ChromaDex
Annual Report 2017

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 30, 2017or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.For the transition period from to 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 [ ] (Do not check if smaller reporting company)Smaller reporting company [ ] Emerging growth company [ ] If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new orrevised financing accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ] No [X] As of June 30, 2017, 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 $144.8 million, based on the closing price of the registrant’s common stock on theNASDAQ Capital Market on June 30, 2017. Number of shares of common stock of the registrant outstanding as of March 8, 2018: 54,836,076. 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 2018 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 fiscalyear ended December 30, 2017.  TABLE OF CONTENTS Item PART I Cautionary Notice Regarding Forward-Looking Statements 11. Business 21A. Risk Factors 151B. Unresolved Staff Comments 322. Properties 323. Legal Proceedings 324. Mine Safety Disclosures 34 PART II 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 356. Selected Financial Data 377. Management's Discussion and Analysis of Financial Condition and Results of Operations 397A Quantitative and Qualitative Disclosures About Market Risk 528. Financial Statements and Supplementary Data 539. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 919A Controls and Procedures 919B. Other Information 92 PART III 10. Directors, Executive Officers and Corporate Governance 9311. Executive Compensation 9312. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 9313. Certain Relationships and Related Transactions, and Director Independence 9314. Principal Accounting Fees and Services 93 PART IV 15. Exhibits, Financial Statement Schedules 9416. Form 10-K Summary 100 Signatures -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 (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended, which are subject to the safe harbor created by thosesections. 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 Unless otherwise indicated or the context otherwise requires, references to the “Company”, “ChromaDex”, “we”, “us” and “our” refer to ChromaDexCorporation and its consolidated subsidiaries. Company Overview ChromaDex is a science-based integrated nutraceutical company devoted to pioneering technologies that improve the way people age. ChromaDex engageswith and supports many of the world's leading research institutions and scientists that are diligently working to understand the full potential of nicotinamideadenine dinucleotide ("NAD") and its impact on human health. NAD is an essential coenzyme and a key regulator of cellular metabolism. Best known for its role in cellular adenosine triphosphate ("ATP") production, NADis now thought to play an important role in healthy aging. Many cellular functions related to health and healthy aging are sensitive to levels of locallyavailable NAD and this represents an active area of research in the field of NAD. NAD levels are not constant, and in humans, NAD levels have been shown to decline by more than 50% from young adulthood to middle age. NAD continuesto decline as humans grow older. There are other causes of reduced NAD levels such as over-nutrition, alcohol consumption and a number of disease states.NAD may also be increased, including through calorie restriction and exercise. Healthy aging, mitochondria and NAD continue to be areas of focus in theresearch community. In 2017, there were over 150 studies on NAD. In 2013, ChromaDex commercialized NIAGEN® nicotinamide riboside ("NR"), a novel form of vitamin B3. Data from numerous animal studies, andconfirmed in human clinical trials, show that NR is a highly efficient NAD precursor that significantly raises NAD levels. NIAGEN is safe for humanconsumption with no adverse side effects. NIAGEN® has twice been successfully reviewed under FDA's new dietary ingredient (“NDI”) notification program,and has also been successfully notified to the FDA as generally recognized as safe (“GRAS”). Animal studies of NIAGEN® have demonstrated a variety ofoutcomes ranging from increased NAD levels, increased cellular metabolism and energy production to improvements in insulin sensitivity. NIAGEN® is thetrade name for our proprietary ingredient NR, and protected by patents to which we are the exclusive licensee. ChromaDex is the world leader in the emerging NAD space. ChromaDex has over 140 partnerships with leading universities and research institutions aroundthe world including the National Institutes of Health, Cornell, Dartmouth, Harvard, Scripps Research Institute and the Mayo Clinic. Other relationships arecurrently being developed. Our scientific advisory board is led by Chairman Dr. Roger Kornberg, Nobel Laureate Stanford Professor, Dr. Charles Brenner, one of the world’s recognizedexperts in NAD and inventor of nicotinamide riboside, Dr. Rudi Tanzi, the co-chair of the department of neurology at Harvard Medical School and one of theworld’s leading experts in food and nutrition, Dr. Bruce German, Chairman of food, nutrition and health at the University of California, Davis, Dr. RobertBeudeker, Vice President of Innovation, who leads the innovation program for human nutrition and health at DSM, and Dr. Matthew Roberts, ChiefTechnical and Quality Officer at Pharmavite, who has over 25 years of success at Abbott, Nestle and Nature's Bounty Co. STRATEGIC SHIFT TO GLOBAL CONSUMER PRODUCT COMPANY The acquisition in March 2017 of Healthspan Research LLC, a company that sold our TRU NIAGEN® product direct to consumers, marked our strategic shiftfrom an ingredient and testing company to a global, consumer focused nutraceutical company. ChromaDex made the strategic decision to commercializeTRU NIAGEN® as a consumer brand, launching the consumer product in 2017. -2- Table of Contents In connection with our strategic decision to grow our global consumer brand, we have reduced the number of active NIAGEN® ingredient supply agreements.As expected, our ingredients segment net sales decreased 34% in 2017, from $16.8 million in 2016 to $11.1 million, which loss was offset by $5.5 million innet sales of TRU NIAGEN®. We believe the global market size for TRU NIAGEN® is substantial. According to Orbis Research, Global Anti-Aging Market Research Report and Forecast2017-2022, June 19, 2017, over $250 billion was spent on the business of youth worldwide in 2016 on looking, acting and feeling younger, which includedskin care, cosmetic surgery, hair restoration, fitness, vitamins and supplements. According to the same report from Orbis Research, the worldwide anti-agingmarket is expected to grow at a compounded average growth rate ("CAGR") of 5.8% through 2021 to about $330 billion. We began the international expansion of our TRU NIAGEN® brand with the launch in Hong Kong and Macau with our strategic partner, Customer G, in thethird quarter of 2017, followed by the launch in Singapore in the first quarter of 2018. We will continue to focus on obtaining additional regulatoryapprovals required to expand our marketing and distribution of our TRU NIAGEN® brand in new strategic international markets. INGREDIENTS AND CORE STANDARDS AND CONTRACT SERVICES BUSINESS SEGMENTS Through our ingredients business segment, we will continue to sell NIAGEN® in ingredient form to our remaining customers that we have supply contractswith. We will also continue to develop and commercialize proprietary ingredients other than NIAGEN®. 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. We haveconducted 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 to ensure that products that containplants, plant extracts and naturally occurring compounds distributed to consumers are safe. We further believe that this need is driven by the perception at theconsumer level regarding a lack of adequate quality controls related to certain functional food or dietary supplement based products, as well as increasedeffort on the part of the Food and Drug Administration (“FDA”) to assure Good Manufacturing Practices (“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 operations, wealso provide our clients in the food, supplement and pharmaceutical industries with effective scientific solutions to manage their potential health andregulatory risks. -3- Table of Contents On January 5, 2017, we opened a 10,000 square foot research and development laboratory in Longmont, Colorado. The new laboratory will support thediscovery and development of molecules and compounds that add to our proprietary ingredient portfolio, while also allowing for the research serviceofferings. For the fiscal years ended December 30, 2017, December 31, 2016 and January 2, 2016, our revenues from continuing operations were approximately $21.2million, $21.7 million and $17.9 million, respectively. The following table summarizes the Company’s total sales for each of the business segments in thelast 3 years. Please refer to Item 8 Financial Statements and Supplementary Data of this Annual Report on Form 10-K for additional financial information foreach of the business segments. Fiscal YearsIngredientsSegmentConsumerProductsSegmentCore Standards and ContractServices SegmentTotal2017$11.1 million$5.5 million$4.6 million$21.2 million2016$16.8 million -$4.9 million$21.7 million2015$12.5 million -$5.4 million$17.9 million Company Background On May 21, 2008, Cody Resources, Inc., a Nevada corporation and a public company, (“Cody”) entered into an Agreement and Plan of Merger (the “MergerAgreement”), by and among Cody, CDI Acquisition, Inc., a California corporation and wholly-owned subsidiary of Cody (“Acquisition Sub”), andChromaDex, Inc. (the “Merger”). Subsequent to the signing of the Merger Agreement, Cody merged with and into a Delaware corporation. On June 20, 2008,Cody amended its articles of incorporation to change its name to ChromaDex Corporation. ChromaDex Corporation was traded on the Over the Countermarket under the symbol "CDXC." On April 25, 2016, ChromaDex Corporation became listed on the NASDAQ under the symbol "CDXC." ChromaDex, Inc., a wholly owned subsidiary of ChromaDex Corporation, was originally formed as a California corporation on February 19, 2000. OnApril 23, 2003, ChromaDex Inc. acquired the research and development group of a competing natural product company, Napro Biotherapeutics, located inBoulder, Colorado. The assets acquired in this transaction were placed in a newly-formed, wholly-owned subsidiary of ChromaDex Inc. named ChromaDexAnalytics, Inc., a Nevada corporation. On December 3, 2012, ChromaDex, Inc. acquired Spherix Consulting Inc., a scientific and regulatory consulting company located in the greater WashingtonD.C. area and Spherix became a wholly-owned subsidiary of ChromaDex, Inc. On December 31, 2016, Spherix Consulting, Inc. merged into ChromaDex, Inc.and subsequently was dissolved. On March 12, 2017, ChromaDex Corporation acquired Healthspan Research LLC, a consumer product company offeringTRU NIAGEN® branded products. This marked the strategic shift to become a fully integrated nutraceutical Company. On September 5, 2017, the Companycompleted the sale of its operating assets that were used with the Company's quality verification program testing and analytical chemistry business for foodand food related products to Covance Laboratories Inc. Business Market According to Orbis Research, Global Anti-Aging Market Research Report and Forecast 2017-2022, June 19, 2017, over $250 billion was spent on thebusiness of youth worldwide in 2016 on looking, acting and feeling younger, which included skin care, cosmetic surgery, hair restoration, fitness, vitaminsand supplements. According to the same report from Orbis Research, the worldwide anti-aging market is expected to grow at a CAGR of 5.8% through 2021to about $330 billion. According to the data from Euromonitor International, the worldwide market for vitamins and supplements was approximately $91billion in 2016, and is expected to grow at a CAGR of 5.7% to about $127 billion in 2022. -4- Table of Contents Business Model CONSUMER PRODUCTS SEGMENT Our business model is to sell TRU NIAGEN® to consumers worldwide. As a world leader in the emerging NAD space and the science of aging, we willcontinue to seek to discover and enhance patented technology and evolve our branded TRU NIAGEN® products to improve health by safely raising NADlevels. The TRU NIAGEN® brand is built on scientific evidence, trust and the direct impact to our consumers aging better. The best way to be trusted as abrand is to be trustworthy as a company. We intend to capture the worldwide NAD-related healthy aging market by entering into new international markets. We will utilize our proprietary ecommerceplatforms, and the ecommerce and brick and mortar platforms of strategic regional and local partners. Our United States ("U.S.") based business will continueto support our global operations, including: ●Corporate development and strategy ●Research and development activities ●Science ●Global premium brand management and brand guidelines ●Multi-platform global marketing campaigns and know-how ●Build and evolve propriety ecommerce platform and data analytics ●Global manufacturing and supply chain operations We expect to continue to supply our international operations with finished products manufactured in the U.S, and to continue to provide all our marketingmaterials and know-how to our international strategic partners. INGREDIENTS SEGMENT We will also continue to identify, acquire, reduce-to-practice, and commercialize other innovative new proprietary ingredients and technologies, with aninitial industry focus on the dietary supplement, food, beverage, skin care and pharmaceutical markets. We have an experienced team that is highly capableof advancing 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. -5- Table of Contents CORE STANDARDS AND CONTRACT SERVICES SEGMENT 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. In addition, through regulatory consulting operations, 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. We will continue to expand our core standards and contract services business and, more importantly, capitalize on additional opportunities in productdevelopment and commercialization of various kinds of intellectual property that we have largely discovered and acquired through the sales processassociated with this segment. Overview of our Products and Services Current products and services provided are as follows: CONSUMER PRODUCTS ●TRU NIAGEN® branded dietary supplements. We currently offer our NIAGEN® nicotinamide riboside through our TRU NIAGEN® finished bottles.We will continue to build our TRU NIAGEN® as a global brand and offer TRU NIAGEN® to consumers worldwide. We are conducting additionalclinical trials to validate the health benefits associated with NIAGEN® and TRU NIAGEN®. INGREDIENTS ●Nicotinamide riboside NIAGEN®. We will continue to sell NIAGEN® in ingredient form to three remaining customers that we have supply contractswith. ●Pterostilbene pTeroPure®. Pterostilbene is a polyphenol and a powerful antioxidant that shows promise in a range of health-related fields. We haveexclusive in-licensed patents and patents pending related to the use of pterostilbene for a number of these benefits, and have filed additional patentsrelated to supplementary benefits, such as a patent jointly filed with University of California at Irvine related to its effects on non-melanoma skincancer. We have successfully conducted a clinical trial, together with the University of Mississippi, related to its blood pressure lowering effects. -6- Table of Contents ●Pterostilbene and caffeine co-crystal PURENERGY®. We are working to validate the benefits of the co-crystal ingredient comprised of caffeine andpterostilbene. The first human study of this ingredient demonstrated that it delivers 30 percent more caffeine, stays in the blood stream longer, and isabsorbed more slowly than ordinary caffeine. With this ingredient, formulators of energy products may have the ability to reduce the total amount ofcaffeine in their products by as much as 50% without sacrificing consumers’ expectations from such products. ●Anthocyanin AnthOrigin™. We plan to develop an extraction process to concentrate the anthocyanins in Suntava® Purple Corn which will be usedto produce a concentrated anthocyanin ingredient. We will utilize the expertise of a toll manufacturer to produce the commercial ingredient. Webelieve there is a ready market for cost-effective concentrated anthocyanins having application in dietary supplements, sports nutrition, food andbeverage and skin care. ●Spirulina Extract Immulina™. IMMULINA™ is a spirulina extract and the predominant active compounds are Braun-type lipoproteins which areuseful for improving human immune function. These lipoproteins are present at much greater levels than those found within commonly usedimmune enhancing botanicals such as Echinacea and ginseng. CORE STANDARDS AND CONTRACT SERVICES ●Supply of reference standards, materials & kits. We supply a wide range of products necessary to conduct quality control of raw materials andconsumer products. Reference standards and materials and the kits created from them are used for research and quality control in the dietarysupplements, cosmetics, food and beverages, and pharmaceutical industries. ●Supply of fine chemicals and phytochemicals. As demand for new natural products and phytochemicals increases, we can scale up and supply ourcore products in the gram to kilogram scale for companies that require these products for research and new product development. ●Consulting services. We provide a comprehensive range of consulting services in the areas of regulatory support, new ingredient or productdevelopment, risk management and litigation support. We provide and offer product regulatory approval and scientific advisory services. ●Process development. Developing cost effective and efficient processes for manufacturing natural products can be very difficult and timeconsuming. We assist customers in creating processes for cost-effective manufacturing of natural products, using “green chemistry.” ●Phytochemical libraries. We intend to continue investing in the development of natural product based libraries by continuing to create theselibraries internally as well as through product licensing. Sales and Marketing Strategy For our consumer products segment, we employ a variety of strategies to drive sales and consumer awareness of TRU NIAGEN®, including social media andinternet advertising, managing websites, influencers, paid search, distribution of research publications and press releases. For our ingredients segment and core standards and contract services segment, our strategy is based on a direct, technically-oriented model. We recruit andhire sales and marketing staff with appropriate commercial and scientific backgrounds. Our sales staff performs sales duties by using combinations oftelemarketing, e-mail, tradeshows and customer visits. The inside sales portion of the organization also has customer service responsibilities. All sales andmarking staff are compensated based on salary and performance-based bonus. Our regulatory consulting operations, generates scientific and regulatoryconsulting revenue from an existing well-established list of Fortune 1000 customers and referrals. -7- Table of Contents USA and Canada: For our consumer products segment, we are distributing our TRU NIAGEN® products direct to consumers through our propriety ecommerce platformTRUNIAGEN.com, Amazon Prime and Amazon marketplace. Currently and for the near-term, we do not plan to sell TRU NIAGEN® to brick and mortarretailers in the US and Canada. For our ingredients segment and core standards and contract services segment, we intend to continue to use a direct marketing approach in the U.S. andCanada to promote our products and services. International: For our consumer products segment, we will be utilizing strategic partners on a regional or local country basis to expand our distribution of TRU NIAGEN®products. Our strategic partnerships could include brick and mortar and/or ecommerce channels. We also are evaluating strategic joint ventures to rapidlyexpand our distribution in regions like Asia. We began our international expansion of TRU NIAGEN® products with the successful launch in Hong Kongand Macau with our strategic partner, Customer G, in the third quarter of 2017, followed by the launch in Singapore in the first quarter of 2018. 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.For our regulatory consulting operations, 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. Government Regulation Some of our operations are subject to regulation by various United States federal agencies and similar state and international agencies, including the FDA,the Federal Trade Commission (“FTC”), the Department of Commerce, the Department of Transportation, the Department of Agriculture and other state andinternational agencies. These regulators govern a wide variety of production activities, from design and development to labeling, manufacturing, handling,selling and distributing of products. From time to time, federal, state and international legislation is enacted that may have the effect of materially increasingthe cost of doing business or limiting or expanding our permissible activities. We cannot predict whether or when potential legislation or regulations will beenacted, and, if enacted, the effect of such legislation, regulation, implementation, or any implemented regulations or supervisory policies would have on ourfinancial condition or results of operations. In addition, the outcome of any litigation, investigations or enforcement actions initiated by state or federalauthorities could result in changes to our operations being necessary and in increased compliance costs. U.S. FDA Regulation In the United States dietary supplements and food are subject to FDA regulations. For example, the FDA’s final rule on 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 (the "FDCA"), can regulate: ●product testing; ●ingredient testing; -8- Table of Contents ●documentation process, batch records, specifications; ●product labeling; ●product manufacturing and storage; ●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(“DSHEA”). DSHEA established a new framework for governing the composition and labeling of dietary supplements. Generally, under DSHEA, dietaryingredients that were marketed in the United States before October 15, 1994 may be used in dietary supplements without notifying the FDA. However, andNDI (a dietary ingredient that was not marketed in the United States before October 15, 1994) is subject to NDI notification that must be submitted to theFDA unless the ingredient has previously been “present in the food supply as an article used for food” without being “chemically altered.” An NDInotification must provide the FDA with evidence of a “history of use or other evidence of safety” establishing that the use of the dietary ingredient “willreasonably be expected to be safe.” An NDI notification must be submitted to the FDA at least 75 days before the initial marketing of the NDI. There can beno assurance that the FDA will accept the evidence of safety for any NDIs that we may want to commercialize, and the FDA’s refusal to accept such evidencecould prevent the marketing of such dietary ingredients. The FDA is in the process of developing guidance for the industry that will aim to clarify the FDA’sinterpretation of the NDI notification requirements, and this guidance may raise new and significant regulatory barriers for NDIs. For any new ingredient developed by us to be used in conventional food or beverage products in the United States, the product either must be approved bythe FDA as a food additive pursuant to a food additive petition ("FAP") or be generally recognized as safe ("GRAS"). The FDA does not have to approve acompany’s determination that an ingredient is GRAS. However, a company can notify the FDA of its determination. There can be no assurance that the FDAwill approve any FAP for any ingredient that we may want to commercialize, or agree with our determination that an ingredient is GRAS, either of whichcould 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 ("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. In addition, The National Advertising Division of the Council of Better Business Bureaus reviews national advertising for truthfulness and accuracy. TheNational Advertising Division of the Council of Better Business Bureaus uses a form of alternative dispute resolution, working closely with in-house counsel,marketing executives, research and development departments and outside consultants to decide whether claims have been substantiated. International Regulations Our international sales for the consumer products segment and ingredients segment are subject to foreign government regulations, which vary substantiallyfrom country to country. The time required to obtain approval by a foreign country may be longer or shorter than that required for FDA approval, and therequirements 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 besubject to FDA export restrictions. We may be unable to obtain on a timely basis, if at all, any foreign government or United States export approvalsnecessary for the marketing of our products abroad. -9- Table of Contents 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 Major customers who accounted for more than 10% of the Company’s total sales from continuing operations were as follows: Years Ended Major Customers 2017 2016 2015 Customer G - Related Party 19.4% * * Customer D 10.2% 11.0% * Customer C * 23.9% * Customer B * * 13.6% * 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 theCompany. However, due to the volume of consumer products and ingredients we are selling in relation to the overall Company’s sales, we do expect that afew of our customers at times may account for more than 10% of the Company’s sales. Competitive Business Conditions For our consumer products segment, we are in direct competition with some of our former and current ingredients segment customers that use NIAGEN® inthe products. We will face reduced competition in the near term as we have reduced the number of NIAGEN® ingredient supply agreements to three as ofMarch 2018. 