required to determine all issues in accordance with existing case law and the statutory laws of the State of California. Therules of evidence applicable to proceedings at law in the State of California will be applicable to the reference proceeding. The referee shall be empowered toenter equitable as well as legal relief, enter equitable orders that will be binding on the parties and rule on any motion which would be authorized in a courtproceeding, including without limitation motions for summary judgment or summary adjudication. The referee shall issue a decision at the close of thereference proceeding which disposes of all claims of the parties that are the subject of the reference. Pursuant to CCP § 644, such decision shall be entered bythe Court as a judgment or an order in the same manner as if the action had been tried by the Court and any such decision will be final, binding andconclusive. The parties reserve the right to appeal from the final judgment or order or from any appealable decision or order entered by the referee. The partiesreserve the right to findings of fact, conclusions of laws, a written statement of decision, and the right to move for a new trial or a different judgment, whichnew trial, if granted, is also to be a reference proceeding under this provision. I. If the enabling legislation which provides for appointment of a referee is repealed (and no successor statute is enacted), any dispute between theparties that would otherwise be determined by reference procedure will be resolved and determined by arbitration. The arbitration will be conducted by aretired judge or justice, in accordance with the California Arbitration Act §1280 through §1294.2 of the CCP as amended from time to time. The limitationswith respect to discovery set forth above shall apply to any such arbitration proceeding. J. THE PARTIES RECOGNIZE AND AGREE THAT ALL CONTROVERSIES, DISPUTES AND CLAIMS RESOLVED UNDER THIS REFERENCEPROVISION WILL BE DECIDED BY A REFEREE AND NOT BY A JURY. AFTER CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT)WITH COUNSEL OF ITS, HIS OR HER OWN CHOICE, EACH PARTY KNOWINGLY AND VOLUNTARILY, AND FOR THE MUTUAL BENEFIT OF ALLPARTIES, AGREES THAT THIS REFERENCE PROVISION WILL APPLY TO ANY CONTROVERSY, DISPUTE OR CLAIM BETWEEN OR AMONGTHEM ARISING OUT OF OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. 10. CONDITIONS. The effectiveness of this Agreement is conditioned upon Lender’s receipt of (i) updated Corporate Resolutions to Borrow from eachBorrower and (ii) payment of all expenses incurred by Lender in connection with the execution hereof. 11. NOTICE OF FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS WRITTENAGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES, (B) THERE ARE NO UNWRITTEN ORAL AGREEMENTSBETWEEN 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. 12. COUNTERSIGNATURE. This Agreement shall become effective only when executed by Lender and Borrowers. [Balance of Page Intentionally Left Blank] -3- IN WITNESS WHEREOF, Borrowers and Lender have executed this Agreement on the date and year above written. BORROWERS: CHROMADEX CORPORATION, a Delaware corporation By: /s/ Thomas C. Varvaro Name: Thomas C. Varvaro Title: Chief Financial Officer CHROMADEX, INC., a California corporation By: /s/ Thomas C. Varvaro Name: Thomas C. Varvaro Title: Chief Financial Officer CHROMADEX ANALYTICS, INC., a Nevada corporation By: /s/ Thomas C. Varvaro Name: Thomas C. Varvaro Title: Chief Financial Officer [Signatures continued on the next page] -4- IN WITNESS WHEREOF, Borrowers and Lender have executed this Agreement on the date and year above written. LENDER: WESTERN ALLIANCE BANK, an Arizona corporation By: /s/ Justin Vogel Name: Justin Vogel Title: Vice President  Exhibit A MEMBERSHIP INTEREST PURCHASE AGREEMENT Exhibit Omitted A-1 Exhibit 10.64 ChromaDex CorporationAmended and Restated Non-Employee Director Compensation PolicyAdopted: November 8, 2016Amended and Restated: November 16, 2016Effective Date: July 3, 2016 Each member of the Board of Directors (the “Board”) who is a member as of November 8, 2016 or thereafter and who is not also serving as an employee ofChromaDex Corporation (“ChromaDex”) or any of its subsidiaries (each such member, an “Eligible Director”) will receive the compensation described inthis Amended and Restated Non-Employee Director Compensation Policy (the “Director Compensation Policy”) for his or her Board service. The Director Compensation Policy may be amended at any time in the sole discretion of the Board or the Compensation Committee of the Board. Annual Cash Compensation Effective July 3, 2016, the annual cash compensation amount set forth below is payable in equal quarterly installments, payable in arrears in the weekfollowing the last day of each fiscal quarter in which the service occurred. If an Eligible Director joins the Board or a committee of the Board (“Committee”)at a time other than effective as of the first day of a fiscal quarter, each annual retainer set forth below will be pro-rated based on days served in the applicablefiscal year, with the pro-rated amount paid for the first fiscal quarter in which the Eligible Director provides the service, and regular full quarterly paymentsthereafter. All annual cash retainer fees are vested upon payment. 1. Annual Board Service Retainer:a. Eligible Directors other than the Chairman: $30,000b. Chairman: $60,000 2. Annual Committee Chair Service Retainer:a. Chairman of the Audit Committee: $20,000b. Chairman of the Compensation Committee: $15,000c. Chairman of the Nominating & Corporate Governance Committee: $10,000 3. Annual Committee Member Service Retainer:a. Non-Chairman Member of the Audit Committee: $10,000b. Non-Chairman Member of the Compensation Committee: $7,500c. Non-Chairman Member of the Nominating & Corporate Governance Committee: $5,000 Equity Compensation The equity compensation set forth below will be granted under ChromaDex’s Second Amended and Restated 2007 Equity Incentive Plan (the “Plan”), andwill be documented on the applicable form of equity award agreement most recently approved for use by the Board (or a duly authorized committee thereof)for Eligible Directors. All stock options granted under the Director Compensation Policy will be nonstatutory stock options, with an exercise price per shareequal to 100% of the Fair Market Value (as defined in the Plan) of the underlying Common Stock on the date of grant, and a term of ten years from the date ofgrant (subject to earlier termination in connection with a termination of service as provided in the Plan). 