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. Ingredients Business Segment Competitors ●Royal DSM (the Netherlands) ●Glanbia plc (Ireland) ●BASF (Germany) ●Lonza Group Ltd (Switzerland) ●Sabinsa Corporation (India/USA) -10- Table of Contents For the core standards and contract services segment, we face competition within the standardization and quality testing niche of the natural products market.Below is a current list of certain competitors. These competitors have already developed reference standards or contract services or are currently taking stepsto develop botanical standards or contract services. Of the competitors listed, some currently sell fine chemicals, which, by default, are sometimes used asreference standards, and others are closely aligned with our market niche to reduce any barriers to entry if these companies wish to compete. Core Standards and Contract Services Segment Competitors ●Sigma-Aldrich (USA) ●Phytolab (Germany) ●US Pharmacopoeia (USA) ●Extrasynthese (France) For regulatory consulting operations, 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 areas of our consultingexpertise are low. Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts, Including Duration We currently protect our intellectual property through patents, trademarks, designs and copyrights on our products and services. Our business strategy is touse the intellectual property harnessed from our core standards and contract services segment as the basis for providing new proprietary ingredients to ourcustomers. Our strategy is to develop these proprietary ingredients on our own as well as to license our intellectual property to companies who willcommercialize it. We anticipate that the net result will be a long-term flow of intellectual property milestone and royalty payments to us. The following table sets forth our existing patents and those to which we have licensed rights: -11- Table of Contents Patent Number Title Filing Date Issued Date Expires Licensor 6,852,342Compounds for altering food intake inhumans3/26/20022/8/20052/12/2022Co-owned by Avoca, Inc. andChromaDex7,205,284Potent immunostimulants frommicroalgae7/10/20014/17/20073/9/2022Licensed from University of Mississippi7,776,326Methods and compositions for treatingneuropathies6/3/20058/17/20106/3/2025Licensed from Washington University7,846,452Potent immunostimulatory extracts frommicroalgae7/28/200510/7/20107/28/2025Licensed from University of Mississippi8,106,184Nicotinyl Riboside Compositions andMethods of Use11/17/20061/31/201211/17/2026Licensed from Cornell University8,114,626Yeast strain and method for using thesame to produce Nicotinamide Riboside3/26/20092/14/20123/26/2029Licensed from Dartmouth College8,133,917Pterostilbene as an agonist for theperoxisome proliferator-activatedreceptor alpha isoform10/25/20103/13/201210/25/2030Licensed from the University ofMississippi and U.S. Department ofAgriculture8,197,807Nicotinamide Riboside Kinasecompositions and Methods for using thesame11/20/20076/12/201211/20/2027Licensed from Dartmouth College8,227,510Combine use of pterostilbene andquercetin to produce cancer treatmentmedicaments7/19/20057/24/20127/19/2025Licensed from Green Molecular S.L.8,252,845Pterostilbene as an agonist for theperoxisome proliferator-activatedreceptor alpha isoform2/1/20128/28/20122/1/2032Licensed from the University ofMississippi and U.S. Department ofAgriculture8,318,807Pterostilbene Caffeine Co-Crystal Forms7/30/201011/27/20127/30/2030Licensed from Laurus Labs PrivateLimited8,383,086Nicotinamide Riboside Kinasecompositions and Methods for using thesame4/12/20122/26/20134/12/2032Licensed from Dartmouth College8,399,712Pterostilbene cocrystals7/30/20103/19/20137/30/2020Licensed from Laurus Labs PrivateLimited8,524,782Key intermediate for the preparation ofStilbenes, solid forms of Pterostilbene,and methods for making the same6/1/20099/3/20136/1/2029Licensed from Laurus Labs PrivateLimited8,809,400Method to Ameliorate Oxidative Stressand Improve Working Memory ViaPterostilbene Administration6/10/20088/19/20146/10/2028Licensed from the University ofMississippi and U.S. Department ofAgriculture8,841,350Method for treating non-melanoma skincancer by inducing UDP-Glucuronosyltransferase activity usingpterostilbene5/8/20129/22/20145/8/2032Co-owned by ChromaDex andUniversity of California8,945,653Extracted whole kernels and improvedprocessed and processable cornproduced thereby5/23/20112/3/20155/23/2031Licensed from Suntava, LLC9,028,887Method improve spatial memory viapterostilbene administration5/22/20145/12/20155/22/2034Licensed from the University ofMississippi and U.S. Department ofAgriculture9,439,875Anxiolytic effect of pterostilbene5/11/20119/13/20165/11/2031Licensed from the University ofMississippi and U.S. Department ofAgriculture Manufacturing We currently utilize third-party manufacturers to produce and supply the dietary supplements, ingredients, products, and services. Following the receipt ofproducts or product components from third-party manufacturers, we currently inspect products, as needed. We expect to reserve the right to inspect andensure conformance of each product and product component to our specifications. We will also consider manufacturing certain products or productcomponents internally, if our capacity permits, when demand or quality requirements make it appropriate to do so. -12- Table of Contents We intend to work with manufacturing companies that can meet the standards imposed by the FDA, the International Organization for Standardization andthe quality standards that we will require for our own internal policies and procedures. We expect to monitor and manage supplier performance through acorrective action program developed by us. We believe these manufacturing relationships can minimize our capital investment, help control costs, and allowus to compete with larger volume manufacturers of dietary supplements, phytochemicals and ingredients. Sources and Availability of Raw Materials For all three business segments, we believe that we have identified reliable sources and suppliers of ingredients, chemicals, phytochemicals and referencematerials that will provide products in compliance with our guidelines. Research and Development We have completed the first human clinical trial on our proprietary ingredient NR and the results demonstrated that a single dose of NR resulted instatistically significant increases in the co-enzyme NAD+ in healthy human volunteers. In addition, NR was also found to be safe as no adverse events wereobserved. In 2015, NR was recognized by the FDA as a “New Dietary Ingredient.” NR was also “Generally Recognized as Safe” by an independent panel ofexpert toxicologists and in August 2016, the FDA issued a GRAS No Objection Letter. We are currently completing a second human clinical trial on NR which evaluated the effect of repeated doses of NIAGEN® on NAD+ metaboliteconcentrations in blood, urine and muscle in healthy adults. This study evaluated the impacts of three dose levels of NIAGEN® compared to a placebo. Onequarter of subjects received the low dose of NIAGEN® (100 mg), one quarter received the moderate dose of NIAGEN® (300 mg), one quarter received thehigher dose of NIAGEN® (1,000 mg) and one quarter received the placebo. Preliminary results show that NAD levels rose in response to the dose ofNIAGEN® and the elevated blood NAD levels were sustained throughout the 8-week treatment period. 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 ofCockayne Syndrome, a rare pediatric orphan disease. Through our research and development laboratory in Longmont, Colorado, we intend to manufacture at a process scale for products that we are planning totake 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 the fiscal years ended December 30, 2017, December 31, 2016 and January 2, 2016 were approximately $4.0 million,$2.5 million and $0.9 million, respectively. Please refer to Item 8 Financial Statements and Supplementary Data of this Annual Report on Form 10-K forresearch and development costs for each of the business segments for the last three fiscal years. 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 to comply with federal, state and local environmental laws and regulations. -13- Table of Contents Working Capital The Company’s working capital at the end of years 2017 and 2016 was approximately $7.4 million and $7.8 million, respectively. The Company measuresworking capital by adding trade receivables and inventories, and subtracting accounts payable. Most of the working capital is consumed by our consumerproducts segment and ingredients segment as the operations require a large amount of inventory to be on hand. As the consumer products segment andingredients segment grow, more working capital will likely be needed to support the operations. Backlog Orders For our consumer products segment where we ship products internationally to a distributor, we may have a backlog from time to time as the production ofTRU NIAGEN® finished bottles require up to three months lead time by our third-party contract manufacturers. As of December 30, 2017, we did not haveany backlog orders from the distributor as all orders received have been shipped. For products that are directly shipped to consumers, we have minimalbacklog orders as we carry inventory on hand to ship upon the receipt of order. For our ingredients segment, we also have minimal backlog orders as we carry inventory on hand for most of the products we offer and we ship upon thereceipt of customer’s order. For our 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 30, 2017, ChromaDex (including Healthspan Research LLC and ChromaDex Analytics, Inc.) had 74 employees, 71 of whom were full-timeand three of whom were part-time. We consider our relationships with our employees to be satisfactory. None of our employees is covered by a collectivebargaining agreement. Financial Information about Geographic Areas Please refer to Item 8 Financial Statements and Supplementary Data of this Annual Report on Form 10-K for financial information about geographic areas. Available Information Our Internet website address is www.chromadex.com. We make available free of charge on our website our Annual Reports on Form 10-K, Quarterly Reportson Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities ExchangeAct of 1934, as amended, as soon as reasonably practical after we file such material with, or furnish it to, the Securities and Exchange Commission, or SEC.This information is also available in print to any shareholder who requests it, with any such requests addressed to ChromaDex Corporation, 10005 MuirlandsBlvd. Ste G, Irvine, CA 92618. Certain of these documents may also be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internetwebsite that contains reports, and other information regarding issuers that file electronically with the SEC at www.sec.gov. We also make available free ofcharge on our website our Code of Business Conduct and Ethics, and the Charters of our Audit Committee, Nominating and Corporate GovernanceCommittee, and Compensation Committee of our Board of Directors. -14- Table of Contents 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 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 operating losses, may need additional financing to meet our future long-term capital requirements and may be unable to raisesufficient 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 $11.4million, $2.9 million and $2.8 million for the years ended December 30, 2017, December 31, 2016 and January 2, 2016, respectively. As of December 30,2017, our accumulated deficit was approximately $56.6 million. We have not achieved profitability on an annual basis. We may not be able to reach a levelof revenue to continue to achieve and sustain profitability. If our revenues grow slower than anticipated, or if operating expenses exceed expectations, thenwe may not be able to achieve and sustain profitability in the near future or at all, which may depress our stock price. As of December 30, 2017, our cash and cash equivalents totaled approximately $45.4 million. While we anticipate that our current cash, cash equivalents andcash to be generated from operations will be sufficient to meet our projected operating plans into 2019, we may require additional funds, either throughadditional equity or debt financings or collaborative agreements or from other sources. We have no commitments to obtain such additional financing, and wemay not be able to obtain any such additional financing on terms favorable to us, or at all. If adequate financing is not available, the Company will furtherdelay, postpone or terminate product and service expansion and curtail certain selling, general and administrative operations. The inability to raiseadditional financing may have a material adverse effect on the future performance of the Company. Our capital requirements will depend on many factors. Our capital requirements will depend on many factors, including: ●the revenues generated by sales of our products; ●the costs associated with expanding our sales and marketing efforts, including efforts to hire independent agents and sales representatives and 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, including expenses involved with our ongoing litigation with Elysium. -15- Table of Contents Because of these factors, we may seek to raise additional capital prior to March 2019 both to meet our projected operating plans after March 2019 and to fundour longer term strategic objectives. Additional capital may come from public and private equity or debt offerings, borrowings under lines of credit or othersources. These additional funds may not be available on favorable terms, or at all. There can be no assurance we will be successful in raising these additionalfunds. Furthermore, if we issue equity or debt securities to raise additional funds, our existing stockholders may experience dilution and the new equity ordebt securities we issue may have rights, preferences and privileges senior to those of our existing stockholders. In addition, if we raise additional fundsthrough collaboration, licensing or other similar arrangements, it may be necessary to relinquish valuable rights to our products or proprietary technologies,or grant licenses on terms that are not favorable to us. If we cannot raise funds on acceptable terms, we may not be able to develop or enhance our products,obtain the required regulatory clearances or approvals, execute our business plan, take advantage of future opportunities, or respond to competitive pressuresor unanticipated customer requirements. Any of these events could adversely affect our ability to achieve our development and commercialization goals,which could have a material and adverse effect on our business, results of operations and financial condition. We are currently engaged in substantial and complex litigation with Elysium Health, Inc. and Elysium Health LLC (“Elysium”), the outcome of whichcould materially harm our business and financial results. We are currently engaged in litigation with Elysium, a customer that represented 19% of our net sales for the year ended December 31, 2016. Elysium hasmade no purchases from us since August 9, 2016. The litigation includes multiple complaints and counterclaims by us and Elysium in venues in Californiaand New York, as well as a petition by Elysium with the U.S. Patent and Trademark Office for inter partes review of one patent to which we are the exclusivelicensee. For further details on this litigation, please refer to Part I, Item 3 of this Annual Report on Form 10-K. The litigation is substantial and complex, and it has and could continue to cause us to incur significant costs, as well as distract our management over anextended period. The litigation may substantially disrupt our business and we cannot assure you that we will be able to resolve the litigation on termsfavorable to us. If we are unsuccessful in resolving the litigation on favorable terms to us, we may be forced to pay compensatory and punitive damages andrestitution for any royalty payments that we received from Elysium, which payments could materially harm our business, or be subject to other remedies,including injunctive relief. Further, if we are unsuccessful in resolving the Patent Claim on favorable terms, or if the U.S. Patent and Trademark Officeinvalidates the patent subject to the inter partes review, we may lose the competitive advantage that is provided by the subject intellectual property rights,which would have a material adverse effect on our business. In addition, Elysium has not paid us approximately $2.7 million for previous purchase orders.We may not collect the full amount owed to us by Elysium, and as a result, we may have to write off a large portion of that amount as uncollectible expense.We cannot predict the outcome of our litigation with Elysium, which could have any of the results described above or other results that could materially harmour business. Interruptions in our relationships or declines in our business with major customers could materially ham our business and financial results. Two of our customers accounted for approximately 30% of our sales during the year ended December 30, 2017. Any interruption in our relationship ordecline in our business with these customers or other customers upon whom we become highly dependent could cause harm to our business. Factors thatcould influence our relationship with our customers upon whom we may become highly dependent include: ●our ability to maintain our products at prices that are competitive with those of our competitors; ●our ability to maintain quality levels for our products sufficient to meet the expectations of our customers; ●our ability to produce, ship and deliver a sufficient quantity of our products in a timely manner to meet the needs of our customers; -16- 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. In an effort to promote and better market our consumer products, we have made a strategic decision to not ship NIAGEN® to certain ingredient segmentcustomers, which could potentially harm our overall sales. By developing and selling TRU NIAGEN®, our own consumer standalone NIAGEN® supplement product, we are in direct competition with some of ourcurrent ingredients segment customers that use NIAGEN® in the products that are sold to consumers. In an effort to promote and better market our consumerproduct, we have made a strategic decision not to ship NIAGEN® to certain ingredients segment customers, which will have a negative effect on ouringredient segment sales. For example, sales for our ingredients segment for the year ended December 30, 2017 decreased 34% compared to the year endedDecember 31, 2016. Additionally, as our own consumer product becomes more prominent and widely adopted by consumers, the competition with ourconsumer product could potentially further harm the sales of our ingredients segment business, and our sales of NIAGEN® for our ingredients segment mayfurther decrease. The sales of our consumer product may not outweigh the decrease in sales of our ingredients segment, which would lead to an overalldecrease in our sales. Sales for our ingredients segment represented approximately 53% of the Company’s revenue for 2017, and sales of NIAGEN®accounted for approximately 70% of our ingredient segment’s total sales in 2017, or 37% of our overall revenue, so any harm to our NIAGEN® ingredientsales, if not compensated for by sales of our consumer product, may materially and negatively affect our business. Our future success largely depends on sales of our TRU NIAGEN® product. In connection with our strategic shift from an ingredient and testing company to a consumer focused company, we expect to generate a significant percentageof our future revenue from sales of our TRU NIAGEN® product. As a result, the market acceptance of TRU NIAGEN® is critical to our continued success, andif we are unable to expand market acceptance of TRU NIAGEN®, our business, results of operations, financial condition, liquidity and growth prospectswould be adversely affected. 