1. Initial Option Grant: Unless otherwise determined by the Board, on the date of the Eligible Director’s initial election or appointment to the Board(or, if such date is not a market trading day, the first market trading day thereafter), the Eligible Director automatically will be granted, withoutfurther action by the Board or Compensation Committee of the Board, a stock option to purchase 40,000 shares of Common Stock (subject toSection 11(a) of the Plan relating to Capitalization Adjustments (as defined in the Plan) after the adoption date of the Director Compensation Policy)(the “Initial Option Grant”). The Initial Option Grant will vest in a series of three substantially equal annual installments after the date of grant, suchthat the Initial Option Grant will be fully vested on the third anniversary of the date of grant, subject to the Eligible Director’s Continuous Service(as defined in the Plan) on each applicable vesting date. 2. Annual Option Grant: Unless otherwise determined by the Board, on the date of each ChromaDex annual stockholder meeting, each EligibleDirector automatically, and without further action by the Board or Compensation Committee of the Board, will be granted a stock option topurchase 20,000 shares of Common Stock (subject to Section 11(a) of the Plan relating to Capitalization Adjustments after the adoption date of theDirector Compensation Policy) (the “Annual Option Grant”). The Annual Option Grant will become fully vested on the first anniversary of the dateof grant, subject to the Eligible Director’s Continuous Service (as defined in the Plan) on that vesting date. For fiscal year 2016, the Annual OptionGrant will be granted on November 16, 2016 to each Eligible Director that has provided Continuous Service (as defined in the Plan) since July 3,2016. Expenses The Company will reimburse Eligible Directors for ordinary, necessary and reasonable out-of-pocket travel expenses to cover in-person attendance at andparticipation in Board and/or Committee meetings; provided, that Eligible Directors timely submit to the Company appropriate documentationsubstantiating such expenses in accordance with the Company’s travel and expense policy, as in effect from time to time. -1- Exhibit 10.65 CHROMADEX CORPORATION EXECUTIVE EMPLOYMENT AGREEMENT This Executive Employment Agreement (the “Agreement”) is entered into by and between ChromaDex Corporation, a Delaware corporation (the“Company”) and Robert Fried (the “Executive”), effective as of the Effective Date (as defined below). The Company and Executive are hereinaftercollectively referred to as the “Parties”, and individually referred to as a “Party”. Recitals Whereas, pursuant to that certain Member Interest Purchase Agreement (the “Purchase Agreement”), the Company will purchase one-hundredpercent (100%) of the membership interests of Healthspan Research, LLC, a Delaware limited liability company (“Healthspan”), not already owned by theCompany from Executive and the other members of Healthspan (the “Transaction”); Whereas, in connection with the Transaction, the Company desires to hire Executive as an employee to provide personal services to the Company,and wishes to provide Executive with certain compensation and benefits in return for his services; and Whereas, Executive desires to be employed by the Company and provide such services to the Company as an employee in return for certaincompensation and benefits; and Whereas, the effective date of this Agreement will be the Closing Date as defined in the Purchase Agreement (the “Effective Date”). Now, Therefore, in consideration of the mutual promises and covenants contained herein, it is hereby agreed by and between the Parties hereto asfollows: Agreement In consideration of the foregoing Recitals and the mutual promises and covenants herein contained, and for other good and valuable consideration,the Parties, intending to be legally bound, agree as follows: 1.Employment. 1.1 Title. Executive shall be employed as President and Chief Strategy Officer of the Company, subject to the terms and conditions set forthin this Agreement. Executive shall report to the Company’s Chief Executive Officer (the “CEO”). During the Term (as defined below), Executive will devotehis best efforts and his full business time and attention to the business of the Company and its subsidiaries, provided, however, that notwithstanding theforegoing the Executive shall be permitted to perform outside business, management of personal investments, and other activities, including withoutlimitation business activities in the film and entertainment industries and relating to the Hallmark Feeln streaming video service, to the extent that theperformance of such activities would not materially diminish, conflict with or negatively impact the performance of Services hereunder. 1.2 Term. The term of Executive’s employment with the Company shall commence on the Effective Date and remain in effect until thethird (3rd) anniversary of the Effective Date, or until such earlier date as it may be terminated by either Party pursuant to the terms of Section 5 herein (the“Initial Term”). Unless terminated earlier pursuant to Section 5, this Agreement shall automatically be renewed on the third anniversary of the Effective Dateand each one-year anniversary thereafter (each a “Renewal Date”) for an additional term of one year (each, a “Renewal Term” and together with the InitialTerm, the “Term”), unless terminated by either Party not less than sixty (60) days prior to the end of the Initial Term or any Renewal Term. Each RenewalTerm is subject to the termination provisions hereof. -1- 1.3 Duties. Executive will be the President and Chief Strategy Officer of the Company and shall perform the following services (the“Services”): coordinate raising equity and/or debt capital in an amount sufficient to enable Healthspan to scale its business development, marketing, andsales; oversight of the Company’s corporate strategy and the marketing, branding and distribution of nicotinamide riboside (“NR”) to the Direct-to-Consumer(“DTC”) market and such other distribution channels as the Company’s Board of Directors (the “Board”) or CEO may assign to Executive with Executive’sprior written consent; and such other duties as are reasonably assigned to Executive by the CEO. 1.4 Board Role. Following the Effective Date, Executive shall initially continue to serve as a director of the Company. Executive agrees topromptly resign as a director of the Company if properly terminated for Cause (as defined in Section 5.5.1 of this Agreement) pursuant to the terms of thisAgreement. On or prior to the Effective Date, Executive shall resign as a member of the Nominating and Corporate Governance Committee of the Board. 1.5 Policies and Practices. The employment relationship between the Parties shall be governed by this Agreement and by the policies andpractices established by the Company for all similarly situated executive officers. In the event that the terms of this Agreement differ from or are in conflictwith the Company’s policies or practices, this Agreement shall control. 1.6 Location and Travel. Executive’s principal place of business for performance of the Services shall be in Los Angeles, California,provided, however, that the Company may from time to time require Executive to travel temporarily to other locations (domestic and international) inconnection with the Company’s business including the Company’s executive offices in Irvine, California. In connection with travel other than travel from theLos Angeles area to and from the Company’s executive offices in Irvine, which will be covered by the immediately succeeding sentence, the Company shallreimburse Executive for all travel related expenses in accordance with Section 2.4 of this Agreement. In addition, the Company shall reimburse Executive atthe standard mileage rate as determined by the Internal Revenue Service for all miles driven in connection with travel from the Los Angeles area to and fromthe Company’s executive offices in Irvine, California pursuant to Section 2.4. 1.7 Documentation. The Company’s obligation to employ Executive pursuant to this Agreement is conditioned on documentation ofExecutive’s authorization to work in the United States. 2.Compensation and Benefits for Executive. 