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 linesas 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. -17- Table of Contents 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 our results of operations. Changes in our business strategy, including entering the consumer product market, or restructuring of our businesses may increase our costs or otherwiseaffect 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 businesses or assets. In addition, external events including changing technology, changing consumer patterns and changes in macroeconomicconditions may impair the value of our assets. When these changes or events occur, we may incur costs to change our business strategy and may need to writedown the value of assets. In any of these events, our costs may increase, we may have significant charges associated with the write-down of assets or returnson new investments may be lower than prior to the change in strategy or restructuring. For example, if we are not successful in developing our consumerproduct business, our sales may decrease and our costs may increase. The success of our consumer product and ingredient business is linked to the size and growth rate of the vitamin, mineral and dietary supplement marketand an adverse change in the size or growth rate of that market could have a material adverse effect on us. An adverse change in the size or growth rate of the vitamin, mineral and dietary supplement market could have a material adverse effect on our business.Underlying market conditions are subject to change based on economic conditions, consumer preferences and other factors that are beyond our control,including media attention and scientific research, which may be positive or negative. Our future growth and profitability of our consumer product business will depend in large part upon the effectiveness and efficiency of our marketingefforts and our ability to select effective markets and media in which to advertise. Our consumer products business success depends on our ability to attract and retain customers, which significantly depends on our marketing practices. Ourfuture growth and profitability will depend in large part upon the effectiveness and efficiency of our marketing efforts, including our ability to: ●create greater awareness of our brand; ●identify the most effective and efficient levels of spending in each market, media and specific media vehicle; ●determine the appropriate creative messages and media mix for advertising, marketing and promotional expenditures; -18- Table of Contents ●effectively manage marketing costs (including creative and media) to maintain acceptable customer acquisition costs; ●acquire cost-effective television advertising; ●select the most effective markets, media and specific media vehicles in which to advertise; and ●convert consumer inquiries into actual orders. Unfavorable publicity or consumer perception of our products and any similar products distributed by other companies could have a material 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 product, or consistent with earlier publicity. Future research reports,findings, regulatory proceedings, litigation, media attention or other publicity that are perceived as less favorable than, or that question, such 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, if accurate or with merit, could have a material adverse effect on the demand for our products, the availability and pricing of our ingredients,and our business, results of operations, financial condition and cash flows. Further, adverse public reports or other media attention regarding the safety,efficacy and quality of nutritional supplements in general, or our products specifically, or associating the consumption of nutritional supplements withillness, could have such a material adverse effect. Any such adverse public reports or other media attention could arise even if the adverse effects associatedwith such products resulted from consumers’ failure to consume such products appropriately or as directed and the content of such public reports and othermedia attention may be beyond our control. We may incur material product liability claims, which could increase our costs and adversely affect our reputation, revenues and operating income. As a consumer product and ingredient supplier we market and manufacture products designed for human and animal consumption, we are subject to productliability claims if the use of our products is alleged to have resulted in injury. Our products consist of vitamins, minerals, herbs and other ingredients that areclassified as foods, dietary supplements, or natural health products, and, in most cases, are not necessarily subject to pre-market regulatory approval in theUnited States. Some of our products contain innovative ingredients that do not have long histories of human consumption. Previously unknown adversereactions resulting from human consumption of these ingredients could occur. In addition, the products we sell are produced by third-party manufacturers. Asa marketer of products manufactured by third parties, we also may be liable for various product liability claims for products we do not manufacture. We may,in the future, be subject to various product liability claims, including, among others, that our products include inadequate instructions for use or inadequatewarnings concerning possible side effects and interactions with other substances. A product liability claim against us could result in increased costs andcould adversely affect our reputation with our customers, which, in turn, could have a materially adverse effect on our business, results of operations,financial condition and cash flows. -19- 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. If we experience product recalls, we may incur significant and unexpected costs, and our business reputation could be adversely affected. We may be exposed to product recalls and adverse public relations if our products are alleged to be mislabeled or cause injury or illness, or if we are allegedto have violated governmental regulations. A product recall could result in substantial and unexpected expenditures, which would reduce operating profitand cash flow. In addition, a product recall may require significant management attention. Product recalls may hurt the value of our brands and lead todecreased demand for our products. Product recalls also may lead to increased scrutiny by federal, state or international regulatory agencies of our operationsand increased litigation and could have a material adverse effect on our business, results of operations, financial condition and cash flows. We depend on key personnel, the loss of any of which could negatively affect our business. We depend greatly on Frank L. Jaksch Jr., Robert N. Fried, Kevin M. Farr, Mark J. Friedman and Troy A. Rhonemus, who are our Chief Executive Officer,President and Chief Operating Officer, Chief Financial Officer, General Counsel and Executive Vice President, respectively. We also depend greatly on otherkey employees, including key scientific and marketing personnel. In general, only highly qualified and trained scientists have the necessary skills to developour products and provide our services. Only marketing personnel with specific experience and knowledge in health care are able to effectively market ourproducts. In addition, some of our manufacturing, quality control, safety and compliance, information technology, sales and e-commerce related positionsare highly technical 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. -20- Table of Contents Our operating results may fluctuate significantly as a result of a variety of factors, many of which are outside of our control. We are subject to the following factors, among others, that may negatively affect our operating results: ●the announcement or introduction of new products by our competitors; ●our ability to upgrade and develop our systems and infrastructure to accommodate growth; ●the decision by significant customers to reduce purchases; ●disputes and litigation with competitors; ●our ability to attract and retain key personnel in a timely and cost-effective manner; ●technical difficulties; ●the amount and timing of operating costs and capital expenditures relating to the expansion of our business, operations and infrastructure; ●regulation by federal, state or local governments; and ●general economic conditions as well as economic conditions specific to the healthcare industry. 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. -21- Table of Contents 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; ●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. -22- Table of Contents 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. In the event a competitor infringes our licensed or pending patent or other intellectual property rights, enforcing those rights may be costly, uncertain,difficult and time consuming. Even if successful, litigation to enforce our intellectual property rights or to defend our patents against challenge could beexpensive and time consuming and could divert our management’s attention. As further described in Part I, Item 3 of this Annual Report on Form 10-K, weare currently involved in patent litigation, as Elysium is claiming that we misused certain patent rights, and has filed a petition with the U.S. Patent andTrademark Office for inter partes review of two patents to which we are the exclusive licensee. The U.S. Patent Trial and Appeal Board denied institution ofan inter partes review for one patent, but granted institution on an inter partes review as to certain claims for the other patent. If we are unsuccessful inresolving the patent misuse claim on favorable terms, or if the U.S. Patent and Trademark Office invalidates the patent still subject to the inter partes review,we may lose the competitive advantage that is provided by the subject intellectual property rights, which could have a material adverse effect on ourbusiness. We may not have sufficient resources to enforce our intellectual property rights or to defend our patents rights against a challenge. The failure toobtain patents and/or protect our intellectual property rights could have a material and adverse effect on our business, results of operations and financialcondition. 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. For example, as further described in Part I, Item 3 of this Annual Report on Form 10-K, we are currently involved in patent litigation, as Elysium isclaiming that we misused certain patent rights, and has filed a petition with the U.S. Patent and Trademark Office for inter partes review of two patents towhich we are the exclusive licensee. The U.S. Patent Trial and Appeal Board denied institution of an inter partes review for one patent, but granted institutionon an inter partes review as to certain claims for the other patent. If we are unsuccessful in resolving the patent misuse claim on favorable terms, or if the U.S.Patent and Trademark Office invalidates the patent subject to the inter partes review, we may lose the competitive advantage that is provided by the subjectintellectual property rights, which could have a material adverse effect on our business. 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. There may be third-party patents or patent applications with claims tomaterials, formulations, methods of manufacture or methods for use related to the use or manufacture of our products, and our potential competitors mayassert that some aspect of our product infringes their patents. Because patent applications may take years to issue, there also may be applications nowpending of which we are unaware that may later result in issued patents upon which our products could infringe. There also may be existing patents orpending patent applications of which we are unaware upon which our products may inadvertently infringe. -23- Table of Contents 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 manufacturing or selling any product that is found to infringe unless we could obtain licenses to use the technologycovered by the patent or are able to design around the patent. We may be unable to obtain such a license on terms acceptable to us, if at all, and we may notbe able to redesign our products to avoid infringement, which could materially impact our revenue. A court could also order us to pay compensatory damagesfor such infringement, plus prejudgment interest and could, in addition, treble the compensatory damages and award attorney fees. These damages could besubstantial and could harm our reputation, business, financial condition and operating results. A court also could enter orders that temporarily, preliminarilyor permanently enjoin us and our customers from making, using, or selling products, and could enter an order mandating that we undertake certain remedialactivities. Depending on the nature of the relief ordered by the court, we could become liable for additional damages to third parties. The prosecution and enforcement of patents licensed to us by third parties are not within our control. Without these technologies, our products may not 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. If anythird party licensor is unable to successfully maintain, prosecute or enforce the licensed patents and/or patent application rights related to our products, wemay become subject to infringement or misappropriate claims or lose our competitive advantage. Without access to these technologies or suitable design-around or alternative technology options, our ability to conduct our business could be impaired significantly. As further described in Part I, Item 3 of thisAnnual Report on Form 10-K, Elysium has filed a petition with the U.S. Patent and Trademark Office for inter partes review of two patents to which we are theexclusive licensee. The U.S. Patent Trial and Appeal Board denied institution of an inter partes review for one patent, but granted institution on an interpartes review as to certain claims for the other patent. Pursuant to the exclusive license agreement with the Trustees of Dartmouth College (“Dartmouth”),Dartmouth controls all future preparation, filing, prosecution and maintenance of the patent subject to such inter partes review. 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. -24- Table of Contents 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. As further described in Part I, Item 3 of this Annual Report on Form 10-K, we are currently involved in substantial and complexlitigation with Elysium. Unexpected results could cause us to have financial exposure in these matters in excess of recorded reserves and insurance coverage,requiring us to provide additional reserves to address these liabilities, therefore impacting profits. Our sales and results of operations for our core standards and contract services segment depend on our customers’ research and development efforts andtheir ability to obtain funding for these efforts. Our core standards and contract services segment customers include researchers at pharmaceutical and biotechnology companies, chemical and relatedcompanies, academic institutions, government laboratories and private foundations. Fluctuations in the research and development budgets of theseresearchers and their organizations could have a significant effect on the demand for our products. Our customers determine their research and developmentbudgets based on several factors, including the need to develop new products, the availability of governmental and other funding, competition and thegeneral availability of resources. As we continue to expand our international operations, we expect research and development spending levels in marketsoutside of the United States will become increasingly important to us. Research and development budgets fluctuate due to changes in available resources, spending priorities, general economic conditions, institutional 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 notice. The timing of the receipt of grant fundsmay affect the timing of purchase decisions by our customers and, as a result, cause fluctuations in our sales and operating results. Demand for our products and services are subject to the commercial success of our customers’ products, which may vary for reasons outside our control. Even if we are successful in securing utilization of our products in a customer’s manufacturing process, sales of many of our products and services 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 underpricing or significant cost overruns could have a material adverse effect on our business, results ofoperations, financial condition and cash flows. -25- Table of Contents We rely on single or a limited number of third-party suppliers for the raw materials required to produce our products. Our dependence on a limited number of third-party suppliers or on a single supplier, and the challenges we may face in obtaining adequate supplies of 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 or products on favorable terms. As part of our business strategy, we intend to consider acquisitions of similar or complementary businesses or products. No assurance can be given that wewill be successful 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 write-downs and dilution to theshareholders of the combined company if the acquisition is made for stock of the combined company. In addition, successful completion of an acquisitionmay depend on consents from third parties, including regulatory authorities and private parties, which consents are beyond our control. There can be noassurance that products, technologies or businesses of acquired companies will be effectively assimilated into the business or product offerings of thecombined company or will have a positive effect on the combined company's revenues or earnings. Further, the combined company may incur significantexpense to complete acquisitions and to support the acquired products and businesses. Any such acquisitions may be funded with cash, debt or equity, whichcould have the effect of diluting or otherwise adversely affecting the holdings or the rights of our existing stockholders. If we experience a significant disruption in our information technology systems or if we fail to implement new systems and software successfully, 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. 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”), 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) the greater 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 rate of interestpublicly announced by Lender as its Prime Rate, plus (b) 2.50 percentage points. Any borrowings, interest or other fees or obligations that the Company owesWestern Alliance pursuant to the Financing Agreement (the “Obligations”) will be become due and payable on November 4, 2018. -26- Table of Contents As of December 30, 2017, and March 14, 2018, 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. 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. -27- Table of Contents 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. These instruments limitour 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. 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. -28- Table of Contents 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 in the United States, strictly regulate the pharmaceutical, dietary supplement, food and cosmeticindustries. Our business involves helping pharmaceutical and biotechnology companies navigate the regulatory drug approval process. Changes inregulation, such as a relaxation in regulatory requirements or the introduction of simplified drug approval procedures, or an increase in regulatoryrequirements that we have difficulty satisfying or that make our services less competitive, could eliminate or substantially reduce the demand for our services.Also, if the government makes efforts to contain drug costs and pharmaceutical and biotechnology company profits from new drugs, our customers mayspend less, or reduce their spending on research and development. If health insurers were to change their practices with respect to reimbursements forpharmaceutical products, our customers may spend less, or reduce their spending on research and development. If we should in the future become required to obtain regulatory approval to market and sell our goods we will not be able to generate any revenues 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. 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. -29- Table of Contents Risks Related to the Securities Markets and Ownership of our Equity Securities The market price of our common stock may be volatile and adversely affected by several factors. The market price of our common stock could fluctuate significantly in response to various factors and events, including, but not limited to: ● our ability to integrate operations, technology, products and services; ● our ability to execute our business plan; ● our operating results are below expectations; ● our issuance of additional securities, including debt or equity or a combination thereof,; ● announcements of technological innovations or new products by us or our competitors; ● acceptance of and demand for our products by consumers; ● media coverage regarding our industry or us; ● litigation; ● disputes with or our inability to collect from significant customers; ● loss of any strategic relationship; ● industry developments, including, without limitation, changes in healthcare policies or practices; ● economic and other external factors; ● 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. The recently passed comprehensive tax reform bill could adversely affect our business and financial condition. On December 22, 2017, President Trump signed into law new legislation that significantly revises the Internal Revenue Code of 1986, as amended. Thenewly enacted federal income tax law, among other things, contains significant changes to corporate taxation, including reduction of the corporate tax ratefrom a top marginal rate of 35% to a flat rate of 21%, limitation of the tax deduction for interest expense to 30% of adjusted earnings (except for certain smallbusinesses), limitation of the deduction for net operating losses to 80% of current year taxable income and elimination of net operating loss carrybacks, onetime taxation of offshore earnings at reduced rates regardless of whether they are repatriated, elimination of U.S. tax on foreign earnings (subject to certainimportant exceptions), immediate deductions for certain new investments instead of deductions for depreciation expense over time, and modifying orrepealing many business deductions and credits (including reducing the business tax credit for certain clinical testing expenses incurred in the testing ofcertain drugs for rare diseases or conditions). Notwithstanding the reduction in the corporate income tax rate, the overall impact of the new federal tax law isuncertain and our business and financial condition could be adversely affected. In addition, it is unknown if and to what extent various states will conform tothe newly enacted federal tax law. The impact of this tax reform on holders of our common stock is likewise uncertain and could be adverse. We urge ourstockholders to consult with their legal and tax advisors with respect to this legislation and the potential tax consequences of investing in or holding ourcommon stock. 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. Projections may not be made in a timely manner or we might fail to reach expected performance levels and could materially affect theprice of our shares. Any failure to meet published forward-looking statements that adversely affect the stock price could result in losses to investors,stockholder lawsuits or other litigation, sanctions or restrictions issued by the SEC. -31- Table of Contents 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 30, 2017, we had outstanding options exercisable for an aggregate of 6,534,167 shares of common stock at a weighted average exercise priceof $3.59 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. Item 1B.Unresolved Staff Comments None. Item 2.Properties As of December 30, 2017, we lease approximately 15,000 square feet of office space in Irvine, California with 2 years remaining on the lease, approximately10,000 square feet of space for research and development laboratory in Longmont, Colorado with 7 years remaining on the lease, approximately 4,500 squarefeet of office space in Los Angeles, California with 4 years remaining on the lease and approximately 2,300 square feet of office space in Rockville, Marylandwith 3 years remaining on the lease. The below table illustrates the use of each property by our business segments. Business SegmentProperty UsedIngredientsAll propertiesConsumer ProductsAll propertiesCore Standards and Contract ServicesIrvine, CA, Longmont, CO and 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 30, 2017, our total annual rental expense was approximately $729,000. 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. (together with Elysium Health, LLC, “Elysium”) as defendant. Among other allegations, ChromaDex, Inc. alleged in the Complaint that(i) Elysium breached the Supply Agreement, dated June 26, 2014, by and between ChromaDex, Inc. and Elysium (the “pTeroPure® Supply Agreement”), byfailing to make payments to ChromaDex, Inc. for purchases of pTeroPure® pursuant to the pTeroPure® Supply Agreement, (ii) Elysium breached the SupplyAgreement, dated February 3, 2014, by and between ChromaDex, Inc. and Elysium, as amended (the “NIAGEN® Supply Agreement”), by failing to makepayments to ChromaDex, Inc. for purchases of NIAGEN® pursuant to the NIAGEN® Supply Agreement, (iii) Elysium breached the Trademark License andRoyalty Agreement, dated February 3, 2014, by and between ChromaDex, Inc. and Elysium (the “License Agreement”), by failing to make payments toChromaDex, Inc. for royalties due pursuant to the License Agreement and (iv) certain officers of Elysium made false promises and representations to induceChromaDex, Inc. into providing large supplies of pTeroPure® and NIAGEN® to Elysium pursuant to the pTeroPure® Supply Agreement and NIAGEN®Supply Agreement. 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, and a declaratory judgment that ChromaDex, Inc. has engaged in patent misuse. On February 15, 2017, ChromaDex, Inc. filed an amended complaint. In the amended complaint, ChromaDex, Inc. re-alleges the claims in the Complaint, andalso alleges that Elysium willfully and maliciously misappropriated ChromaDex, Inc.’s trade secrets. On February 15, 2017, ChromaDex, Inc. also filed amotion to dismiss the Fraud Claim, the Patent Claim and the Unfair Competition Claim. On March 1, 2017, Elysium filed a motion to dismiss ChromaDex,Inc.'s fraud and trade secret misappropriation causes of action. On March 6, 2017, Elysium filed a first amended counterclaim. On March 20, 2017,ChromaDex, Inc. moved to dismiss Elysium's amended fraud, declaratory judgment of patent misuse and the Unfair Competition Claim. On May 10, 2017,the court ruled on the motions to dismiss, denying ChromaDex, Inc.’s motion as to Elysium’s fraud and declaratory judgment claims and grantingChromaDex, Inc.’s motion with prejudice as to Elysium’s Unfair Competition Claim. With respect to Elysium’s motion, the court granted the motion withprejudice as to ChromaDex, Inc.’s fraud claim and granted with leave to amend the motion as to ChromaDex, Inc.’s trade secret misappropriation claims. OnMay 24, 2017, ChromaDex, Inc. answered the first amended counterclaim and asserted several affirmative defenses. Also on May 24, 2017, ChromaDex, Inc.filed a second amended complaint, amending the trade secret misappropriation claims and addressing Elysium’s declaratory judgment of patent misusecounterclaim. On June 7, 2017, ChromaDex, Inc. filed a third amended complaint dismissing the trade secret misappropriation claims and asserting twobreach of contract claims for Elysium’s failure to pay for the product delivered. On June 16, 2017, Elysium answered the third amended complaint. On August14, 2017, ChromaDex, Inc. moved for judgment on the pleadings as to Elysium’s declaratory judgment of patent misuse counterclaim. On September 26,2017, the court denied ChromaDex’s motion without prejudice and directed Elysium to file an amended counterclaim if it intended to maintain itsdeclaratory judgment counterclaim. On October 11, 2017, Elysium filed a second amended counterclaim, re-alleging the claims in the first amendedcounterclaim and adding a claim for unjust enrichment and restitution of the royalties Elysium paid to ChromaDex, Inc. pursuant to the License Agreement.On October 25, 2017, ChromaDex, Inc. filed a motion to dismiss the declaratory judgment of patent misuse and unjust enrichment claims and/or strikeallegations in the unjust enrichment claim contained in the second amended counterclaim. On November 28, 2017, the court denied the motion. ChromaDex,Inc. answered the second amended counterclaim on December 12, 2017. The parties are currently in discovery. On July 17, 2017, Elysium filed petitions with the U.S. Patent and Trademark Office for inter partes review of U.S. Patent No. 8,197,807 (the “’807 Patent”)and 8,383,086 (the “’086 Patent”), patents to which ChromaDex, Inc. is the exclusive licensee. The U.S. Patent Trial and Appeal Board (“PTAB”) deniedinstitution of an inter partes review for the ’807 Patent on January 18, 2018. For the ’086 patent, on January 29, 2018 the PTAB granted institution of an interpartes review as to claims 1, 3, 4, and 5 and denied institution as to claim 2. -33- Table of Contents On September 27, 2017, Elysium Health Inc. ("Elysium Health") filed a complaint in the United States District Court for the Southern District of New York,against ChromaDex, Inc. (the “SDNY Complaint”). Elysium Health alleges in the SDNY Complaint that ChromaDex, Inc. made false and misleadingstatements in a citizen petition to the Food and Drug Administration it filed on or about August 18, 2017. Among other allegations, Elysium Health aversthat the citizen petition made Elysium Health’s product appear dangerous, while casting ChromaDex, Inc.’s own product as safe. The SDNY Complaintasserts four claims for relief: (i) false advertising under the Lanham Act, 15 U.S.C. § 1125(a); (ii) trade libel; (iii) deceptive business practices under New YorkGeneral Business Law § 349; and (iv) tortious interference with prospective economic relations. ChromaDex, Inc. denies the claims in the SDNY Complaintand intends to defend against them vigorously. On October 26, 2017, ChromaDex, Inc. moved to dismiss the SDNY Complaint on the grounds that, inter alia,its statements in the citizen petition are immune from liability under the Noerr-Pennington Doctrine, the litigation privilege, and New York’s Anti-SLAPPstatute, and that the SDNY Complaint failed to state a claim. Elysium Health opposed the motion on November 2, 2017. ChromaDex, Inc. filed its reply onNovember 9, 2017. The motion is currently pending. On October 26, 2017, ChromaDex, Inc. filed a complaint in the United States District Court for the Southern District of New York against Elysium Health (the“ChromaDex SDNY Complaint”). ChromaDex alleges that Elysium Health made material false and misleading statements to consumers in the promotion,marketing, and sale of its health supplement product, Basis, and asserts five claims for relief: (i) false advertising under the Lanham Act, 15 U.S.C. §1125(a);(ii) unfair competition under 15 U.S.C. § 1125(a); (iii) deceptive practices under New York General Business Law § 349; (iv) deceptive practices under NewYork General Business Law § 350; and (v) tortious interference with prospective economic advantage. On November 16, 2017, Elysium Health moved todismiss for failure to state a claim. ChromaDex, Inc. opposed the motion on November 30, 2017 and Elysium Health filed a reply on December 7, 2017. OnNovember 3, 2017, the Court consolidated the SDNY Complaint and the ChromaDex SDNY Complaint actions under the caption In re Elysium Health-ChromaDex Litigation, 17-cv-7394, and stayed discovery in the consolidated action pending a Court-ordered mediation. The mediation was unsuccessfuland the motion is currently pending. The Company is unable to predict the outcome of these matters and, at this time, cannot reasonably estimate the possible loss or range of loss with respect tothe legal proceedings discussed herein. As of December 31, 2017, ChromaDex, Inc. did not accrue a potential loss for the Counterclaim or the SDNYComplaint because ChromaDex, Inc. believes that the allegations are without merit and thus it is not probable that a liability has been incurred. 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. -34- 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 30, 2017 Quarter Ended High Low December 30, 2017 $6.96 $3.88 September 30, 2017 $4.71 $2.91 July 1, 2017 $3.96 $2.26 April 1, 2017 $3.67 $2.50 Fiscal Year Ending December 31, 2016 Quarter 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 On March 8, 2018, the closing sale price was $5.16. 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. -35- 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 30, 2017, of $100 invested on December 29,2012. 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. 12/29/12 12/28/13 1/3/15 1/2/16 12/31/16 12/30/17 ChromaDex Corporation 100.00 288.03 162.02 219.62 198.62 352.84 NASDAQ Composite 100.00 141.58 162.13 173.35 187.34 242.49 S&P Small Cap 600 Health Care Index 100.00 135.35 152.67 165.19 159.35 211.40 -36- Table of Contents Holders of Our Common Stock As of March 8, 2018, we had approximately 58 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 Other than as previously disclosed in our past Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, the Company did not have any sales ofunregistered securities for the period covered by this Annual Report on Form 10-K. 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. -37- Years EndedConsolidated Statement of Operations Data 2017 2016 2015 2014 2013 Sales, net $21,201,482 $21,664,648 $17,884,886 $11,861,099 $7,438,857 Cost of sales 10,724,177 11,274,114 10,350,281 6,855,690 3,926,765 Gross profit 10,477,305 10,390,534 7,534,605 5,005,409 3,512,092 Operating expenses: Sales and marketing 4,459,224 1,558,213 1,507,868 1,482,784 1,627,795 Research and development 4,007,381 2,522,768 891,601 513,671 134,040 General and administrative 17,641,889 9,214,763 7,201,231 7,648,773 4,747,561 Loss from investment in affiliate - - - 45,829 44,961 Other 745,773 - - - - Operating expenses 26,854,267 13,295,744 9,600,700 9,691,057 6,554,357 Operating loss (16,376,962) (2,905,210) (2,066,095) (4,685,648) (3,042,265) Nonoperating income (expense): Interest expense, net (152,784) (333,286) (566,917) (123,976) (4,006)Loss on debt extinguishment - (313,099) - - - Nonoperating expenses (152,784) (646,385) (566,917) (123,976) (4,006)Loss before income taxes (16,529,746) (3,551,595) (2,633,012) (4,809,624) (3,046,271)Provision for income taxes - - (4,527) - - Loss from continuing operations (16,529,746) (3,551,595) (2,637,539) (4,809,624) (3,046,271) Income (loss) from discontinued operations (315,140) 623,410 (133,528) (578,561) (1,373,254)Gain on sale of discontinued operations 5,467,268 - - - - Income (loss) from discontinued operations, net 5,152,128 623,410 (133,528) (578,561) (1,373,254)Net loss $(11,377,618) $(2,928,185) $(2,771,067) $(5,388,185) $(4,419,525) Basic and diluted earnings (loss) per common share: Loss from continuing operations $(0.37) $(0.10) $(0.07) $(0.14) $(0.09) Earnings (loss) from discontinued operations $0.11 $0.02 $(0.01) $(0.01) $(0.04)Basic and diluted loss per common share $(0.26) $(0.08) $(0.08) $(0.15) $(0.13)Basic and diluted weighted average common shares outstanding 44,598,879 37,294,321 35,877,341 35,486,460 33,329,148 At The End of YearConsolidated Balance Sheet Data 2017 2016 2015 2014 2013 Cash $45,388,848 $1,642,429 $5,549,672 $3,964,750 $2,261,336 Working capital (1) 7,415,742 7,786,372 4,400,432 2,189,442 1,602,008 Total assets 62,723,600 19,752,068 18,749,209 11,516,847 8,986,892 Long term debt - - 3,345,335 1,977,113 - Total stockholders' equity $53,833,668 $9,974,358 $5,274,674 $3,998,391 $5,665,451 (1) Trade receivables plus inventories less accounts payable. Years EndedConsolidated Cash Flow Data 2017 2016 2015 2014 2013 Net cash used in operating activities $(9,804,178) $(2,936,596) $(2,111,138) $(2,580,406) $(3,906,011)Net cash provided by (used in) investing activities 4,601,926 (1,724,922) (647,731) 1,590,275 998,651 Net cash provided by financing activities $48,948,671 $754,275 $4,343,791 $2,693,545 $4,648,696 -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 ChromaDex Corporation and its wholly owned subsidiaries, ChromaDex, Inc., Healthspan Research, LLC and ChromaDex Analytics, Inc. (collectively, the“Company” or, in the first person as “we” “us” and “our”) are an integrated, global nutraceutical company devoted to improving the way people age. TheCompany's scientists partner with leading universities and research institutions worldwide to uncover the full potential of nicotinamide adenine dinucleotide("NAD") and identify and develop novel, science-based ingredients. ChromaDex's flagship ingredient, NIAGEN® nicotinamide riboside, sold directly toconsumers as TRU NIAGEN®, is backed with clinical and scientific research, as well as intellectual property protection. The Company also has a corestandards and contract services segment, which focuses on natural product fine chemicals (known as “phytochemicals”), chemistry services, and regulatoryconsulting. 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. As of December 30, 2017, the cash and cash equivalents totaled approximately $45.4 million. The Company anticipates that its current cash, cashequivalents and cash to be generated from operations will be sufficient to meet its projected operating plans through at least March 16, 2019. The Companymay, however, seek additional capital prior to March 16, 2019, both to meet its projected operating plans after March 16, 2019 and/or to fund its longer termstrategic 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. 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 losses per basic and diluted share were $0.26, $0.08 and $0.08 for the twelve-month periods ended December 30, 2017, December 31, 2016 and January2, 2016, respectively. Over the next two years, we plan to continue to increase marketing, research and development efforts for our flagship ingredient,NIAGEN® nicotinamide riboside, and our consumer branded product TRU NIAGEN®. Twelve months ending Dec. 30, 2017 Dec. 31, 2016 Jan. 2, 2016 Sales $21,201,482 $21,664,648 $17,884,886 Cost of sales 10,724,177 11,274,114 10,350,281 Gross profit 10,477,305 10,390,534 7,534,605 Operating expenses -Sales and marketing 4,459,224 1,558,213 1,507,868 -Research and development 4,007,381 2,522,768 891,601 -General and administrative 17,641,889 9,214,763 7,201,231 -Other 745,773 - - Nonoperating -Interest expense, net (152,784) (333,286) (566,917) -Loss on debt extinguishment - (313,099) - Provision for income taxes - - (4,527)Loss from continuing operations (16,529,746) (3,551,595) (2,637,539)Income (loss) from discontinued operations, net 5,152,128 623,410 (133,528)Net loss $(11,377,618) $(2,928,185) $(2,771,067) -39- Table of Contents Year Ended December 30, 2017 Compared to Year Ended December 31, 2016 Net Sales. Net sales consist of gross sales less discounts and returns. Twelve months ending December 30,2017 December 31,2016 Change Net sales: Ingredients $11,153,000 $16,775,000 -34% Consumer Products 5,465,000 - - Core standards and contract services 4,583,000 4,890,000 -6% Total net sales $21,201,000 $21,665,000 -2% ● The decrease in sales for the ingredients segment is mainly due to decreased sales of NIAGEN®. The Company made a strategic decision totransition from an ingredient and testing company to a consumer driven nutraceutical company. This has resulted in a shift in our sales away fromresellers of NIAGEN® to our TRU NIAGEN® branded consumer product. ● With the acquisition of Healthspan Research LLC in March 2017, the Company began selling consumer products that contain the Company'sbranded NIAGEN® ingredient. Segregation of the financial results for the consumer products segment coincides with the Company's strategic shifttowards the consumer products. The Company expects the sales for consumer products segment to grow over the next twelve months. ● The decrease in sales for the core standards and contract services segment is primarily due to decreased sales of analytical reference standards. Cost of Sales. Costs of sales include raw materials, labor, overhead, and delivery costs. Twelve months ending December 30, 2017 December 31, 2016 Amount % ofnet sales Amount % ofnet sales Cost of sales: Ingredients $5,492,000 49% $7,920,000 47% Consumer Products 2,189,000 40% - - Core standards and contract services 3,043,000 66% 3,354,000 69% Total cost of sales $10,724,000 51% $11,274,000 52% -40- Table of Contents The cost of sales, as a percentage of net sales, decreased 1%. ● The cost of sales, as a percentage of net sales, for the ingredients segment increased 2%. This increase as a percentage of net sales was primarily dueto a write-off of our NIAGEN® related inventory of approximately $183,000 in 2017. ● The cost of sales, as a percentage of net sales for the core standards and contract services segment, decreased 3%. We were able to lower our referencestandards purchasing costs by diversifying our sources. 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 30,2017 December 31,2016 Change Gross profit: Ingredients $5,661,000 $8,855,000 -36% Consumer Products 3,276,000 - - Core standards and contract services 1,540,000 1,536,000 0% Total gross profit $10,477,000 $10,391,000 1% ● The decreased gross profit for the ingredients segment is due to the decreased sales of NIAGEN®. The Company made a strategic decision totransition from an ingredient and testing company to a consumer driven nutraceutical company. This has resulted in a shift in our sales away fromresellers of NIAGEN® to our TRU NIAGEN® branded consumer product. ● The consumer products segment posted gross profit of $3.3 million for the year ending in December 30, 2017. The Company expects the sales andgross profit for consumer products segment to grow over the next twelve months. ● The gross profit for the core standards and contract services segment remained the same as the decrease in sales was offset by improved profitability. Operating Expenses – Sales and Marketing. Sales and Marketing Expenses consist of salaries, advertising and marketing expenses. Twelve months ending December 30,2017 December 31,2016 Change Sales and marketing expenses: Ingredients $1,280,000 $1,197,000 7% Consumer Products 2,673,000 - - Core standards and contract services 506,000 361,000 40% Total sales and marketing expenses $4,459,000 $1,558,000 186% -41- Table of Contents ● For the ingredients segment, the increase is largely due to increased marketing efforts to raise consumer awareness for our line of proprietaryingredients. ● For the consumer products segment, we have increased staffing as well as direct marketing expenses associated with social media and other customerawareness and acquisition programs. We will continue to expand both staffing as well as increase other marketing expense as we invest in buildingout our own global branded consumer product business. ● For the core standards and contract services segment, the increase is mainly due to our increased marketing efforts. Operating Expenses – Research and Development. Research and Development Expenses consist of clinical trials and process development expenses. Twelve months ending December 30,2017 December 31,2016 Change Research and development expenses: Ingredients $2,903,000 $2,488,000 17% Consumer Products 1,104,000 - - Core standards and contract services - 35,000 -100% Total research and development expenses $4,007,000 $2,523,000 59% ● In 2017, we began allocating the research and development expenses related to our NIAGEN® branded ingredient to the ingredients and consumerproducts segment, proportional to revenues recorded. Previously, these expenses were recorded all in the ingredients segment. Overall, we increasedour research and development efforts compared to 2016 and we plan to continue to increase research and development efforts for our flagshipingredient, NIAGEN® nicotinamide riboside. ● For the core standards and contract services segment, we explored processes to develop certain compounds at a larger scale during the year endedDecember 31, 2016. Operating Expenses – General and Administrative. General and Administrative Expenses consist of general company administration, IT, accounting andexecutive management expenses. Twelve months ending December 30,2017 December 31,2016 Change General and administrative $17,642,000 $9,215,000 91% -42- Table of Contents The following expenses contributed to the increase in general and administrative expenses in 2017: ●An increase in legal expenses. Our legal expenses increased to approximately $5.1 million in 2017 compared to approximately $1.3 million in 2016.The ongoing litigation with Elysium and our increased efforts to file and maintain patents related to the proprietary ingredient technologies were themain reasons for the increase in legal expenses. ●An increase in share-based compensation. Our share-based compensation expense for 2017 increased to approximately $4.6 million compared toapproximately $1.2 million for 2016. ●Severance payments related our former Chief Financial Officer, Thomas Varvaro. The Company made an accrual of $0.6 million for future paymentsto be made over the next two years. ●An increase of approximately $0.4 million in expenses associated with information and technology. We invested in additional staff and as well asexternal consulting in developing and maintaining our Ecommerce platform, which we use to sell our branded consumer product TRU NIAGEN®. Operating Expenses – Other. Other expense consists of loss from an ongoing litigation. Twelve months ending December 30,2017 December 31,2016 Change Other $746,000 $- - ● In relation to the ongoing litigation, the Company incurred a write-off of approximately $746,000 in gross trade receivable from Elysium related toroyalties billed as part of the existing Trademark License and Royalty Agreement. Nonoperating – Interest Expense, net. Interest expense, net consists of interest on loan payable and capital leases offset by interest income. Twelve months ending December 30,2017 December 31,2016 Change Interest expense, net $153,000 $333,000 -54% ● The decrease in interest expense was mainly due to the term loan from Hercules Technology II, L.P. which the Company drew down an initial $2.5million on September 29, 2014 and a second $2.5 million on June 18, 2015. The Company fully repaid the loan on June 14, 2016. -43- Table of Contents Depreciation and Amortization. For the twelve-month period ended December 30, 2017, we recorded approximately $0.5 million in depreciation comparedto approximately $0.3 million for the twelve-month period ended December 31, 2016. We depreciate our assets on a straight-line basis, based on theestimated useful lives of the respective assets. We amortize intangible assets using a straight-line method, generally over 10 years. For licensed patent rights,the useful lives are 10 years or the remaining term of the patents underlying licensing rights, whichever is shorter. The useful lives of subsequent milestonepayments that are capitalized are the remaining useful life of the initial licensing payment that was capitalized. In the twelve-month period ended December30, 2017, we recorded amortization on intangible assets of approximately $0.2 million compared to approximately $0.1 million for the twelve-month periodended December 31, 2016. Income Taxes. At December 30, 2017 and December 31, 2016, the Company maintained a full valuation allowance against the entire deferred income taxbalance which resulted in an effective tax rate of 0% for each of 2017 and 2016. Net cash used in operating activities. Net cash used in operating activities for the twelve-month period ended December 30, 2017 was approximately $9.8million as compared to approximately $2.9 million for the twelve-month period ended December 31, 2016. Along with the net loss, a decrease in accountspayable was the largest use of cash during the twelve-month period ended December 30, 2017. Net cash used in operating activities for the twelve-monthperiod ended December 31, 2016 largely reflects increase in trade receivables along with the net loss. 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 provided by investing activities was approximately $4.6 million for the twelve-month period ended December30, 2017, compared to approximately $1.7 million used in for the twelve-month period ended December 31, 2016. Net cash provided by investing activitiesfor the twelve-month period ended December 30, 2017 mainly consisted of proceeds from disposal of assets, offset by purchases of leasehold improvementsand equipment and intangible assets. Net cash used in investing activities for the twelve-month period ended December 31, 2016 mainly consisted ofpurchases of leasehold improvements and equipment and intangible assets. Net cash provided by financing activities. Net cash provided by financing activities was approximately $48.9 million for the twelve-month period endedDecember 30, 2017, compared to approximately $0.8 million for the twelve-month period ended December 31, 2016. Net cash provided by financingactivities for 2017 mainly consisted of proceeds from issuances of our common stock and exercise of stock options, offset by principal payments on capitalleases. Net cash provided by financing activities for 2016 mainly consisted of proceeds from issuances of our common stock and warrants through a privateoffering to our existing stockholders and exercise of stock options, offset by principal payments on loan payable and capital leases. Trade Receivables. As of December 30, 2017, we had approximately $5.3 million in trade receivables as compared to approximately $5.9 million as ofDecember 31, 2016. Inventories. As of December 30, 2017, we had approximately $5.8 million in inventory, compared to approximately $7.9 million as of December 31, 2016. Asof December 30, 2017, our inventory consisted of approximately $4.2 million of bulk ingredients, approximately $0.7 million of consumer products andapproximately $0.9 million of phytochemical reference standards. Bulk ingredients are proprietary compounds sold to customers in larger quantities,typically in kilograms. These ingredients are used by our customers in the dietary supplement, food and beverage, animal health, cosmetic andpharmaceutical industries to manufacture their final products. Consumer products inventory consists of TRU NIAGEN® branded finished bottles of dietarysupplement products that contain NIAGEN® ingredient and related work-in-process inventory. Phytochemical reference standards are small quantities ofplan-based compounds typically used to research an array of potential attributes or for quality control purposes. The Company currently lists over 1,800phytochemicals and 400 botanical reference materials in our catalog and holds a lot of these as inventory in small quantities, mostly in grams andmilligrams. -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 a 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 30, 2017, we had $3.7 million in accounts payable compared to approximately $6.0 million as of December 31, 2016. Advances from Customers. As of December 30, 2017, we had approximately $0.4 million in advances from customers compared to approximately $0.4million as of December 31, 2016. These advances are for large-scale consulting projects, contract services and contract research projects where we require adeposit before beginning work. 