2.1 Base Salary. For services to be rendered hereunder, Executive shall receive an initial base salary at the rate of $300,000 per year (the“Base Salary”), less standard payroll deductions and withholdings and payable in accordance with the Company’s regular payroll schedule, but in no eventless frequently than monthly. The Base Salary may be subject to positive adjustments based on the Company’s and Executive’s performance, at the solediscretion of the Board. 2.2 Annual Bonus. Commencing in fiscal year 2017, Executive shall be eligible to earn an annual bonus as follows: 2.2.1 Executive shall be eligible to earn an annual bonus during each fiscal year that Executive remains employed by theCompany for the entire fiscal year in accordance with Section 2.2.2. In the case of fiscal year 2017, Executive will be eligible to earn an annual bonusprovided that Executive is employed by the Company from the Effective Date through the end of fiscal year 2017. Any such annual bonus earned shall bepaid, less standard payroll deductions and withholdings, on the same date(s) as annual bonuses are paid to other Company executives, but in no event shallthe annual bonus be paid later than March 15 of the fiscal year following the fiscal year for which the annual bonus is payable. Executive does not need to beemployed on the date of payment of the annual bonus in order to receive any bonus. -2- 2.2.2 For each fiscal year that Executive remains employed by the Company for the entire fiscal year (or for fiscal year 2017 asprovided in the second sentence of Section 2.2.1 above), the annual bonus shall equal: (a) 1% of DTC Net Sales for that fiscal year, as determined based onthe Company’s audited financial statements for that fiscal year; plus (b) an additional 2% of the DTC Net Sales for that fiscal year that exceed DTC Net Salesfor the prior fiscal year, as determined based on the Company’s audited financial statements for each such fiscal year (so, if DTC Net Sales for the currentfiscal year do not exceed DTC Net Sales for the prior fiscal year, there will be no bonus payable pursuant to this clause (b)) (the “NR Threshold”); plus (c) 1%of the Gross Profit of the Company and its subsidiaries derived from NR Ingredient Sales for that fiscal year that exceeds such Gross Profit for the prior fiscalyear, as determined based on the Company’s audited financial statements for each such fiscal year (so, if such Gross Profit for the current fiscal year does notexceed such Gross Profit for the prior fiscal year, there will be no bonus payable pursuant to this clause (c)). For purposes of this Agreement, “DTC Net Sales”means all DTC gross sales by Chromadex or any of its subsidiaries (including Healthspan) of products with NR as a lead ingredient (“Products”) less any (1)trade, quantity and cash discounts on Products actually provided to third parties in connection with arms-length transactions, (2) credits, allowances orrefunds, not to exceed the original invoice amount, for actual claims, damaged goods, rejections or returns of Products, (3) actual freight and insurance costsincurred in transporting Products to such customers, and (4) excise, sale, use, value added or other taxes. For purposes of this Agreement, “NR IngredientSales” means (A) sales by the Company and its subsidiaries of NR to producers of products (“Dietary Supplement Products”) labeled as “dietarysupplements” that include NR as an ingredient, are taken orally, and bear or contain a vitamin, a mineral, an herb or other botanical, an amino acid or adietary substance to supplement the product consumer’s diet, less any (1) trade, quantity and cash discounts on such sales actually provided to third parties inconnection with arms-length transactions, (2) credits, allowances or refunds, not to exceed the original invoice amount, for actual claims, damaged goods,rejections or returns of ingredient for such sales, (3) actual freight and insurance costs incurred in transporting ingredient to such customers, and (4) excise,sale, use, value added or other taxes, plus (B) amounts received by the Company and its subsidiaries from non-subsidiary entities in which the Company orany of its subsidiaries has a direct or indirect ownership, equity, or similar interest based on sales of NR by those non-subsidiary entities to producers ofDietary Supplement Products pursuant to contractual agreements between the Company or any of its subsidiaries and those non-subsidiary entities. Forpurposes of this Agreement, “Gross Profit” means NR Ingredient Sales less the applicable cost of goods sold. 2.2.3 For the purposes of this Agreement, and notwithstanding the foregoing, should Executive’s oversight responsibility beexpanded to a new distribution channel for or during any fiscal year, the initial NR Threshold for that new distribution channel for such fiscal year shall beequal to Net Sales to that distribution channel in such fiscal year, as determined based on the Company’s audited financial statements, and the NR Thresholdfor subsequent fiscal years for that distribution channel shall be the Net Sales to such distribution channel for the prior fiscal year, as determined based on theCompany’s audited financial statements. For purposes of this Agreement, “Net Sales” means all gross sales by the Company or any of its subsidiaries ofProducts or NR as an ingredient, as applicable, less any (1) trade, quantity and cash discounts on such Products or ingredient sales, as applicable, actuallyprovided to third parties in connection with arms-length transactions, (2) credits, allowances or refunds, not to exceed the original invoice amount, for actualclaims, damaged goods, rejections or returns of Products or ingredient, as applicable, (3) actual freight and insurance costs incurred in transporting Productsor ingredient, as applicable, to such customers, and (4) excise, sale, use, value added or other taxes. 2.3 Equity. 2.3.1 Stock Options. On the Effective Date, the Company will grant Executive options (incentive stock options, to the extent possiblepursuant to the terms of the Company’s Second Amended and Restated 2007 Equity Incentive Plan or any subsequent equityincentive plan (together, the “Plan”) and applicable law) (the “Options”) to purchase 500,000 shares of the Company’s commonstock for an exercise price equal to the fair market value on the date of the grant. The Options shall vest in equal monthlyinstallments over three years, subject to Executive’s Continuous Service (as defined in the Plan) on each such vesting date. -3- 2.3.2 Restricted Stock. 2.3.2.1 On the Effective Date, the Company will grant Executive 166,667 shares of restricted common stock ofthe Company, which shares shall vest in equal annual installments over three years, subject to Executive’s Continuous Service oneach vesting date. 2.3.2.2 Subject to requisite stockholder approval, on the one-year anniversary of the Effective Date, theCompany will grant Executive 166,667 shares of restricted common stock of the Company (subject to Executive’s ContinuousService as an employee or consultant of the Company or any of its subsidiaries through such grant date), which shares shall vest inequal annual installments over two years, subject to Executive’s Continuous Service on each vesting date. The Company will use itsreasonable efforts to obtain requisite stockholder approval of such grant. 