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 4,890,000 5,343,000 -8% Total net sales $21,665,000 $17,885,000 21% ● The increase in sales for the ingredients segment is due to increased sales of NIAGEN® and PTEROPURE®. ● The decrease in sales for the core standards and contract services segment is primarily due to decreased sales from our regulatory consultingoperations. For regulatory consulting operations, we put a further emphasis on intercompany work supporting our ingredients segment. -45- 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 $7,920,000 47% $6,664,000 53% Core standards and contract services 3,354,000 69% 3,686,000 69% Total cost of sales $11,274,000 52% $10,350,000 58% The cost of sales, as a percentage of net sales, decreased 6%. ● 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 remained the same at 69%. 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 $8,855,000 $5,878,000 51% Core standards and contract services 1,536,000 1,657,000 -7% Total gross profit $10,391,000 $7,535,000 38% ● 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 decreased gross profit for the core standards and contract services segment is largely due to decreased sales from our regulatory consultingoperations, which put a greater focus on intercompany work supporting our ingredients segment. -46- 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 361,000 396,000 -9% Total sales and marketing expenses $1,558,000 $1,508,000 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. 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 NIAGEN®. ● For the core standards and contract services segment, the expense is mainly associated with exploring processes to develop certain compounds at alarger scale. 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 $9,215,000 $7,201,000 28% -47- Table of Contents ● 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 $0.9 million compared to $0.4 million for 2015. In December 2016, we recorded an allowance of $0.5 millionfor a certain 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 $0.7 million compared to approximately $0.4 million for 2015. ● Another factor that contributed to the increase was an increase of approximately $0.5 million in expenses associated with administrative staff. Wemade certain operational changes as certain personnel who were previously assigned to our sales and marketing group were moved to anadministrative group 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 $0.7 million, compared to approximately $0.5million for 2015. ● Also, there were one-time expenses of approximately $0.1 million associated with the initial listing of the Company’s stock on 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 $1.2 million compared to approximately $2.0 million for 2015. Nonoperating – Interest Expense, net. Interest expense consists of interest on loan payable and capital leases offset by interest income. Twelve months ending December 31,2016 January 2,2016 Change Interest expense, net $333,000 $567,000 -41% ● 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. Depreciation and Amortization. For the twelve-month period ended December 31, 2016, we recorded approximately $0.3 million in depreciation comparedto approximately $0.3 million for the twelve-month period ended January 2, 2016. We depreciate our assets on a straight-line basis, based on the estimateduseful lives of the respective assets. We amortize intangible assets using a straight-line method, generally over 10 years. For licensed patent rights, the usefullives are 10 years or the remaining term of the patents underlying licensing rights, whichever is shorter. The useful lives of subsequent milestone paymentsthat are capitalized are the remaining useful life of the initial licensing payment that was capitalized. In the twelve-month period ended December 31, 2016,we recorded amortization on intangible assets of approximately $88,000 compared to approximately $45,000 for the twelve-month period ended January 2,2016. -48- Table of Contents 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 $2.9million as compared to approximately $2.1 million 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 $1.7 million for the twelve-month period ended December 31,2016, compared to approximately $0.6 million 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 $0.8 million for the twelve-month period endedDecember 31, 2016, compared to approximately $4.3 million 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. Liquidity and Capital Resources For the twelve-month periods ended December 30, 2017, December 31, 2016 and January 2, 2016, the Company has incurred losses from continuingoperations of approximately $16.5 million, $3.6 million and $2.6 million, respectively. Net cash used in operating activities for the twelve-month periodsended December 30, 2017, December 31, 2016 and January 2, 2016 was approximately $9.8 million, $2.9 million and $2.1 million, respectively. The lossesand the uses of cash are primarily due to expenses associated with the development and expansion of our operations. These operations have been financedthrough capital contributions, the issuance of common stock and warrants through private placements, and the issuance of debt. Our Board of Directors periodically reviews our capital requirements in light of our proposed business plan. Our future capital requirements will 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. As of December 30, 2017, the cash and cash equivalents totaled approximately $45.4 million. The Company anticipates that its current cash, cashequivalents and cash to be generated from operations will be sufficient to meet its projected operating plans through at least March 16, 2019. The Companymay, however, seek additional capital prior to March 16, 2019, both to meet its projected operating plans after March 16, 2019 and/or to fund its longer termstrategic objectives. -49- Table of Contents 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 30, 2017 and December 31, 2016, we had no off-balance sheet arrangements other than ordinary operating leases asdisclosed in the accompanying financial statements. Contractual Obligations and Commitments The following table summarizes our contractual obligations and other commitments as of December 30, 2017: Payments due by period Total 2018 2019 2020 2021 2022 Capital leases $576,000 $236,000 $196,000 $126,000 $18,000 $- Operating leases 2,093,000 601,000 590,000 424,000 340,000 138,000 Purchase obligations 3,571,000 3,489,000 82,000 - - - Total $6,240,000 $4,326,000 $868,000 $550,000 $358,000 $138,000 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 2018 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 laboratory supplies. 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. -50- Table of Contents 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. In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2014-09, Revenue from Contracts withCustomers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under U.S. Generally Accepted Accounting Principles("GAAP"). The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount thatreflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principleand, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAPincluding identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price andallocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for us in our first quarter of fiscal 2018 using either of twomethods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii)retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additionaldisclosures as defined per ASU 2014-09. The Company will adopt ASU 2014-09, effective the first day of our fiscal year 2018, using the modified retrospective transition method. Under this method,the Company could elect to apply the cumulative effect method to either all contracts as of the date of initial application or only to contracts that are notcomplete as of that date. The Company elected to apply the modified retrospective method to contracts that are not complete as of December 31, 2017. We donot expect the adoption of ASU 2014-09 to have a material impact on our financial statements. 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: Under the Company's 2017 Equity Incentive Plan, as amended, the Board of Directors may grant restricted stock or stock optionsto employees and non-employees. For employees, share-based compensation cost is recorded for all option grants and awards of non-vested stock based onthe grant 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. -51- Table of Contents 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 30,2017, 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, highly 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. Ourinternational sales are denominated in U.S. dollars and we collect in U.S. dollars. 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. -52- Table of Contents Item 8. Financial Statements and Supplementary Data The financial statements are set forth in the pages listed below. PageReports of Independent Registered Public Accounting Firm 54Consolidated Balance Sheets at December 30, 2017 and December 31, 2016 56Consolidated Statements of Operations for the Years Ended December 30, 2017, December 31, 2016 and January 2, 2016 57Consolidated Statements of Stockholders’ Equity for the Years Ended December 30, 2017, December 31, 2016 and January 2, 2016 58Consolidated Statements of Cash Flows for the Years Ended December 30, 2017, December 31, 2016 and January 2, 2016 59Notes to Consolidated Financial Statements 60 -53- Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors ofChromaDex Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of ChromaDex Corporation and Subsidiaries (the “Company”) as of December 30, 2017 andDecember 31, 2016, the related consolidated statements of operations, stockholders’ equity and cash flows for each of the three years in the period endedDecember 30 2017, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the financial position of the Company as of December 30, 2017 and December 31, 2016, and the results of its operations and its cash flowsfor each of the three years in the period ended December 30, 2017, in conformity with accounting principles generally accepted in the United States ofAmerica. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company'sinternal control over financial reporting as of December 30, 2017, based on the criteria established in Internal Control - Integrated Framework issued by theCommittee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013 and our report dated March 15, 2018, expressed an unqualifiedopinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financialstatements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Companyin accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing proceduresto assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also includedevaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financialstatements. We believe that our audits provide a reasonable basis for our opinion. Marcum llp /s/ Marcum LLP We have served as the Company’s auditor since 2013. New York, NYMarch 15, 2018 -54- Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ONINTERNAL CONTROL OVER FINANCIAL REPORTING To the Shareholders and Board of Directors ofChromaDex Corporation Opinion on Internal Control over Financial Reporting We have audited ChromaDex Corporation's (the “Company”) internal control over financial reporting as of December 30, 2017, based on criteria establishedin Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, theCompany maintained, in all material respects, effective internal control over financial reporting as of December 30, 2017, based on criteria established inInternal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidatedbalance sheets as of December 30, 2017 and the related consolidated statements of operations, stockholders’ equity, and cash flows for the years then endedof the Company and our report dated March 15, 2018 expressed an unqualified opinion on those financial statements. Basis for Opinion 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 are a public accounting firmregistered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and theapplicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonableassurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financialreporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing andevaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures aswe considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting 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. /s/ Marcum LLP Marcum llp New York, NYMarch 15, 2018 -55- Table of Contents ChromaDex Corporation and Subsidiaries Consolidated Balance Sheets December 30, 2017 and December 31, 2016 2017 2016 Assets Current Assets Cash $45,388,848 $1,642,429 Trade receivables, net of allowance of $0.7 million and $1.1 million, repectively; Receivables from Related Party: $1.0 million and $0, respectively 5,337,868 5,852,030 Inventories 5,796,281 7,912,630 Prepaid expenses and other assets 655,321 311,539 Current assets held for sale - 18,315 Total current assets 57,178,318 15,736,943 Leasehold Improvements and Equipment, net 2,871,886 1,778,171 Deposits 271,631 377,532 Receivable held at escrow 750,358 - Intangible assets, net 1,651,407 486,226 Long-term investment, related party - 20,318 Noncurrent assets held for sale - 1,352,878 Total assets $62,723,600 $19,752,068 Liabilities and Stockholders' Equity Current Liabilities Accounts payable $3,718,407 $5,978,288 Accrued expenses 3,645,355 2,170,172 Current maturities of capital lease obligations 195,533 255,461 Customer deposits and other 314,335 389,010 Deferred rent, current 114,304 76,219 Due to officer 100,000 - Total current liabilities 8,087,934 8,869,150 Capital lease obligations, less current maturities 310,089 343,589 Deferred rent, less current 491,909 380,205 Noncurrent liabilities held for sale - 184,766 Total liabilities 8,889,932 9,777,710 Commitments and contingencies Stockholders' Equity Common stock, $.001 par value; authorized 150,000,000 shares; issued and outstanding 2017 54,696,741 shares and 2016 37,544,531 shares 54,697 37,545 Additional paid-in capital 110,380,163 55,160,387 Accumulated deficit (56,601,192) (45,223,574)Total stockholders' equity 53,833,668 9,974,358 Total liabilities and stockholders' equity $62,723,600 $19,752,068 See Notes to Consolidated Financial Statements. -56- Table of Contents ChromaDex Corporation and Subsidiaries Consolidated Statements of Operations Years Ended December 30, 2017, December 31, 2016 and January 2, 2016 2017 2016 2015 Sales, net $21,201,482 $21,664,648 $17,884,886 Cost of sales 10,724,177 11,274,114 10,350,281 Gross profit 10,477,305 10,390,534 7,534,605 Operating expenses: Sales and marketing 4,459,224 1,558,213 1,507,868 Research and development 4,007,381 2,522,768 891,601 General and administrative 17,641,889 9,214,763 7,201,231 Other 745,773 - - Operating expenses 26,854,267 13,295,744 9,600,700 Operating loss (16,376,962) (2,905,210) (2,066,095) Nonoperating income (expense): Interest expense, net (152,784) (333,286) (566,917)Loss on debt extinguishment - (313,099) - Nonoperating expenses (152,784) (646,385) (566,917) Loss before income taxes (16,529,746) (3,551,595) (2,633,012)Provision for income taxes - - (4,527) Loss from continuing operations (16,529,746) (3,551,595) (2,637,539) Income (loss) from discontinued operations (315,140) 623,410 (133,528)Gain on sale of discontinued operations 5,467,268 - - Income (loss) from discontinued operations, net 5,152,128 623,410 (133,528) Net loss $(11,377,618) $(2,928,185) $(2,771,067) Basic and diluted earnings (loss) per common share: Loss from continuing operations $(0.37) $(0.10) $(0.07) Earnings (loss) from discontinued operations $0.11 $0.02 $(0.01) Basic and diluted loss per common share $(0.26) $(0.08) $(0.08) Basic and diluted weighted average common shares outstanding 44,598,879 37,294,321 35,877,341 See Notes to Consolidated Financial Statements. -57- Table of Contents ChromaDex Corporation and Subsidiaries Consolidated Statement of Stockholders' Equity Years Ended December 30, 2017, December 31, 2016 and January 2, 2016 Total Common Stock Additional Accumulated Stockholders' Shares Amount Paid-inCapital Deficit Equity 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 Issuance of common stock, net of offering costs of $1,420,000 15,592,788 15,593 47,578,626 - 47,594,219 Exercise of stock options 884,754 885 3,037,075 - 3,037,960 Vested restricted stock 674,668 674 (674) - - Share-based compensation 4,604,749 - 4,604,749 Net loss - - - (11,377,618) (11,377,618) Balance, December 30, 2017 54,696,741 $54,697 $110,380,163 $(56,601,192) $53,833,668 See Notes to Consolidated Financial Statements. -58- Table of Contents ChromaDex Corporation and Subsidiaries Consolidated Statements of Cash Flows Years Ended December 30, 2017, December 31, 2016 and January 2, 2016 2017 2016 2015 Cash Flows From Operating Activities Net loss $(11,377,618) $(2,928,185) $(2,771,067) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation of leasehold improvements and equipment 509,933 331,734 285,536 Amortization of intangibles 206,208 87,826 45,014 Share-based compensation expense 4,604,749 1,193,782 1,977,611 Allowance for doubtful trade receivables (411,475) 713,122 329,844 Gain from disposal of assets (5,467,268) - - Loss from disposal of equipment 4,649 7,114 19,643 Loss from impairment of intangibles - - 19,495 Loss on debt extinguishment - 313,099 - Non-cash financing costs 120,759 110,161 188,442 Changes in operating assets and liabilities: Trade receivables 937,093 (4,114,561) (873,726) Inventories 2,177,263 240,851 (4,439,458) Prepaid expenses and other assets (296,312) (133,855) (82,124) Accounts payable (2,363,653) (245,670) 2,772,350 Accrued expenses 1,471,976 867,307 449,180 Customer deposits and other (67,855) 117,008 37,567 Deferred rent 179,873 503,671 (69,445) Due to officer (32,500) - - Net cash used in operating activities (9,804,178) (2,936,596) (2,111,138) Cash Flows From Investing Activities Proceeds from disposal of assets, net of transaction costs 5,953,390 - - Purchases of leasehold improvements and equipment (1,167,506) (1,504,922) (525,231) Purchases of intangible assets (183,958) (220,000) (122,500)Net cash provided by (used in) investing activities 4,601,926 (1,724,922) (647,731) Cash Flows From Financing Activities Proceeds from issuance of common stock, net of issuance costs 46,594,216 5,717,474 1,974,893 Proceeds from exercise of stock options 3,037,960 716,612 94,846 Proceeds from loan payable - - 2,500,000 Payment of debt issuance costs (75,178) (176,836) (15,000) Principal payment on loan payable - (5,000,000) - Cash paid for debt extinguishment costs - (281,092) - Principal payments on capital leases (608,327) (221,883) (210,948)Net cash provided by financing activities 48,948,671 754,275 4,343,791 Net increase (decrease) in cash 43,746,419 (3,907,243) 1,584,922 Cash Beginning of Year 1,642,429 5,549,672 3,964,750 Cash Ending of Year $45,388,848 $1,642,429 $5,549,672 Supplemental Disclosures of Cash Flow Information Cash payments for interest $57,024 $261,738 $427,591 Supplemental Schedule of Noncash Investing Activity Noncash consideration transferred for the acquisition of Healthspan Research LLC $1,187,430 $- $- Capital lease obligation incurred for the purchase of equipment $514,899 $156,655 $303,933 Receivable from disposal of assets held at escrow $750,000 $- $- Inventory supplied to Healthspan Research, LLC for equity interest, at cost $- $20,318 $- Retirement of fully depreciated equipment - cost $57,424 $90,803 $121,213 Retirement of fully depreciated equipment - accumulated depreciation $(57,424) $(90,803) $(121,213) See Notes to Consolidated Financial Statements. -59- Table of Contents Note 1. Nature of Business and Liquidity Nature of business: ChromaDex Corporation and its wholly owned subsidiaries, ChromaDex, Inc., Healthspan Research, LLC and ChromaDex Analytics, Inc.(collectively, the “Company” or, in the first person as “we” “us” and “our”) are an integrated, global nutraceutical company devoted to improving the waypeople age. The Company's scientists partner with leading universities and research institutions worldwide to uncover the full potential of NAD and identifyand develop novel, science-based ingredients. Its flagship ingredient, NIAGEN® nicotinamide riboside, sold directly to consumers as TRU NIAGEN®, isbacked with clinical and scientific research, as well as intellectual property protection. The Company also has core standards and contract services segment,which focuses on natural product fine chemicals (known as “phytochemicals”), chemistry services, and regulatory consulting. Liquidity: The Company has incurred a loss from continuing operations of approximately $16.5 million and a net loss of approximately $11.4 million for theyear ended December 30, 2017, and net losses of approximately $2.9 million and $2.8 million for the years ended December 31, 2016 and January 2, 2016,respectively. As of December 30, 2017, the cash and cash equivalents totaled approximately $45.4 million. The Company anticipates that its current cash, cash equivalents and cash to be generated from operations will be sufficient to meet its projected operatingplans through at least March 16, 2019. The Company may, however, seek additional capital prior to March 16, 2019, both to meet its projected operatingplans after March 16, 2019 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 years 2017, 2016 and 2015 ended on the Saturday closest to December 31. Change in Fiscal Year: On January 25, 2018, the Board of Directors of ChromaDex Corporation approved a resolution to change the Company’s fiscal yearfrom a 52/53-week fiscal year that ends on the Saturday closest to December 31 to a calendar year. As such, the Company’s 2018 fiscal year will be extendedfrom December 29, 2018 to December 31, 2018, with subsequent fiscal years beginning on January 1 and ending on December 31 of each year. Effectivefiscal year 2018, the Company’s quarterly results will be for the periods ending March 31, June 30, September 30 and December 31. Adopted Accounting Pronouncements Fiscal 2017: In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting StandardsUpdate (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The ASU 2017-01 clarifies the definition of abusiness with the objective of adding guidance to assist companies and other reporting organizations with evaluating whether transactions should beaccounted for as acquisitions of assets or businesses. The Company early adopted the amendments in this ASU effective as of January 1, 2017. On March 12,2017, the Company acquired all the outstanding equity interests of Healthspan Research, LLC ("Healthspan") pursuant to a Membership Interest PurchaseAgreement by and among (i) Robert Fried, Jeffrey Allen and Dr. Charles Brenner (the “Sellers”) and (ii) ChromaDex Corporation. Under ASU 2017-01, thistransaction was treated as an acquisition of assets, rather than a business. 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. The Company adopted the amendments in this ASU effective as of January 1, 2017. The adoption of ASU 2016-09 did not have a materialeffect on our consolidated financial statements. -60- Table of Contents 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. The Company adopted the amendments in this ASU effective as of January 1, 2017. The adoption of ASU2015-11 did not have a material effect on our consolidated financial statements. 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. Shipping andhandling fees billed to customers and the cost of shipping and handling fees billed to customers for the years ending December 30, 2017, December 31, 2016and January 2, 2016 are as follows: 2017 2016 2015 Shipping and handling fees billed $137,000 $110,000 $113,000 Cost of shipping and handling fees billed $185,000 $108,000 $112,000 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 one bank. 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 30, 2017 and December 31, 2016are as follows: 2017 2016 Allowances Related to Customer C $500,000 $800,000 Customer E - 198,000 Other Allowances 169,000 83,000 $669,000 $1,081,000 Trade accounts receivable are written off when deemed uncollectible. Recoveries of trade accounts receivable previously written off are recorded whenreceived. -61- Table of Contents 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 30, 2017, we held a total deposit of approximately $45.4 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. Weassess credit 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 netrealizable value. The inventory on the balance sheet is recorded net of valuation allowances. Labor and overhead has been added to inventory that wasmanufactured or characterized by the Company. The amounts of major classes of inventory for the periods ended December 30, 2017 and December 31, 2016are as follows: 2017 2016 Bulk ingredients $4,159,000 $7,044,000 Reference standards 1,027,000 1,033,000 Consumer Products - Finished Goods 503,000 - Consumer Products - Work in Process 249,000 - 5,938,000 8,077,000 Less valuation allowance 142,000 164,000 $5,796,000 $7,913,000 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 cash received from customers in advance of product shipment or delivery of services. -62- Table of Contents 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 2014 to 2017, which statutes expire in 2018 to 2021, 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 December30, 2017, the Company has no liability for unrecognized tax benefits. 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 30, 2017, December 31, 2016 and January 2, 2016 were approximately $1,914,000, $58,000 and $104,000, 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 to 90 days to exercise the shareoptions; and (v) the share options are nontransferable and nonhedgeable. Market conditions that affect vesting of stock options are considered in the grant-date fair value. The issues surrounding the valuation for such awards can becomplex and consideration needs to be given for how the market condition should be incorporated into the valuation of the award. The Company considersusing other valuation techniques, such as Monte Carlo simulations based on a lattice approach, to value awards with market conditions. 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. -63- Table of Contents Effective January 1, 2017, the Company made an election to recognize forfeitures when they occur as a result of the adoption of ASU 2016-09, Compensation- Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting to simplify the accounting for stock compensation. 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 3 inputs. 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. 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. -64- Table of Contents The Company will adopt ASU 2014-09, effective the first day of our fiscal year 2018, using the modified retrospective transition method. Under this method,the Company could elect to apply the cumulative effect method to either all contracts as of the date of initial application or only to contracts that are notcomplete as of that date. The Company elected to apply the modified retrospective method to contracts that are not complete as of the first day of our fiscalyear 2018. In 2017, approximately $19.7 million of the Company's total revenue of $21.2 million, or 93% of the total revenue, was as a result of shippingphysical goods to the customers. For such revenue streams which we ship physical goods, we believe that there will be a minimal impact compared to ourcurrent accounting policies as the duration of the contract term is short and it ends when control of the goods transfers to the customer. We also have arevenue stream which we provide regulatory consulting services to our clients. In 2017, our revenue from this stream was approximately $0.7 million, or 3%of the total revenue. For some of these services, we are currently recognizing revenue based on achievements of milestones as prescribed in the contracts withthe customers. ASU 2014-09 states that an entity should recognize revenue over time by measuring the progress toward complete satisfaction of theperformance obligation. This revenue stream will be impacted by the adoption of ASU 2014-09. We have begun the implementation process of adopting ASU 2014-09 and we do not believe there are any significant implementation matters that have notyet been addressed. We do not expect the adoption of ASU 2014-09 to have a material impact on our financial statements. 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. Note 3. 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 30, 2017,December 31, 2016 and January 2, 2016. Years Ended 2017 2016 2015 Net loss $(11,377,618) $(2,928,185) $(2,771,067) Basic and diluted loss per common share $(0.26) $(0.08) $(0.08) Basic and diluted weighted average common shares outstanding (1): 44,598,879 37,294,321 35,877,341 Potentially dilutive securities (2): Stock options 6,534,167 5,210,334 5,244,918 Warrants 470,444 470,444 423,007 Convertible debt - - 257,798 (1) Includes approximately 0.5 million, 0.4 million and 0.4 million nonvested restricted stock for the years 2017, 2016 and 2015, respectively, which are participating securities that feature voting and dividend rights. (2) Excluded from the computation of loss per share as their impact is antidilutive. -65- Table of Contents Note 4. Intangible Assets Intangible assets consisted of the following: 2017 2016 WeightedAverageTotalAmortizationPeriod Healthspan Research LLC Acquisition (See Note 9) $1,346,000 $- 10 yearsLicense agreements and other 1,494,000 1,469,000 9 yearsLess accumulated depreciation (1,189,000) (983,000) $1,651,000 $486,000 Amortization expenses on amortizable intangible assets included in the consolidated statement of operations for the years ended December 30, 2017,December 31, 2016 and January 2, 2016 were approximately $206,000, $88,000 and $45,000, respectively. Estimated aggregate amortization expense for each of the next five years is as follows: Years ending December: 2018 $233,000 2019 233,000 2020 228,000 2021 209,000 2022 171,000 Thereafter 577,000 $1,651,000 -66- Table of Contents Note 5. Leasehold Improvements and Equipment, Net Leasehold improvements and equipment, net of assets held for sale, consisted of the following: 2017 2016 Useful Life Laboratory equipment $1,869,000 $1,142,000 10 years Leasehold improvements 1,699,000 1,332,000 Lesser of lease term orestimated useful lifeComputer equipment 511,000 400,000 3 to 5 years Furniture and fixtures 90,000 41,000 7 years Office equipment 18,000 10,000 10 years Construction in progress 131,000 170,000 4,318,000 3,095,000 Less accumulated depreciation 1,446,000 1,317,000 $2,872,000 $1,778,000 Depreciation expenses on leasehold improvements and equipment included in the consolidated statement of operations for the years ended December 30,2017, December 31, 2016 and January 2, 2016 were approximately $510,000, $332,000 and $286,000, respectively. The Company leases equipment under capitalized lease obligations with a total cost of approximately $871,000 and $1,214,000 and accumulatedamortization of $126,000 and $277,000 as of December 30, 2017 and December 31, 2016, respectively. Note 6. Capitalized Lease Obligations Minimum future lease payments under capital leases as of December 30, 2017, are as follows: Year ending December: 2018 $236,000 2019 196,000 2020 126,000 2021 18,000 Total minimum lease payments 576,000 Less amount representing interest at a rate of approximately 9.8% per year 70,000 Present value of net minimum lease payments 506,000 Less current portion 196,000 Long-term obligations under capital leases $310,000 -67- Table of Contents Interest expenses related to capital leases were approximately $57,000, $48,000 and $62,000 for the years ended December 30, 2017, December 31, 2016 andJanuary 2, 2016, respectively. Note 7. Line of Credit 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. As of December 30, 2017 and December 31, 2016, the Company did not haveany outstanding loan payable 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 theFinancing Agreement will be become due and payable on November 4, 2018. Debt Issuance Costs The Company incurred debt issuance costs of approximately $252,000 in connection with this line of credit arrangement and had an unamortized balance ofapproximately $115,000 as of December 30, 2017. 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. Note 8. Income Taxes The provision for income tax consists of following: 2017 2016 2015 Current Federal $- $- $- State - - 4,527 Deferred (net of valuation allowance) Federal - - - State - - - Income tax provision $- $- $4,527 At December 30, 2017 and December 31, 2016, the Company maintained a full valuation allowance against the entire deferred income tax balance whichresulted in an effective tax rates of 0%, 0% and 0.2% for years 2017, 2016 and 2015, respectively. At December 30, 2017 and December 31, 2016, werecorded a valuation allowance of $12.9 million and $15.5 million, respectively. The valuation allowance decreased by $2.6 million during 2017. 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: 2017 2016 2015 Federal income tax expense at statutory rate (34.0)% (34.0)% (34.0)%State income tax, net of federal benefit (5.3)% (5.3)% (5.1)%Permanent differences 7.6% 8.4% 5.7%Change in tax rates 0% (0.3)% 0.7%Changes of state net operating losses 1.3% 1.8% 17.4%Change in stock options and restricted stock (1.3)% 11.8% 0.0%Change in valuation allowance (23.1)% 16.4% 13.7%Remeasurement of deferred taxes asset / liability 53.4% - - Other 1.4% 1.2% 1.8%Effective tax rate 0.0% 0.0% 0.2% -68- Table of Contents On December 22, 2017, new legislation was signed into law, informally titled the Tax Cuts and Jobs Act, which included, among other things, a provision toreduce the federal corporate income tax rate to 21%. Under ASC 740, Accounting for Income Taxes, the enactment of the Tax Act also requires companies, torecognize the effects of changes in tax laws and rates on deferred tax assets and liabilities and the retroactive effects of changes in tax laws in the period inwhich the new legislation is enacted. There is no further change to its assertion on maintaining a full valuation allowance against its U.S. deferred tax assets.The Company’s gross deferred tax assets have been revalued from 34% to 21% with a corresponding offset to the valuation allowance and any potential othertaxes arising due to the Tax Act will result in reductions to its net operating loss carryforward and valuation allowance. Deferred tax assets of approximately$19.1 million have been revalued to approximately $13.0 million with a corresponding decrease to the Company’s valuation allowance. Upon completion ofour 2017 U.S. income tax return in 2018 we may identify additional remeasurement adjustments to our recorded deferred tax liabilities and the one-timetransition tax. We will continue to assess our provision for income taxes as future guidance is issued, but do not currently anticipate significant revisions willbe necessary. Any such revisions will be treated in accordance with the measurement period guidance outlined in Staff Accounting Bulletin No. 118. The deferred income tax assets and liabilities consisted of the following components as of December 30, 2017 and December 31, 2016: 2017 2016 Deferred tax assets: Net operating loss carryforward $9,963,000 $11,023,000 Capital loss carryforward - 811,000 Stock options and restricted stock 1,873,000 2,694,000 Inventory reserve 143,000 195,000 Allowance for doubtful accounts 183,000 425,000 Accrued expenses 674,000 487,000 Deferred revenue 19,000 13,000 Intangibles 27,000 29,000 Deferred rent 166,000 252,000 13,048,000 15,929,000 Less valuation allowance (12,904,000) (15,530,000) 144,000 399,000 Deferred tax liabilities: Leasehold improvements and equipment (9,000) (282,000)Prepaid expenses (135,000) (117,000) (144,000) (399,000) $- $- -69- Table of Contents The Company has tax net operating loss carryforwards for federal and state income tax purposes of approximately $40.0 million and $29.6 million,respectively which begin to expire in the year ending December 31, 2023 and 2022, respectively. 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 has determined that the stock issued in the year of 2017 did not create a change in control under the Internal Revenue CodeSection 382. 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 is currently not under examination by the Internal Revenue Service or any other jurisdictions for any tax years. The Company has notidentified any uncertain tax positions requiring a reserve as of December 30, 2017 and December 31, 2016. Note 9. Related Party Transactions Asset acquisition On March 12, 2017, the Company acquired all of the outstanding equity interests of Healthspan from Robert Fried, Jeffrey Allen and Dr. Charles Brenner (the"Sellers"). Robert Fried is a member of the Board of Directors ("Board") of the Company, a position he has held since July 2015. Upon the closing of, and as consideration for, the acquisition, the Company issued an aggregate of 367,648 shares of the Company’s common stock to theSellers. The fair value of these shares was approximately $1.0 million based on the closing price of $2.72 per share on March 12, 2017. Also on March 12,2017, the Company appointed Robert Fried as President and Chief Strategy Officer, effective immediately. Mr. Fried continues to serve as a member of theBoard, but resigned as a member of the Nominating and Corporate Governance Committee of the Board.Healthspan was formed in August 2015 to offer and sell finished bottle product TRU NIAGEN® directly to consumers through internet-based sellingplatforms. TRU NIAGEN® is currently the Company's leading product. Prior to the acquisition, the Company has supplied certain amount of NIAGEN® toHealthspan as a raw material inventory in exchange for a 4% equity interest in Healthspan. An additional 5% equity interest was received for granting certainexclusive rights to resell NIAGEN® prior to the total acquisition on March 12, 2017. This transaction was accounted for as an acquisition of assets. An intangible asset of approximately $1.35 million was recorded as a result of this acquisition,which is the difference of consideration transferred and the net amount of assets acquired and liabilities assumed. (A) Consideration transferred (B) Net amount of assets and liabilities Fair value Assets acquired Fair value Common Stock $1,000,000 Cash and cash equivalents $19,000 Transaction costs 178,000 Trade receivables 11,000 Previously held equity interest 20,000 Inventory 61,000 $1,198,000 Liabilities assumed Due to officer (132,000) Accounts payable (74,000) Credit card payable (30,000) Other accrued expenses (3,000)Consumer product business model, intangible asset (A) -(B) $1,346,000 Net assets $(148,000) -70- Table of Contents The acquired intangible asset is considered to have a useful life of 10 years. The expense is amortized using the straight-line method over the useful life andthe Company recognized an amortization expense of approximately $109,000 for the year ended December 30, 2017. In cancellation of a loan owed by Healthspan to Mr. Fried prior to the acquisition, the Company repaid $32,500 to Mr. Fried on March 13, 2017 and alsorepaid $100,000 on March 9, 2018. No interest was paid for the $100,000 repaid on March 9, 2018. Sale of consumer products, related party During July 2017, the Company entered into an exclusivity agreement (the "Customer G Agreement") with Customer G, whereby the Company agreed toexclusively sell its TRU NIAGEN® dietary supplement product to Customer G in certain territories in Asia. During the year ended December 30, 2017, theCompany sold approximately $4.1 million of TRU NIAGEN® dietary supplement product pursuant to the Customer G Agreement. As of December 30, 2017,the trade receivable from Customer G was approximately $1.0 million. Li Ka Shing, who beneficially owns more than 10% of the Company's common stock, beneficially owns approximately 30% of Entity A and Entity Abeneficially owns approximately 75% of Customer G. In accordance with the Company's Related-Person Transactions Policy, the Audit Committee of theCompany's Board of Directors ratified the terms of sales agreement with Customer G. Note 10. Discontinued Operations On September 5, 2017, the Company completed the sale of its operating assets that were used with the Company's quality verification program testing andanalytical chemistry business for food and food related products (the "Lab Business") to Covance Laboratories Inc. ("Covance"). In consideration of the LabBusiness sale, the Company received $6.75 million from Covance and additional cash consideration of $0.8 million is currently held in escrow to satisfy anypotential indemnification claims by Covance. The Company was also eligible to receive an additional earnout payment from Covance in an amount equal toup to $1.0 million, tied to 2017 revenue of the Lab Business. However, 2017 revenue of the Lab Business came up short of the required threshold and thiscontingent consideration was not earned. The Company recorded a gain of approximately $5.5 million from the disposal. (A) Consideration received (C) Carrying value of the Lab Business Amount Assets disposed Carrying value Cash payment $6,750,000 Leasehold improvements and equipment, net $1,427,000 Cash payment held in escrow (1) 750,000 Prepaid expenses 11,000 Additional earnout payment - Deposits 20,000 $7,500,000 Liabilities disposed (B) Selling costs Deferred revenue (7,000) Amount Deferred rent (215,000) Legal $428,000 Financial consulting 250,000 Other 118,000 $796,000 Net assets $1,236,000 Gain from disposal (A) - (B) - (C) $5,468,000 (1) $750,000 is expected to be held in escrow until March 2019 to satisfy any indemnification claims. The sale of the Lab Business qualifies as a discontinued operation as the sale represents a strategic shift that has (or will have) a major effect on operationsand financial results. -71- Table of Contents The results of operations from the discontinued operations for the years ended December 30, 2017, December 31, 2016 and January 2, 2016 are as follows: Statements of Operations - Discontinued operations Years Ended December 30, 2017, December 31, 2016 and January 2, 2016 2017 2016 2015 Sales $2,820,631 $5,146,438 $4,129,254 Cost of sales 2,478,827 3,615,840 3,182,851 Gross profit 341,804 1,530,598 946,403 Operating expenses: Sales and marketing 482,134 692,376 818,920 General and administrative 150,171 178,446 215,220 Operating expenses 632,305 870,822 1,034,140 Operating income (loss) (290,501) 659,776 (87,737) Nonoperating income (expense): Interest expense, net (24,639) (36,366) (45,791)Nonoperating expenses (24,639) (36,366) (45,791) Income (loss) from discontinued operations $(315,140) $623,410 $(133,528) -72- Table of Contents The assets and liabilities that are classified as held for sale as of December 31, 2016 are as follows: Dec. 31, 2016 Current assets held for sale Prepaid expenses $18,315 Leasehold Improvements and Equipment, net 1,333,203 Deposits 19,675 Total assets held for sale 1,371,193 Deferred rent 184,766 Total liabilities held for sale $184,766 Depreciation, capital expenditures and significant noncash investing activities of the discontinued operations for the years ended December 30, 2017,December 31, 2016 and January 2, 2016 are as follows: 2017 2016 2015 Depreciation $169,250 $254,755 $234,010 Purchase of leasehod improvements and equipment $111,232 $313,842 $190,632 Noncash investing activity Capital lease obligation incurred for the purchase of equipment $- $156,655 $303,933 Retirement of fully depreciated equipment - cost $55,947 $76,050 $119,888 Retirement of fully depreciated equipment - accumulated depreciation $(55,947) $(76,050) $(119,888) Note 11. Share-Based Compensation 11A. 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. On June 20, 2017, the stockholders of the Company approved the ChromaDex Corporation 2017 Equity Incentive Plan (the "2017 Plan"). The 2017 Plan isintended to be the successor to the ChromaDex Corporation Second Amended and Restated 2007 Equity Incentive Plan (the "2007 Plan"). Under the 2017Plan, the Company is authorized to issue stock options that total no more than the sum of (i) 3,000,000 new shares, (ii) approximately 384,000 unallocatedshares remaining available for the grant of new awards under the 2007 Plan, and (iii) any returned shares from the 2007 Plan or the 2017 Plan, such asforfeited, cancelled, or expired shares. Under both 2007 Plan and 2017 Plan, the total number of shares the Company may grant, excluding returned shares, was approximately 10.8 million shares.The remaining amount available for issuance under the 2017 Plan totaled approximately 1.4 million shares at December 30, 2017. -73- Table of Contents General Vesting Conditions The stock option awards generally vest ratably over a three to four-year period following grant date after a passage of time. However, some stock optionawards are market or performance based and vest based on certain triggering events established by the Compensation Committee, subject to approval by theBoard of Directors. The fair value of the Company’s stock options that are not market based was estimated at the date of grant using the Black-Scholes based option valuationmodel. The table below outlines the weighted average assumptions for options granted to employees during the years ended December 30, 2017, December31, 2016 and January 2, 2016. Year Ended December 2017 2016 2015 Expected term 6 years 6 years 6 years Volatility 72% 73% 76%Dividend Yield 0% 0% 0%Risk-free rate 2% 1% 2% 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 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 Options Granted 1,110,404 3.25 10.00 $2.07 Options Exercised (863,712) 2.42 $2,455,000 Options Expired (3,334) 4.50 Options Forfeited (73,483) 3.88 Outstanding at December 30, 2017 4,451,026 $4.45 5.76 $10,740,000* Exercisable at December 30, 2017 2,937,613 $3.54 5.18 $7,230,000* *The aggregate intrinsic values in the table above are based on the Company’s closing stock price of $5.88 on the last day of business for the year endedDecember 30, 2017. -74- 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 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 Options Granted - - Options Exercised - - Options Forfeited - - Outstanding at December 30, 2017 66,668 $1.89 5.08 $266,000 Exercisable at December 30, 2017 66,668 $1.89 5.08 $266,000 The aggregate intrinsic value in the table above are, based on the Company’s closing stock price of $5.88 on the last day of business for the period endedDecember 30, 2017. 