2.3.2.3 Subject to requisite stockholder approval, on the two-year anniversary of the Effective Date, theCompany will grant Executive 166,666 shares of restricted common stock of the Company (subject to Executive’s ContinuousService as an employee or consultant of the Company or any of its subsidiaries through such grant date), which shares shall vestcompletely on the one year anniversary of such grant date, subject to Executive’s Continuous Service on such vesting date. TheCompany will use its reasonable efforts to obtain requisite stockholder approval of such grant. 2.3.3 Accelerated Vesting of Equity. Upon the occurrence of any of (a) a Change of Control (as defined in the Plan), (b) Executive’sdeath, (c) Executive’s Disability (as defined below), (d) termination by the Company of the Executive’s employment withoutCause or (e) resignation by the Executive of his employment for Good Reason, and subject in each case to the Executive’sContinuous Service as an employee or consultant of the Company or any of its subsidiaries through such event, all of theunvested Options and shares of such restricted stock granted pursuant to Sections 2.3.1, 2.3.2.1, 2.3.2.2 and 2.3.2.3, as applicable,will vest immediately. 2.3.4 Performance Stock. Subject to requisite stockholder approval, the Executive will be granted up to 500,000 fully-vested shares ofrestricted common stock of the Company, upon the achievement of and subject to the performance goals detailed on Exhibit A,subject to Executive’s Continuous Service as an employee or consultant of the Company or any of its subsidiaries on such grantdates. 2.3.5 Additional Equity. Executive shall be eligible for additional equity grants in amounts commensurate with Executive’s seniorlevel position with the Company, at the same times as equity is granted to other senior level executives of the Company, in thediscretion of the Board. 2.3.6 Tax Matters Related to Restricted Stock and Options. Withholding for any taxes which arise in connection with the Options orthe shares of restricted common stock of the Company granted to Executive pursuant to this Agreement shall be governed inaccordance with the applicable stock option agreement for the Options or restricted stock award agreement for such restrictedstock. 2.4 General Expense Reimbursements. The Company will promptly reimburse Executive for all reasonable business expenses Executiveincurs in performing Services hereunder pursuant to the Company’s usual expense reimbursement policies and practices, following submission by Executiveof reasonable documentation thereof. 2.5 Benefits. Executive shall, in accordance with Company policy and the terms and conditions of the applicable Company benefit plandocuments, be eligible for participation in and shall be covered by any and all medical, dental, life and other voluntary insurance plans, retirement and profitsharing plans, and such other benefits generally available to other employees of the Company in similar employment positions, on the same terms as suchemployees, subject to eligibility requirements. Any such benefits shall be subject to the terms and conditions of the governing benefit plans and policies andmay be changed by the Company in its discretion, provided, however, that any such benefit plan or policy change that materially and adversely affectsExecutive disproportionately and specifically compared to other similarly situated executives of the Company shall require the written consent of Executive.Executive shall be entitled to 4 weeks of vacation per calendar year. -4- 2.6 Directors and Officers Insurance. The Company shall procure directors and officers insurance with coverage of not less than $5million, and shall maintain such insurance in full force and effect during the Term of this Agreement and for a period of seven years thereafter. 3.Proprietary Information Obligations. 3.1 Proprietary Information Agreement. As a condition of employment, Executive agrees to execute and abide by the Company’s currentform of Employee Confidential Information and Invention Assignment Agreement (“Inventions Assignment Agreement”). 3.2 Third Party Agreements and Information. Executive hereby confirms that Executive’s employment by the Company does notand will not conflict with any prior agreement with any third party, and that Executive will perform the Services in a manner thatdoes not violate any such agreement. By entering into this Agreement, Executive represents that he has previously disclosed tothe Company any agreement that he has signed that may restrict his activities on behalf of the Company in any manner.Executive represents and warrants that, except as gained in connection with Healthspan, Executive does not possess confidentialor proprietary information arising out of prior employment, consulting, or other third party relationships, which would be used inconnection with Executive’s employment by the Company, except as expressly authorized by such third party. DuringExecutive’s employment by the Company, Executive will be expected not to make any unauthorized use or disclosure of anyinformation or materials, including trade secrets, of any former employer or other third party (excluding Healthspan). Executiveshall use, in the performance of the Services, only information generally known and used by persons with training andexperience comparable to his own, which is common knowledge in the industry or otherwise legally in the public domain, orwhich is otherwise provided or developed by the Company or obtained or developed by Executive on behalf of the Company. 4.Outside Activities During Employment. 4.1 Outside Activities. Executive agrees not to acquire, assume or participate in, directly or indirectly, any position, investment or interest known byhim to be adverse or antagonistic to the Company, its business or prospects, financial or otherwise during the Term of Executive’s employment withthe Company. Except with the prior written consent of the Board, Executive will not during the Term of this Agreement undertake or engage in anyother employment, occupation or business enterprise, provided, however, that notwithstanding the foregoing the Executive shall be permitted toperform outside business, management of personal investments, and other activities, including without limitation business activities in the film andentertainment industries and relating to the Hallmark Feeln streaming video service, to the extent that the performance of such activities would notmaterially diminish, conflict with or negatively impact the performance of Services hereunder. 4.2 Duty of Loyalty During Employment. During the Term of his employment with the Company, except on behalf of the Company or Healthspan,Executive will not directly or indirectly, whether as an officer, director, stockholder, partner, proprietor, associate, representative, employee,consultant, debtholder or in any capacity whatsoever engage in, become financially interested in, participate in, be employed by or have anybusiness connection with any other person, corporation, firm, partnership or other entity whatsoever which competes with the Company, anywherethroughout the world, in any line of business engaged in (or which the Company has publicly announced that it plans to be engaged in) by theCompany other than de minimis stock holdings in public companies. 5.At-Will Employment; Termination of Employment. 