3) Market Based Stock Options The Company also grants stock option awards that are market based which have vesting conditions associated with a service condition as well asperformance of the Company's stock price. The following table summarizes market based stock options activity: Weighted Average Remaining Aggregate Number of Exercise Contractual Fair Intrinsic Shares Price Term Value Value Outstanding at December 31, 2016 - $- - Options Granted 1,000,000 4.24 10.00 $3.04 Options Exercised - - Options Forfeited - - Outstanding at December 30, 2017 1,000,000 $4.24 9.24 $1,640,000 Exercisable at December 30, 2017 55,556 $4.24 9.24 $91,000 -75- Table of Contents The aggregate intrinsic value in the table above are, based on the Company’s closing stock price of $5.88 on the last day of business for the period endedDecember 30, 2017. The fair value of 1,000,000 options granted during the period ended December 30, 2017 was measured using Monte Carlo simulations based on a latticeapproach with following assumptions: Volatility: 67% Contractual Term: 10 years Risk Free Rate: 2.4% Cost of Equity: 15.7% For the contractual term, we are using 10 years as this is not a "plain vanilla" option. SEC Staff Accounting Bulletin No. 107 simplified method for estimatingthe expected term can be only used if the option is a "plain vanilla" option. As of December 30, 2017, there was approximately $5.7 million of total unrecognized compensation expense related to non-vested share-basedcompensation arrangements granted under the plans for employee stock options. That cost is expected to be recognized over a weighted average period of 2.5years. 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 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 Granted 500,000 5.08 Vested (666,668) 4.60 Forfeited - - Unvested shares at December 30, 2017 183,335 $3.25 Expected to Vest as of December 30, 2017 183,335 $3.25 During the year ended December 30, 2017, the Company granted 500,000 shares of restricted stock award to the Company's President and Chief OperatingOfficer Robert Fried, which vested during the year ended December 30, 2017. The expense for vested restricted stock was approximately $2.5 million and wasrecognized during the year ended December 30, 2017. During the year ended December 30, 2017, the Company's former Chief Financial Officer, Thomas Varvaro resigned and received immediate vesting of hisunvested restricted stock of 166,668 shares. The expense for the vested restricted stock was approximately $525,000 and was recognized prior to the fiscalyear 2015. During the years ended December 31, 2016 and January 2, 2016, several members of the Board resigned from the Board and received immediate vesting oftheir unvested restricted stock of 6,668 shares and 173,336 shares, respectively. The expense for the vested restricted stock was approximately $761,000 andwas recognized all during the fiscal year ended January 3, 2015. Employee Option and Restricted Stock Compensation The Company recognized share-based compensation expense of approximately $4.4 million, $1.1 million and $1.5 million in general and administrativeexpenses in the statement of operations for the years ended December 30, 2017, December 31, 2016 and January 2, 2016, respectively. -76- Table of Contents 11B. 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 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 Options Granted 175,000 4.89 10.00 Options Exercised (21,042) 3.88 $24,000 Options Forfeited - - Outstanding at December 30, 2017 1,016,473 $3.61 5.16 $2,361,000* Exercisable at December 30, 2017 824,806 $3.35 4.15 $2,088,000* The aggregate intrinsic values in the table above are, based on the Company’s closing stock price of $5.88 on the last day of business for the year endedDecember 30, 2017. 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 30, 2017 and December 31, 2016. Year Ended December 2017 2016 2015 Contractual term 6 years 5 years N/A Volatility 69% 73% N/A Dividend yield 0% 0% N/A Risk-free rate 2% 2% N/A As of December 30, 2017, there was approximately $651,000 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 2.4 years. -77- Table of Contents 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 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 at December 31, 2016 10,000 $3.31 Granted - - Vested (8,000) 3.63 Forfeited - - Unvested shares expected to vest at December 30, 2017 2,000 $5.88 As of December 30, 2017, there was approximately $12,000 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 2 months as of December 30, 2017. The Company did not award any stock grants to non-employees in 2017 and 2016. For the year ended January 2, 2016, the Company awarded 116,668 sharesof the Company’s common stock to non-employees and recognized expenses of $361,000. Non-Employee Option, Stock and Restricted Stock Awards For non-employee share-based compensation, the Company recognized share-based compensation expense of approximately $171,000, $61,000 and$435,000 in general and administrative expenses in the statement of operations for the years ended December 30, 2017, December 31, 2016 and January 2,2016, respectively. -78- Table of Contents Note 12. Stock Issuance Fiscal year 2017 On April 26, 2017, the Company entered into a Securities Purchase Agreement with certain purchasers named therein, pursuant to which the Company agreedto sell and issue up to $25.0 million of its common stock at a purchase price of $2.60 per share in three tranches of approximately $3.5 million, $16.4 millionand $5.1 million, respectively. All three tranches closed during the year ended December 30, 2017, whereby approximately 9.6 million shares were issued forproceeds of $23.7 million, net of offering costs. On November 3, 2017 the Company entered into a Securities Purchase Agreement for the sale of approximately $23.0 million of its common stock in aprivate placement, in return for which the purchasers received approximately 5.6 million shares at a per share price of $4.10. The private placement closedduring the year ended December 30, 2017 and the Company received proceeds of $22.9 million, net of offering costs. Fiscal year 2016 On March 11, 2016, the Company entered into a Securities Purchase Agreement (the "March 2016 SPA") to raise $500,000 in a registered direct offering.Pursuant to the March 2016 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 ofthe Company’s common stock and a 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 3years. The estimated fair value of the warrant was approximately $108,000 and the warrant was determined to be classified as equity. The fair value wasestimated at the date of issuance using the Black-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 securities purchase agreements to raise $5,250,000 in a registered direct offering, pursuant to which, theCompany sold a total of 1,117,022 shares of the Company’s common stock at a purchase price of $4.70 per share. Fiscal year 2015 In Fiscal Year 2015, the Company entered into securities purchase agreements with certain existing stockholders to raise $2,000,000 in a registered directoffering. Pursuant to those securities purchase agreements, the Company sold a total of 200,000 Units at a purchase price of $10.00 per Unit, with each Unitconsisting of 2.667 shares of the Company’s common stock 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 estimated fair value of the warrants was approximately $489,000 and these warrants were determined to beclassified as equity. The fair value was estimated at the date of issuance using the Black-Scholes based valuation model. The table below outlines theassumptions 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% -79- Table of Contents Note 13. Warrants The following table summarizes activity of warrants at December 30, 2017, December 31, 2016 and January 2, 2016 and changes during the years thenended: Weighted Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value 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 Warrants Issued - - Warrants Exercised - - Warrants Expired - - Outstanding and exercisable at December 30, 2017 470,444 $4.15 1.17 $814,000 The aggregate intrinsic values in the table above are based on the Company’s closing stock price of $5.88 on the last day of business for the year endedDecember 30, 2017. 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 and January 2, 2016. 2016 2015 Fair value of common stock $4.41 $4.41 Contractual term 3.0 years 3.0 years Volatility 60% 62%Risk-free rate 1.16% 1.27%Expected dividends 0% 0% Note 14. 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 2018 through February 2024. Monthly lease payments range from $1,500 per month to $24,000 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 30, 2017 are as follows: Fiscal years ending: 2018 $601,000 2019 590,000 2020 424,000 2021 340,000 2022 138,000 Thereafter 167,000 $2,260,000 -80- Table of Contents Rent expense was approximately $729,000, $606,000 and $536,000 for the years ended December 30, 2017, December 31, 2016 and January 2, 2016,respectively. As of December 30, 2017, deferred rent from these operating lease agreements increased to $492,000 compared to $380,000 as of December 31, 2016. On July6, 2017, the Company entered into a lease for an office space located in Los Angeles, California. Pursuant to the term of the lease, the landlord providedtenant improvements for approximately $122,000. The landlord provided lease incentive (a) has been recorded as leasehold improvement asset and isamortized over the lease term which is through September 2021; and (b) has been recorded as deferred rent and is amortized as reductions to lease expenseover the lease term. Subsequent to the year ended December 30, 2017, the Company entered into a lease amendment to lease additional office space located in Los Angeles,California through October 2021. Pursuant to the lease, the Company will make additional monthly lease payments ranging from approximately $9,000 to$11,000, as the payments escalate during the term of the lease. 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 laboratory supplies. Minimum future payments under purchase obligations as ofDecember 30, 2017 are as follows: Fiscal years ending: 2018 $3,489,000 2019 82,000 $3,571,000 Royalty The Company has 11 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 an estimated year of 2037. Yearly minimum royalty payments including license maintenance feesrange from $10,000 per year to $83,000 per year, however, these minimum payments escalate each year with a maximum of $200,000 per year. In addition,the Company is required to pay a range of 2% to 8% of sales related to the licensed products under these agreements. Total royalty expenses includinglicense maintenance fees from continuing operations for the years ended December 30, 2017, December 31, 2016 and January 2, 2016 were approximately$992,000, $773,000 and $583,000, respectively under these agreements. Minimum royalties including license maintenance fees for the next five years are asfollows: Fiscal years ending: 2018 $446,000 2019 612,000 2020 467,000 2021 485,000 2022 450,000 $2,460,000 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. (together with Elysium Health, LLC, “Elysium”) as defendant. Among other allegations, ChromaDex, Inc. alleged in the Complaint that(i) Elysium breached the Supply Agreement, dated June 26, 2014, by and between ChromaDex, Inc. and Elysium (the “pTeroPure® Supply Agreement”), byfailing to make payments to ChromaDex, Inc. for purchases of pTeroPure® pursuant to the pTeroPure® Supply Agreement, (ii) Elysium breached the SupplyAgreement, dated February 3, 2014, by and between ChromaDex, Inc. and Elysium, as amended (the “NIAGEN® Supply Agreement”), by failing to makepayments to ChromaDex, Inc. for purchases of NIAGEN® pursuant to the NIAGEN® Supply Agreement, (iii) Elysium breached the Trademark License andRoyalty Agreement, dated February 3, 2014, by and between ChromaDex, Inc. and Elysium (the “License Agreement”), by failing to make payments toChromaDex, Inc. for royalties due pursuant to the License Agreement and (iv) certain officers of Elysium made false promises and representations to induceChromaDex, Inc. into providing large supplies of pTeroPure® and NIAGEN® to Elysium pursuant to the pTeroPure® Supply Agreement and NIAGEN®Supply Agreement. ChromaDex, Inc. is seeking punitive damages, money damages and interest. -81- 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, and a declaratory judgment that ChromaDex, Inc. has engaged in patent misuse. On February 15, 2017, ChromaDex, Inc. filed an amended complaint. In the amended complaint, ChromaDex, Inc. re-alleges the claims in the Complaint, andalso alleges that Elysium willfully and maliciously misappropriated ChromaDex, Inc.’s trade secrets. On February 15, 2017, ChromaDex, Inc. also filed amotion to dismiss the Fraud Claim, the Patent Claim and the Unfair Competition Claim. On March 1, 2017, Elysium filed a motion to dismiss ChromaDex,Inc.'s fraud and trade secret misappropriation causes of action. On March 6, 2017, Elysium filed a first amended counterclaim. On March 20, 2017,ChromaDex, Inc. moved to dismiss Elysium's amended fraud, declaratory judgment of patent misuse and the Unfair Competition Claim. On May 10, 2017,the court ruled on the motions to dismiss, denying ChromaDex, Inc.’s motion as to Elysium’s fraud and declaratory judgment claims and grantingChromaDex, Inc.’s motion with prejudice as to Elysium’s Unfair Competition Claim. With respect to Elysium’s motion, the court granted the motion withprejudice as to ChromaDex, Inc.’s fraud claim and granted with leave to amend the motion as to ChromaDex, Inc.’s trade secret misappropriation claims. OnMay 24, 2017, ChromaDex, Inc. answered the first amended counterclaim and asserted several affirmative defenses. Also on May 24, 2017, ChromaDex, Inc.filed a second amended complaint, amending the trade secret misappropriation claims and addressing Elysium’s declaratory judgment of patent misusecounterclaim. On June 7, 2017, ChromaDex, Inc. filed a third amended complaint dismissing the trade secret misappropriation claims and asserting twobreach of contract claims for Elysium’s failure to pay for the product delivered. On June 16, 2017, Elysium answered the third amended complaint. On August14, 2017, ChromaDex, Inc. moved for judgment on the pleadings as to Elysium’s declaratory judgment of patent misuse counterclaim. On September 26,2017, the court denied ChromaDex’s motion without prejudice and directed Elysium to file an amended counterclaim if it intended to maintain itsdeclaratory judgment counterclaim. On October 11, 2017, Elysium filed a second amended counterclaim, re-alleging the claims in the first amendedcounterclaim and adding a claim for unjust enrichment and restitution of the royalties Elysium paid to ChromaDex, Inc. pursuant to the License Agreement.On October 25, 2017, ChromaDex, Inc. filed a motion to dismiss the declaratory judgment of patent misuse and unjust enrichment claims and/or strikeallegations in the unjust enrichment claim contained in the second amended counterclaim. On November 28, 2017, the court denied the motion. ChromaDex,Inc. answered the second amended counterclaim on December 12, 2017. The parties are currently in discovery. On July 17, 2017, Elysium filed petitions with the U.S. Patent and Trademark Office for inter partes review of U.S. Patent No. 8,197,807 (the “’807 Patent”)and 8,383,086 (the “’086 Patent”), patents to which ChromaDex, Inc. is the exclusive licensee. The U.S. Patent Trial and Appeal Board (“PTAB”) deniedinstitution of an inter partes review for the ’807 Patent on January 18, 2018. For the ’086 patent, on January 29, 2018 the PTAB granted institution of an interpartes review as to claims 1, 3, 4, and 5 and denied institution as to claim 2. On September 27, 2017, Elysium Health Inc. ("Elysium Health") filed a complaint in the United States District Court for the Southern District of New York,against ChromaDex, Inc. (the “SDNY Complaint”). Elysium Health alleges in the SDNY Complaint that ChromaDex, Inc. made false and misleadingstatements in a citizen petition to the Food and Drug Administration it filed on or about August 18, 2017. Among other allegations, Elysium Health aversthat the citizen petition made Elysium Health’s product appear dangerous, while casting ChromaDex, Inc.’s own product as safe. The SDNY Complaintasserts four claims for relief: (i) false advertising under the Lanham Act, 15 U.S.C. § 1125(a); (ii) trade libel; (iii) deceptive business practices under New YorkGeneral Business Law § 349; and (iv) tortious interference with prospective economic relations. ChromaDex, Inc. denies the claims in the SDNY Complaintand intends to defend against them vigorously. On October 26, 2017, ChromaDex, Inc. moved to dismiss the SDNY Complaint on the grounds that, inter alia,its statements in the citizen petition are immune from liability under the Noerr-Pennington Doctrine, the litigation privilege, and New York’s Anti-SLAPPstatute, and that the SDNY Complaint failed to state a claim. Elysium Health opposed the motion on November 2, 2017. ChromaDex, Inc. filed its reply onNovember 9, 2017. The motion is currently pending. -82- Table of Contents On October 26, 2017, ChromaDex, Inc. filed a complaint in the United States District Court for the Southern District of New York against Elysium Health (the“ChromaDex SDNY Complaint”). ChromaDex alleges that Elysium Health made material false and misleading statements to consumers in the promotion,marketing, and sale of its health supplement product, Basis, and asserts five claims for relief: (i) false advertising under the Lanham Act, 15 U.S.C. §1125(a);(ii) unfair competition under 15 U.S.C. § 1125(a); (iii) deceptive practices under New York General Business Law § 349; (iv) deceptive practices under NewYork General Business Law § 350; and (v) tortious interference with prospective economic advantage. On November 16, 2017, Elysium Health moved todismiss for failure to state a claim. ChromaDex, Inc. opposed the motion on November 30, 2017 and Elysium Health filed a reply on December 7, 2017. OnNovember 3, 2017, the Court consolidated the SDNY Complaint and the ChromaDex SDNY Complaint actions under the caption In re Elysium Health-ChromaDex Litigation, 17-cv-7394, and stayed discovery in the consolidated action pending a Court-ordered mediation. The mediation was unsuccessfuland the motion is currently pending. The Company is unable to predict the outcome of these matters and, at this time, cannot reasonably estimate the possible loss or range of loss with respect tothe legal proceedings discussed herein. As of December 31, 2017, ChromaDex, Inc. did not accrue a potential loss for the Counterclaim or the SDNYComplaint because ChromaDex, Inc. believes that the allegations are without merit and thus it is not probable that a liability has been incurred. 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 named executive officers As of December 30, 2017, the Company has four named executive officers, Frank Jaksch, Jr., Chief Executive Officer, Robert Fried, President and ChiefOperating Officer, Kevin Farr, Chief Financial Officer and Troy Rhonemus, Executive Vice President. Upon termination, Mr. Jaksch, Mr. Fried, Mr. Farr andMr. Rhonemus will receive severance payments per the terms of the respective employment agreements entered with the Company. The key terms of theemployment agreements, including the severance terms are as follows: 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. -83- Table of Contents 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 awards. Employment Agreement with Robert Fried On March 12, 2017, the Company entered into an Employment Agreement (the "Fried Agreement") with Robert Fried. Mr. Fried is entitled to receive certainseverance payments per the terms of the Fried Agreement. The key terms of the Fried Agreement, including the severance terms are as follows: Mr. Fried is entitled to: (i) an annual base salary of $300,000; (ii) an annual cash bonus equal to (a) 1% of net direct-to-consumer sales of products withnicotinamide riboside as a lead ingredient by the Company plus (b) 2% of direct to consumer net sales of products with nicotinamide riboside as a leadingredient for the portion of such sales that exceeded prior year sales plus (c) 1% of the gross profit derived from nicotinamide riboside ingredient sales todietary supplement producers; (iii) an option to purchase up to 500,000 shares of Common Stock under the 2007 Plan, subject to monthly vesting over athree-year period, which option grant Mr. Fried received on March 12, 2017; and (iv) 166,667 shares of restricted Common Stock, which vested on December20, 2017 in connection with an amendment to the Fried Agreement (the "Fried Amendment") by and between the Company and Mr. Fried, dated December20, 2017. In addition, Mr. Fried received 333,333 shares of restricted stock on December 20, 2017, which were immediately vested in connection with theFried Amendment. Subject to Mr. Fried’s continuous service through such date, Mr. Fried is also eligible to receive up to 500,000 shares of fully-vested restricted CommonStock that will be granted upon the achievement of certain performance goals. The Fried Amendment also provides that Mr. Fried will be granted these sharesof performance-based restricted Common Stock immediately prior to the consummation of a change in control of the Company, subject to Mr. Fried'scontinuous service through such change in control. Any unvested options or shares of restricted stock will vest in full upon (a) a change in control of the Company, (b) Mr. Fried’s death, (c) Mr. Fried’sdisability, (d) termination by the Company of Mr. Fried’s employment without cause or (e) Mr. Fried’s resignation for good reason, subject in each case to Mr.Fried’s continuous service as an employee or consultant of the Company or any of its subsidiaries though such event. The severance terms of the Fried Agreement provide that if (i) Mr. Fried’s employment is terminated by the Company without cause, for death or disability, orMr. Fried resigns for good reason, or (ii) (a) a change in control of the Company occurs and (b) within one month prior to the date of such change in control ortwelve months after the date of such change in control Mr. Fried’s employment is terminated by the Company other than for cause, then, subject to executinga release, Mr. Fried will receive (w) continuation of his base salary for 12 months, (x) health care continuation coverage payments premiums for 12 months,(y) a prorated annual cash bonus earned for the fiscal year in which such termination or resignation occurs, and (z) an extended exercise period for hisoptions. Employment Agreement with Kevin Farr On October 5, 2017, the Company entered into an Employee Agreement (the "Farr Agreement") with Kevin M. Farr who was appointed by the Board to serveas Chief Financial Officer, principal accounting officer and principal financial officer. Mr. Farr is entitled to receive certain severance payments per the termsof the Farr Agreement. The key terms of the Farr Agreement, including the severance terms are as follows: -84- Table of Contents Mr. Farr is entitled to: (i) an annual base salary of $300,000 and (ii) a discretionary annual bonus based on the achievement of certain performance goals to bedetermined by the Board. Pursuant to the Farr Agreement, Mr. Farr also received an option to purchase up to 1,000,000 shares of ChromaDex common stockunder the ChromaDex 2017 Equity Incentive Plan, subject to monthly vesting over a three-year period, with an exercise price equal to $4.24 per share. Anyunvested options will vest in full (a) upon a change of control of the Company, subject to Mr. Farr’s continuous service through such change of control, (b)on the date (the “Price Threshold Date”) that the unweighted average closing price of the Company’s common stock as quoted on the Nasdaq Capital Market(or such similar established stock exchange) over the previous 20 trading days (including the date such calculation is measured) first equals or exceeds$10.00 per share, subject to Mr. Farr’s continuous service through such Price Threshold Date, or (c) if Mr. Farr is terminated by the Company without cause orif Mr. Farr resigns for good reason within 90 days prior to such change of control or Price Threshold Date. If Mr. Farr’s employment is terminated by the Company without cause or Mr. Farr resigns for good reason, then, subject to executing a release, Mr. Farr willreceive (i) continuation of his base salary for 12 months, (ii) COBRA premiums for 12 months, (iii) a prorated annual cash bonus, based on the good faithdetermination of the Board of the actual results and period of employment during the year of such termination, (iv) accelerated vesting of time-based equitythat would have otherwise become vested by the one year anniversary of such termination date and (v) an extended exercise period for his options. 