5.1 At-Will Employment. Executive’s employment relationship with the Company is employment at-will and may be terminated by theCompany or by Executive at any time and for any reason during the Term. At the time of termination, Executive will receive (a) all accrued base salary, andall accrued and unused paid time off, through the termination date, and (b) any annual bonus amount earned during the completed fiscal year preceding theyear in which Executive’s employment termination occurred, but not yet paid as of the termination date (the “Accrued Benefits”). -5- 5.2 Severance Benefits for Qualifying Termination. If, prior to the expiration of the Term of this Agreement, (a) Executive’s employmentis terminated by the Company without Cause, for death or Disability, or Executive resigns his employment for Good Reason, or (b) (i) a Change of Controloccurs and (ii) within one month prior to the date of such Change of Control or twelve months after the date of such Change in Control Executive’semployment is terminated by the Company other than for Cause, and (c) Executive satisfies the Release Requirement, then Executive will receive thefollowing “Severance Benefits” as set forth in this Section 5.2. 5.2.1 Severance Payments. Executive will receive severance pay in the form of continuation ofExecutive’s then-current base salary at the time of Executive’s termination for a period of twelve (12) months, less standard payroll deductions andwithholdings (the “Severance Payments”), to be paid on the Company’s regular payroll schedule in effect following Executive’s employment terminationdate; provided, however that the Company shall not be required to make any payments before the Release Effective Date. 5.2.2 Health Care Continuation Coverage Payments. If Executive timely elects continued coverage under COBRA, the Company willpay Executive’s COBRA premiums to continue Executive’s coverage (including coverage for Executive’s eligible dependents, ifapplicable) (“COBRA Premiums”) through the period starting on the employment termination date and ending twelve (12)months after the employment termination date (the “COBRA Premium Period”); provided, however, that the Company’sprovision of such COBRA Premium benefits will immediately cease if during the COBRA Premium Period Executive becomeseligible for group health insurance coverage through a new employer or Executive ceases to be eligible for COBRA continuationcoverage for any reason, including plan termination. In the event Executive becomes covered under another employer's grouphealth plan or otherwise ceases to be eligible for COBRA during the COBRA Premium Period, Executive must promptly notifythe Company of such event. Notwithstanding the foregoing, if the Company determines, in its sole discretion, that it cannot paythe COBRA Premiums without potentially incurring financial costs or penalties under applicable law (including, withoutlimitation, Section 2716 of the Public Health Service Act), regardless of whether Executive or Executive’s dependents elect or areeligible for COBRA coverage, the Company instead shall pay to Executive, on the first day of each calendar month following thetermination date, a fully taxable cash payment equal to the applicable COBRA premiums for that month (including the amount ofCOBRA premiums for Executive’s eligible dependents), subject to applicable tax withholdings (such amount, the “Special CashPayment”), for the remainder of the COBRA Premium Period. Executive may, but is not obligated to, use such Special CashPayments toward the cost of COBRA premiums. 5.2.3 Prorated Bonus. Executive will receive the prorated portion of Executive’s annual bonus, less standard payroll deductions andwithholdings, earned for the fiscal year in which such termination or resignation occurs. Such bonus amount shall be calculatedpursuant to Section 2.2 and prorated for the number of days Executive worked during such fiscal year, and paid at the same timeas annual bonuses for such fiscal year are paid to other senior executives of the Company, but in no event shall the annual bonusbe paid later than March 15 of the fiscal year following the fiscal year for which the annual bonus is payable. 5.2.4 Extended Exercise Period for Stock Options. With respect to any stock option grants, including the Options, that are awarded toExecutive on or after the Effective Date, such equity awards shall, to the extent vested as of the employment termination date,remain exercisable until the earlier of: (a) twelve (12) months following Executive’s employment termination date (or, suchlonger period as provided in the Plan in the event of Executive’s death), (b) the expiration of such awards’ original maximumterm, or (c) termination of such equity awards under the terms of the Company’s equity plan in connection with a dissolution orliquidation of the Company, a Corporate Transaction or a Change of Control (as such terms are defined in the Plan). 5.3 Release Requirement. To be eligible for the Severance Benefits pursuant to Section 5.2 above, Executive must satisfy thefollowing release requirement (the “Release Requirement”): return to the Company a signed and dated general release of allknown and unknown claims in a termination agreement acceptable to the Company (the “Release”) within the applicabledeadline set forth therein, but in no event later than forty-five (45) calendar days following Executive’s employment terminationdate, 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 paid hereunder prior to such Release Effective Date. -6- 5.4 Unvested Equity. Except to the extent set forth in Section 2.3.3, at the time of termination of Executive’s Continuous Service, allunvested equity (whether options, restricted stock or otherwise) will lapse and become forfeited by Executive. 5.5 Definitions. 5.5.1 Cause. For the purposes of this Agreement, “Cause” means the occurrence of any one or more of the following: (a) Executive’sconviction of or plea of guilty or nolo contendere to any felony (other than traffic violations); (b) Executive’s consistent failureor refusal to follow lawful and reasonable written instructions of the CEO or lawful and reasonable policies and regulations of theCompany or its affiliates; (c) Executive’s consistent failure to faithfully and diligently perform material assigned duties ofExecutive’s employment with the Company or its affiliates that is substantially detrimental to the business or reputation of theCompany; (d) fraudulent conduct by Executive in connection with the performance of Executive's duties for the Company or itsaffiliates; (e) conduct by Executive that materially discredits or that causes material harm to the Company or any affiliate or thatis materially detrimental to the reputation, character and standing of the Company or any affiliate; or (f) Executive’s materialbreach of this Agreement, the Inventions Assignment Agreement, or any applicable Company policies. An event described inclauses (b) through (f) shall not be treated as “Cause” until after Executive has been given written notice of such event, failure,conduct or breach, with specific details supporting such a determination, and Executive fails to cure such event, failure, conductor breach within 30 days from such written notice; provided, however, that such 30-day cure period shall not be required if theevent, failure, conduct or breach is incapable of being cured. 5.5.2 Change of Control. For the purposes of this Agreement, “Change of Control” shall have the meaning described in the Plan. 5.5.3 Disability. For purposes of this Agreement, “Disability” means that Executive is unable to perform the essential functions of hisposition (notwithstanding the provision of any reasonable accommodation) by reason of any medically determinable physical ormental impairment which has lasted or can reasonably be expected to last for a period of ninety (90) or more consecutive days orone hundred and twenty (120) days during any consecutive six (6) month period, as determined by a physician to be selected bythe Company in good faith and reasonably acceptable to Executive. 5.5.4 Good Reason. For purposes of this Agreement, Executive shall have “Good Reason” for resignation from employment with theCompany if any of the following actions are taken by the Company without Executive’s prior written consent: (a) a materialreduction in Executive’s Base Salary, unless pursuant to a salary reduction program applicable generally to the Company’s seniorexecutives; (b) a material reduction in Executive’s duties (including responsibilities and/or authorities) or reporting structure,provided, however, that a change in job position (including a change in title) shall not be deemed a “material reduction” in and ofitself unless Executive’s new duties are materially reduced from the prior duties; or (c) relocation of Executive’s principal place ofemployment to a place that increases Executive’s one-way commute by more than thirty (30) miles as compared to Executive’sthen-current principal place of employment immediately prior to such relocation, unless Executive requests or agrees in writing tosuch relocation. An event described in clauses (a) through (c) shall not be treated as “Good Reason” until after the Company hasbeen given written notice of such event, failure, conduct, or breach, with specific details supporting such a determination, theCompany fails to cure such event, failure, conduct, or breach within 30 days from such written notice (unless such event, failure,conduct, or breach is incapable of being cured, in which case the 30-day cure period shall not be required), and the Executiveresigns from all positions Executive then holds with the Company not later than 30 days after the expiration of the cure period (or30 days from the date of the Executive’s notice if the applicable event, failure, conduct or breach is incapable of being cured). 5.6 Termination for Cause or Resignation Without Good Reason. Except for Accrued Benefits and any other benefits required byapplicable law, Executive will not be eligible for, or entitled to any severance benefits, including (without limitation) theSeverance Benefits listed in Section 5.2, if the Company terminates Executive’s employment for Cause or Executive resignsExecutive’s employment without Good Reason at any time. Similarly, Executive will not be eligible for any severance benefits ifthe Executive’s employment is terminated as the result of the expiration of the Term. In addition, if Executive materiallybreaches any continuing obligations to the Company or its affiliates (including but not limited to any material breach of thisAgreement, any material breach of the Inventions Assignment Agreement, or material breach of Section 5.4(a) or Section 5.4(b)of the Purchase Agreement) during the period of time that Executive is receiving any Severance Benefits, Executive will forfeitExecutive’s entitlement to any then unpaid Severance Benefits, and the Company’s obligation to continue to pay or providesuch Severance Benefits will immediately terminate as of the date of Executive’s material breach. -7- 6.Section 409A. All payments provided hereunder are intended to constitute separate payments for purposes of Treasury Regulation Section 1.409A-2(b)(2). If the Company determines that any benefits provided under this Agreement constitute “deferred compensation” under Section 409Aof the Internal Revenue Code of 1986 as amended (“Section 409A”), such benefits will not commence in connection with Executive’stermination of employment unless such termination also qualifies as a “separation from service” with the Company within the meaning ofTreasury Regulation Section 1.409A-1(h) (without regard to any permissible alternative definition thereunder) (“Separation fromService”). If the Company determines that any benefits provided under this Agreement constitute “deferred compensation” under Section409A and Executive is a “specified employee” of the Company or any affiliate thereof (or any successor entity thereto) within themeaning of Section 409A(a)(2)(B)(i) of the Code on the date of the Separation from Service, then the payment of any such benefits shallbe delayed until the earlier of: (a) the date that is six (6) months and one (1) day after the date of Executive’s Separation from Service, or(b) the date of Executive’s death (such date, the “Delayed Payment Date”), and the Company (or the successor entity thereto, asapplicable) shall (i) pay to Executive a lump sum amount equal to the sum of the benefit payments that otherwise would have been paidto Executive on or before the Delayed Payment Date, without any adjustment on account of such delay, and (ii) continue the benefitpayments in accordance with any applicable payment schedules set forth for the balance of the period specified herein. In addition to theabove, to the extent required to comply with Section 409A and the applicable regulations and guidance issued thereunder, if theapplicable deadline for Executive to execute (and not revoke) the applicable Release spans two calendar years, Executive’s SeveranceBenefits shall commence to be paid in installments on the first regularly scheduled payroll date that occurs in the second calendar year.To the extent that any reimbursement, fringe benefit or other similar plan or arrangement in which the Executive participates during theterm of Executive’s employment under this Agreement or thereafter provides for a “deferral of compensation” within the meaning ofSection 409A of the Code, (i) the amount eligible for reimbursement or payment under such plan or arrangement in one calendar yearmay not affect the amount eligible for reimbursement or payment in any other calendar year (except that a plan providing medical orhealth benefits may impose a generally applicable limit on the amount that may be reimbursed or paid), and (ii) subject to any shortertime periods provided herein or the applicable plans or arrangements, any reimbursement or payment of an expense under such plan orarrangement must be made on or before the last day of the calendar year following the calendar year in which the expense was incurred. 7.Section 280G; Limitations on Payment 7.1 If any payment or benefit Executive will or may receive from the Company or otherwise (a “280G Payment”) would(a) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (b) but for this sentence, be subject tothe excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then any such 280G Payment provided pursuant to thisAgreement (a “Payment”) shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portionof the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (y) the largestportion, 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 (allcomputed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the greater economicbenefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in a Payment isrequired pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the precedingsentence, the reduction shall occur in the manner (the “Reduction Method”) that results in the greatest economic benefit forExecutive. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reducedpro rata (the “Pro Rata Reduction Method”). -8- 7.2 Notwithstanding any provision of Section 7.1 to the contrary, if the Reduction Method or the Pro Rata Reduction Method wouldresult in any portion of the Payment being subject to taxes pursuant to Section 409A that would not otherwise be subject to taxespursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall bemodified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (A) as a first priority, the modification shallpreserve to the greatest extent possible, the greatest economic benefit for Executive as determined on an after-tax basis; (B) as asecond priority, Payments that are contingent on future events (e.g., being terminated without Cause), shall be reduced (oreliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are “deferredcompensation” within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferredcompensation within the meaning of Section 409A. 7.3 Unless Executive and the Company agree on an alternative accounting firm or law firm, the accounting firm engaged by theCompany for general tax compliance purposes as of the day prior to the effective date of the Change of Control transaction shallperform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for theindividual, entity or group effecting the Change of Control transaction, the Company shall appoint a nationally recognizedaccounting or law firm to make the determinations required by this Section 7. The Company shall bear all expenses with respectto the determinations by such accounting or law firm required to be made hereunder. The Company shall use commerciallyreasonable 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 dateon which Executive’s right to a 280G Payment becomes reasonably likely to occur (if requested at that time by Executive or theCompany) or such other time as requested by Executive or the Company. 7.4 If Executive receives a Payment for which the Reduced Amount was determined pursuant to clause (x) of Section 7.1 and theInternal Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, Executive agreesto promptly return to the Company a sufficient amount of the Payment (after reduction pursuant to clause (x) of Section 7.1) sothat no portion of the remaining Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount wasdetermined pursuant to clause (y) of Section 7.1, Executive shall have no obligation to return any portion of the Paymentpursuant to the preceding sentence. 8.Assignment and Binding Effect. This Agreement shall be binding upon and inure to the benefit of Executive and Executive’s heirs, executors, personal representatives,assigns, administrators and legal representatives. Because of the unique and personal nature of Executive’s duties under this Agreement, neither thisAgreement nor any rights or obligations under this Agreement shall be assignable by Executive. This Agreement shall be binding upon and inure to thebenefit of the Company and its successors, assigns and legal representatives. Any such successor or assign of the Company will be deemed substituted for theCompany under the terms of this Agreement for all purposes. For this purpose, “successor” means any person, firm, corporation or other business entity whichat any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company. 9.Choice of Law. This Agreement shall be construed and interpreted in accordance with the internal laws of the State of California without regard to itsconflict of laws principles. 10.Integration. This Agreement, including Exhibit A and each document referred to or described herein, the Purchase Agreement, with respect to Section5.4(a) and Section 5.4(b) therein only, the Inventions Assignment Agreement, and the Indemnification Agreement contain the complete, final and exclusiveagreement of the Parties relating to the terms and conditions of Executive’s employment and the termination of Executive’s employment, and supersede allprior and contemporaneous oral and written employment agreements or arrangements between the Parties. -9- 11.Amendment. This Agreement cannot be amended or modified except by a written agreement signed by Executive and the Company. 12.Waiver. No term, covenant or condition of this Agreement or any breach thereof shall be deemed waived, except with the written consent of theParty against whom the wavier is claimed, and any waiver or any such term, covenant, condition or breach shall not be deemed to be a waiver of anypreceding or succeeding breach of the same or any other term, covenant, condition or breach. 13.Severability. The finding by a court of competent jurisdiction of the unenforceability, invalidity or illegality of any provision of this Agreement shallnot render any other provision of this Agreement unenforceable, invalid or illegal. Such court shall have the authority to modify or replace the invalid orunenforceable term or provision with a valid and enforceable term or provision, which most accurately represents the Parties’ intention with respect to theinvalid or unenforceable term, or provision. 14.Interpretation; Construction. The headings set forth in this Agreement are for convenience of reference only and shall not be used in interpreting this Agreement. ThisAgreement has been drafted by legal counsel representing the Company, but the Executive has been encouraged to consult with, and has consulted with,Executive’s own independent counsel and tax advisors with respect to the terms of this Agreement. The Parties acknowledge that each Party and its counselhas reviewed and revised, or had an opportunity to review and revise, this Agreement, and any rule of construction to the effect that any ambiguities are to beresolved against the drafting party shall not be employed in the interpretation of this Agreement. 15.Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed an original, all of which together shall contribute oneand the same instrument. 16.Notices. Any and all notices, demands, requests, or other communications hereunder shall be in writing and shall be deemed duly given whenpersonally delivered to or transmitted by overnight express delivery to and received by the Party to whom such notice is intended thereof, or in lieu of suchpersonal delivery or overnight express delivery, upon receipt when deposited in the United States mail, first-class, certified or registered, postage prepaid,return receipt requested, addressed to the applicable Party at the address set forth below such Party’s signature to this Agreement (which may be omitted inany public filing). Any Party may change its respective address for the purposes of this Section 16 by giving notice of such change to the other Party in themanner provided in this Section 16. -10- 17.Arbitration. To ensure the rapid and economical resolution of disputes that may arise in connection with Executive’s employment with the Company, Executiveand the Company both agree that any and all disputes, claims, or causes of action, in law or equity, including but not limited to statutory claims, arising fromor relating to the enforcement, breach, performance, or interpretation of this Agreement, Executive’s employment with the Company, or the termination ofExecutive’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 bylaw, by final, binding and confidential arbitration conducted in Irvine, California by JAMS, Inc. (“JAMS”) or its successors by a single arbitrator. BothExecutive and the Company acknowledge that by agreeing to this arbitration procedure, both waive the right to resolve any such dispute through a trial byjury or judge. Any such arbitration proceeding will be governed by JAMS’ then applicable rules and procedures for employment disputes, which will beprovided to Executive upon request. In any such proceeding, the arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of thedispute and to award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision including the arbitrator’s essentialfindings and conclusions and a statement of the award. Executive and the Company each shall be entitled to all rights and remedies that either would beentitled to pursue in a court of law. Nothing in this Agreement is intended to prevent either the Company or Executive from obtaining injunctive relief incourt to prevent irreparable harm pending the conclusion of any such arbitration pursuant to applicable law. Similarly, nothing in this Agreement is intendedto restrict the Executive from filing a complaint with the Equal Employment Opportunity Commission or comparable government agency. The Companyshall 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 anyother fees or costs unique to arbitration. Any awards or orders in such arbitrations may be entered and enforced as judgments in the federal and state courts ofany competent jurisdiction. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.] -11- In Witness Whereof, the Parties have executed this Agreement as of the dates written below. ChromaDex Corporation By: /s/ Frank L. Jaksch Jr. Its: Chief Executive Officer Dated: March 12, 2017 Executive: /s/ Robert Fried Robert Fried Dated: March 12, 2017 -12- EXHIBIT A Performance Goals(1)(2) Performance GoalNumber of fully-vested shares of restrictedcommon stock of ChromaDex to be grantedto Executive based upon achievement of suchPerformance Goal1. Net Sales to all distribution channels from and after the Effective Date exceeds Net Sales to alldistribution channels in fiscal year 2016 by not less than $10,000,000 166,6672. Net Sales to all distribution channels from and after the Effective Date exceeds Net Sales to alldistribution channels in fiscal year 2016 by not less than $20,000,000 166,6673. Net Sales to all distribution channels from and after the Effective Date exceeds Net Sales to alldistribution channels in fiscal year 2016 by not less than $30,000,000 166,666TOTAL: 500,000 shares (1) All determinations of Net Sales for purposes of determining whether any of the Performance Goals have been achieved shall be based on the Company’saudited financial statements for the applicable fiscal years. (2) Each Performance Goal may be achieved only once. A-1 Exhibit 21.1 Subsidiaries of ChromaDex Corporation – As of December 31, 2016  Exhibit 23.1 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENT We consent to the incorporation by reference in the Registration Statements of ChromaDex Corporation and Subsidiaries on Form S-3 and as amended [FileNo. 333-203204] and on Form S-8 [File No. 333-196434, File No. 333-168029, File No. 333-154402 and File No. 333-154403] of our report dated March 16,2017, with respect to our audits of the consolidated financial statements of ChromaDex Corporation and Subsidiaries as of December 31, 2016 and January 2,2016 and for the years ended December 31, 2016, January 2, 2016 and January 3, 2015 and our report dated March 16, 2017 with respect to our audit of theeffectiveness of internal control over financial reporting of ChromaDex Corporation and Subsidiaries as of December 31, 2016, which reports are included inthis Annual Report on Form 10-K of ChromaDex Corporation and Subsidiaries for the year ended December 31, 2016. /s/ Marcum llp Marcum llpNew York, NYMarch 16, 2017  Exhibit 31.1Certification of the Principal Executive OfficerPursuant to§240.13a−14 or §240.15d−14 of the Securities Exchange Act of 1934, as amended I, Frank L. Jaksch Jr., certify that: 1. I have reviewed this annual report on Form 10−K 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 thestatements 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 thefinancial 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 inExchange 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)) forthe registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by otherswithin 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 underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal 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 theeffectiveness 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 mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially 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, tothe registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably 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 internalcontrol over financial reporting. Date: March 16, 2017/s/ FRANK L. JAKSCH JR.Frank L. Jaksch Jr.Chief Executive Officer(Principal Executive Officer)  Exhibit 31.2Certification of the Principal Financial OfficerPursuant to§240.13a−14 or §240.15d−14 of the Securities Exchange Act of 1934, as amended I, Thomas C. Varvaro., certify that: 1. I have reviewed this annual report on Form 10−K 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 thestatements 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 thefinancial 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 inExchange 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)) forthe registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by otherswithin 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 underour supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements forexternal 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 theeffectiveness 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 mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially 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, tothe registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably 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 internalcontrol over financial reporting. Date: March 16, 2017/s/ THOMAS C. VARVAROThomas C. VarvaroChief Financial Officer(Principal Accounting Officer)  Exhibit 32.1Certification 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 annual report of ChromaDex Corporation (the “Company”) on Form 10−K for the year ending December 31, 2016 as filedwith the Securities and Exchange Commission on the date hereof (the “Report”), we, Frank L. Jaksch Jr., Chief Executive Officer of the Company, andThomas C. Varvaro, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes−OxleyAct 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; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. Date: March 16, 2017/s/ FRANK L. JAKSCH JR.Frank L. Jaksch Jr.Chief Executive Officer(Principal Executive Officer) /s/ THOMAS C. VARVAROThomas C. VarvaroChief Financial Officer(Principal Accounting Officer) This certification accompanies the Form 10-K to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to beincorporated by reference into any filing of ChromaDex Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, asamended (whether made before or after the date of the Form 10-K), irrespective of any general incorporation language contained in such filing. 

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