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. On February 1, 2018, the Compensation Committee increased the base salary of Mr. Rhonemus to $250,000. In the event of a termination, Mr. Rhonemus will be entitled to any accrued but unpaid base salary and any accrued but unpaid welfare and retirementbenefits up to the termination date. In addition, if Mr. Rhonemus leaves the Company for “Good Reason” (as defined in the Rhonemus Agreement), he willalso be entitled to severance 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,” (as defined in the Rhonemus Agreement) Mr. Rhonemus will be entitledto severance equal to two weeks of base salary for each full year of service to a maximum of eight weeks of the base salary, or, if Mr. Rhonemus enters into astandard separation agreement, Mr. Rhonemus will receive continuation of base salary and health benefits, together with applicable fringe benefits asprovided until the expiration of the term or renewal term then in effect, however, that in the case of medical and dental insurance, until the expiration of 12months from the date of termination. Note 15. Business Segmentation and Geographical Distribution Since the year ended December 31, 2016, the Company has made operational changes to merge its scientific and regulatory consulting segment into corestandards and contract services segment. Additionally, with the acquisition of Healthspan in March 2017, the Company began selling consumer products thatcontain the Company's branded NIAGEN® ingredient. The Company made operational changes and began segregating its financial results for consumerproducts operations. As a result, the Company has the following three reportable segments: ● Ingredients segment develops and commercializes proprietary-based ingredient technologies and supplies these ingredients to consumers in finishedproducts or as raw materials to the manufacturers of consumer products in various industries including the nutritional supplement, food andbeverage and animal health industries. ● Consumer products segment provides directly to consumers as well as to distributors finished dietary supplement products that contain theCompany's proprietary ingredients. ● Core standards and contract services segment includes (i) supply of phytochemical reference standards, (ii) scientific and regulatory consulting and(iii) other research and development services. -85- Table of Contents On September 5, 2017, the Company completed the sale of the Lab Business which was a part of the core standards and contract services segment. Thediscontinued operations related to the Lab Business are not included in following statement of operations for business segments. The “Corporate and other” classification includes corporate items not allocated by the Company to each reportable segment. Further, there are nointersegment sales that require elimination. The Company evaluates performance and allocates resources based on reviewing gross margin by reportablesegment. Year ended December 30, 2017 Ingredients ConsumerProducts CoreStandardsandContractServices Corporate segment segment segment and other Total Net sales $11,153,371 $5,464,843 $4,583,268 $- $21,201,482 Cost of sales 5,491,920 2,189,597 3,042,660 - 10,724,177 Gross profit 5,661,451 3,275,246 1,540,608 - 10,477,305 Operating expenses: Sales and marketing 1,280,004 2,672,810 506,410 - 4,459,224 Research and development 2,903,249 1,104,132 4,007,381 General and administrative - - - 17,641,889 17,641,889 Other 745,773 - - - 745,773 Operating expenses 4,929,026 3,776,942 506,410 17,641,889 26,854,267 Operating income (loss) $732,425 $(501,696) $1,034,198 $(17,641,889) $(16,376,962) Year ended December 31, 2016 Ingredients ConsumerProducts CoreStandardsandContractServices Corporate segment segment segment and other Total Net sales $16,774,641 $- $4,890,007 $- $21,664,648 Cost of sales 7,920,516 - 3,353,598 - 11,274,114 Gross profit 8,854,125 - 1,536,409 - 10,390,534 Operating expenses: Sales and marketing 1,196,711 - 361,502 - 1,558,213 Research and development 2,487,978 - 34,790 - 2,522,768 General and administrative - - - 9,214,763 9,214,763 Operating expenses 3,684,689 - 396,292 9,214,763 13,295,744 Operating income (loss) $5,169,436 $- $1,140,117 $(9,214,763) $(2,905,210) -86- Table of Contents Year ended January 2, 2016 Ingredients ConsumerProducts CoreStandardsandContractServices Corporate segment segment segment and other Total Net sales $12,542,314 $- $5,342,572 $- $17,884,886 Cost of sales 6,664,164 - 3,686,117 - 10,350,281 Gross profit 5,878,150 - 1,656,455 - 7,534,605 Operating expenses: Sales and marketing 1,111,993 - 395,875 - 1,507,868 Research and development 891,601 - - - 891,601 General and administrative - - - 7,201,231 7,201,231 Operating expenses 2,003,594 - 395,875 7,201,231 9,600,700 Operating income (loss) $3,874,556 $- $1,260,580 $(7,201,231) $(2,066,095) At December 30, 2017 Ingredients ConsumerProducts CoreStandardsandContractServices Corporate segment segment segment and other Total Total assets $9,742,400 $3,398,800 $2,558,801 $47,023,599 $62,723,600 At December 31, 2016 Ingredients ConsumerProducts CoreStandardsandContractServices Corporate segment segment segment and other Total Total assets $13,257,289 $- $2,547,427 $3,947,352 $19,752,068 Revenues from international sources for the ingredients segment approximated $0.4 million, $0.5 million and $0.3 million for the years ended December 30,2017, December 31, 2016 and January 2, 2016, respectively. Revenues from international sources for the consumer products segment approximated $4.2million for the year ended December 30, 2017. Revenues from international sources for the core standards and contract services segment from continuingoperations approximated $1.0 million, $1.6 million and $1.8 million for the years ended December 30, 2017, December 31, 2016 and January 2, 2016,respectively. International sources which the Company generates revenue from include Europe, North America, South America, Asia, and Oceania. The Company’s long-lived assets are located within the United States. -87- Table of Contents Disclosure of major customers Major customers who accounted for more than 10% of the Company’s total sales from continuing operations were as follows: Years EndedMajor Customers 2017 2016 2015 Customer G - Related Party 19.4% * * Customer D 10.2% 11.0% * Customer C (1) * 23.9% * Customer B * * 13.6% * Represents less than 10%. (1) There is ongoing litigation with Customer C Major customers who accounted for more than 10% of the Company’s total trade receivables were as follows: Percentage of the Company'sTotal Trade ReceivablesMajor Customers At December30, 2017 At December31, 2016 Customer G - Related Party 18.1% * Customer D 13.4% 10.2%Customer C (1) 41.8% 45.8% * Represents less than 10%. (1) There is ongoing litigation with Customer C 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 PayableMajor Vendors At December30, 2017 At December31, 2016 Vendor A * 39.5%Vendor B * 20.8%Vendor C 14.5% * Vendor D 10.4% * Vendor E 10.3% * * Represents less than 10%. -88- Table of Contents Note 16. Other Expense Loss from an ongoing litigation, Elysium During the year ended December 30, 2017, the Company incurred a write-off of approximately $746,000 in gross trade receivable from Elysium related toroyalties, due to inherent uncertainty about collecting all damages sought by the Company, as well as the Company’s decision to not seek damages for anyunpaid royalty payments under the License Agreement in connection with the defense of Elysium’s claims for patent misuse and unjust enrichment. As aresult of this write-off and after further analysis, the Company made an adjustment to the total allowance amount from ($800,000) to ($500,000). Note 17. Quarterly Financial Information (unaudited) Three Months Ended April 1, 2017 July 1, 2017 September 30,2017 December 30,2017 Sales, net $3,367,647 $4,218,310 $6,084,690 $7,530,836 Cost of sales 1,749,911 2,109,109 3,169,321 3,695,837 Gross profit 1,617,736 2,109,201 2,915,369 3,834,999 Operating expenses 3,390,625 4,758,708 6,092,153 12,612,782 Operating loss (1,772,889) (2,649,507) (3,176,784) (8,777,783) Nonoperating expenses (28,349) (35,894) (44,508) (44,033) Loss from continuing operations (1,801,238) (2,685,401) (3,221,292) (8,821,816) Income (loss) from discontinued operations (127,517) (78,723) 5,358,369 - Net income (loss) $(1,928,755) $(2,764,124) $2,137,077 $(8,821,816) Basic earnings (loss) per common share $(0.05) $(0.07) $0.05 $(0.17) Diluted earnings (loss) per common share $(0.05) $(0.07) $0.04 $(0.17) Basic weighted average common shares outstanding 38,030,688 42,121,150 47,065,009 51,178,664 Diluted weighted average common shares outstanding 38,030,688 42,121,150 47,556,697 51,178,664 -89- Table of Contents Three Months Ended April 2, 2016 July 2, 2016 October 1, 2016 December 31, 2016 Sales, net $5,852,109 $7,422,470 $3,937,286 $4,452,783 Cost of sales 3,008,391 3,748,684 2,074,325 2,442,714 Gross profit 2,843,718 3,673,786 1,862,961 2,010,069 Operating expenses 2,811,652 3,514,974 2,787,123 4,181,995 Operating income (loss) 32,066 158,812 (924,162) (2,171,926) Nonoperating expenses (177,350) (448,416) (2,260) (18,360)Provision for income taxes (10,740) 4,087 3,153 3,500 Loss from continuing operations (156,024) (285,517) (923,269) (2,186,786) Income (loss) from discontinued operations 411,649 202,850 (31,121) 40,033 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 Note 18.Subsequent Events Subsequent to the year ended December 30, 2017, the Board granted a total of 470,000 stock options at an exercise price of $5.85 per share and 500,000stock options at an exercise price $5.65 per share to the Company's executive officers. -90- 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 30, 2017. 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 30, 2017. 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. Our management, including the undersigned principal executive officer and principal financial officer, assessed the effectiveness of our internal control overfinancial reporting as of December 30, 2017. 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 30, 2017, our internal control over financial reporting was effective based on those criteria. -91- Table of Contents 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 in Item 8 of this Annual Report on Form 10-K, which expresses an unqualified opinion on the effectiveness of our internalcontrol over financial reporting as of December 30, 2017. Item 9B.Other Information None. -92- 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. -93- 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 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) 2.2 Asset Purchase Agreement, dated as of August 21, 2017, by and among Covance Laboratories Inc., ChromaDex, Inc., ChromaDex Analytics,Inc., and ChromaDex Corporation (incorporated by reference from, and filed as Exhibit 2.2 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 9, 2017)*(2) 2.3 Amendment to Asset Purchase Agreement, dated as of September 5, 2017, by and among Covance Laboratories Inc., ChromaDex, Inc.,ChromaDex Analytics, Inc., and ChromaDex Corporation (incorporated by reference from, and filed as Exhibit 2.2 to the Company’sQuarterly Report on Form 10-Q filed with the Commission on November 9, 2017) 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) -94- Table of Contents 10.1 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)+ 10.2 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)+ 10.3 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)+10.4 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)+ 10.5 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)+ 10.6 Transition and Separation Agreement, dated December 15, 2017, by and between ChromaDex Corporation and Thomas C. Varvaro(incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Commission onDecember 21, 2017)+ 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) 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 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) 10.11 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) 10.12 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) 10.13 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)* 10.14 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)* 10.15 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)* 10.16 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)* 10.17 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)* 10.18 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)* -95- Table of Contents 10.19 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)* 10.20 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) 10.21 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) 10.22 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) 10.23 NIAGEN® Supply Agreement, dated July 9, 2013, by and between ChromaDex, Inc. and Thorne Research, Inc. (incorporated by referencefrom, and filed as Exhibit 99.1 to the Company’s Current Report on Form 8-K filed with the Commission on July 12, 2013) 10.24 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)* 10.25 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)* 10.26 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) 10.27 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)* 10.28 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)* 10.29 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) 10.30 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)* 10.31 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)* 10.32 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)+ 10.33 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)* 10.34 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)* 10.35 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) -96- Table of Contents 10.36 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) 10.37 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)* 10.38 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) 10.39 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)* 10.40 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)* 10.41 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)* 10.42 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)* 10.43 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)* 10.44 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) 10.45 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) 10.46 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) 10.47 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)* 10.48 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)* 10.49 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)* 10.50 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) 10.51 Business Financing Agreement, dated as of November 4, 2016, between Western Alliance Bank and ChromaDex Corporation (incorporatedby reference to, and filed as Exhibit 10.60 to the Registrant’s Annual Report on Form 10-K filed with the Commission on March 16, 2017) 10.52 First Business Financing Modification Agreement, dated as of February 16, 2017, between Western Alliance Bank and ChromaDexCorporation (incorporated by reference to, and filed as Exhibit 10.61 to the Registrant’s Annual Report on Form 10-K filed with theCommission on March 16, 2017) -97- Table of Contents 10.53 Second Business Financing Modification Agreement, dated as of March 12, 2017, between Western Alliance Bank and ChromaDexCorporation (incorporated by reference to, and filed as Exhibit 10.62 to the Registrant’s Annual Report on Form 10-K filed with theCommission on March 16, 2017) 10.54 Third Business Financing Modification Agreement, dated as of April 19, 2017, between Western Alliance Bank and ChromaDexCorporation (incorporated by reference from, and filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with theCommission on August 10, 2017) 10.55 Fourth Business Financing Modification Agreement, dated as of July 13, 2017, between Western Alliance Bank and ChromaDexCorporation (incorporated by reference from, and filed as Exhibit 10.7 to the Company’s Quarterly Report on Form 10-Q filed with theCommission on August 10, 2017) 10.56 Fifth Business Financing Modification Agreement, dated as of August 21, 2017, by and among Western Alliance Bank, ChromaDexCorporation, ChromaDex, Inc., ChromaDex Analytics, Inc. and Healthspan Research, LLC (incorporated by reference from, and filed asExhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the Commission on November 9, 2017) 10.57 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)+ 10.58 Amended and Restated Non-Employee Director Compensation Policy (incorporated by reference from, and filed as Exhibit 10.8 to theCompany’s Quarterly Report on Form 10-Q filed with the Commission on August 10, 2017)+ 10.59 Membership Interest Purchase Agreement effective as of March 12, 2017, by and among Robert Fried, Charles Brenner, Jeffrey Allen and theRegistrant (incorporated by reference from and filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed with theCommission on May 11, 2017) 10.60 Executive Employment Agreement, dated as of March 12, 2017, between Robert Fried and ChromaDex Corporation (incorporated byreference to, and filed as Exhibit 10.65 to the Registrant’s Annual Report on Form 10-K filed with the Commission on March 16, 2017)+ 10.61 Amendment to Executive Employment Agreement, dated December 20, 2017, by and between ChromaDex Corporation and Robert Fried(incorporated by reference from and filed as Exhibit 10.2 to the Company's Current Report on Form 8-K filed with the Commission onDecember 21, 2017)+ 10.62 Form of Restricted Stock Award Agreement for Robert Fried (incorporated by reference from and filed as Exhibit 10.3 to the Company'sQuarterly Report on Form 10-Q filed with the Commission on May 11, 2017)+ 10.63 Securities Purchase Agreement dated April 26, 2017, by and among the Company and the Purchasers (incorporated by reference from andfiled as Exhibit 99.1 to the Company's Current Report on Form 8-K filed with the Commission on April 27, 2017) 10.64 Registration Rights Agreement, dated April 29, 2017, by and among the Company and the Purchasers (incorporated by reference from andfiled as Exhibit 99.1 to the Company's Current Report on Form 8-K filed with the Commission on May 2, 2017) 10.65 First Amendment to Securities Purchase Agreement, dated May 24, 2017, by and among the Company and the Purchasers (incorporated byreference from and filed as Exhibit 99.1 to the Company's Current Report on Form 8-K filed with the Commission on May 25, 2017) 10.66 ChromaDex Corporation 2017 Equity Incentive Plan, as amended ❖+ 10.67 License Agreement dated June 9, 2017, by and between ChromaPharma, Inc. and the Scripps Research Institute (incorporated by referencefrom and filed as Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q filed with the Commission on August 10, 2017)* 10.68 Research Funding Agreement dated June 9, 2017, by and between ChromaPharma, Inc. and the Scripps Research Institute (incorporated byreference from and filed as Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q filed with the Commission on August 10, 2017)* 10.69 Executive Employment Agreement, dated October 5, 2017, by and between Kevin M. Farr and ChromaDex Corporation (incorporated byreference from and filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed with the Commission on October 10, 2017)+ -98- Table of Contents 10.70 Securities Purchase Agreement dated November 3, 2017, by and among the Company and the Purchasers (incorporated by reference fromand filed as Exhibit 99.1 to the Company's Current Report on Form 8-K filed with the Commission on November 6, 2017) 10.71 Registration Rights Agreement, dated November 3, 2017, by and among the Company and the Purchasers (incorporated by reference fromand filed as Exhibit 99.2 to the Company's Current Report on Form 8-K filed with the Commission on November 6, 2017) 10.72 Executive Employment Agreement, dated as of January 22, 2018, by and between Mark Friedman 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. (2)Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. ChromaDex Corporation undertakes to furnish supplemental copies of anyof the omitted schedules upon request by the Securities and Exchange Commission; provided, however, that ChromaDex Corporation may requestconfidential treatment pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, for any schedule so furnished. + 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 Exhibit havebeen omitted and are marked by an asterisk. Item 16.Form 10-K Summary None. -99- 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 15th day of March 2018. 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 Kevin Farr,and each of them, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or hername, place and 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 all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-factand agents, 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 connectiontherewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact andagents, or either of them, 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 15, 2018Frank L. Jaksch Jr. (Principal Executive Officer) /s/ KEVIN FARR Chief Financial Officer March 15, 2018Kevin Farr (Principal Financial and Accounting Officer) /s/ ROBERT FRIED President, Chief Operating Officer and Director March 15, 2018Robert Fried /s/ STEPHEN ALLEN Chairman of the Board and Director March 15, 2018Stephen Allen /s/ STEPHEN BLOCK Director March 15, 2018Stephen Block /s/ JEFF BAXTER Director March 15, 2018Jeff Baxter /s/ KURT GUSTAFSON Director March 15, 2018Kurt Gustafson /s/ STEVEN RUBIN Director March 15, 2018Steven Rubin /s/ TONY LAU Director March 15, 2018Tony Lau Director March 15, 2018Wendy Yu -100- 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. 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  Exhibit 10.66ChromaDex Corporation2017 Equity Incentive Plan Adopted by the Board of Directors: April 6, 2017Approved by the Stockholders: June 20, 2017Amended by the Board of Directors: January 21, 2018 1. General. (a) Successor to and Continuation of Prior Plan. The Plan is intended as the successor to and continuation of the ChromaDex Corporation SecondAmended and Restated 2007 Equity Incentive Plan, (the “2007 Plan”). Following the Effective Date, no additional awards may be granted under the 2007Plan. In addition, from and after 12:01 a.m. Pacific Time on the Effective Date, all outstanding awards granted under the 2007 Plan and the ChromaDex, Inc.2000 Non-Qualified Incentive Stock Option Plan (the “2000 Plan” and together with the 2007 Plan, the “Prior Plans”) will remain subject to the terms of the2007 Plan or 2000 Plan, as applicable; provided, however, that the following shares of Common Stock subject to any outstanding stock award granted underthe Prior Plans (collectively, the “Prior Plans’ Returning Shares”) will immediately be added to the Share Reserve (as defined in Section 3(a)) as and whensuch shares become Prior Plans’ Returning Shares and become available for issuance pursuant to Awards granted under this Plan: (i) any shares subject tosuch stock award that are not issued because such stock award or any portion thereof expires or otherwise terminates without all of the shares covered by suchstock award having been issued; (ii) any shares subject to such stock award that are not issued because such stock award or any portion thereof is settled incash; (iii) any shares issued pursuant to such stock award that are forfeited back to or repurchased by the Company because of the failure to meet acontingency or condition required for the vesting of such shares; and (iv) any shares that are reacquired, withheld (or not issued) to satisfy a tax withholdingobligation in connection with an award or to satisfy the purchase price or exercise price of a stock award. All Awards granted on or after 12:01 a.m. PacificTime on the Effective Date will be subject to the terms of this Plan. (b) Eligible Award Recipients. Employees, Directors and Consultants are eligible to receive Awards. The persons eligible to receive InducementAwards are Employees who meet the criteria set forth in Section 3(f). (c) Available Awards. The Plan provides for the grant of the following types of Awards: (i) Incentive Stock Options; (ii) Nonstatutory StockOptions; (iii) Stock Appreciation Rights; (iv) Restricted Stock Awards; (v) Restricted Stock Unit Awards; (vi) Performance Stock Awards; (vii) PerformanceCash Awards; (viii) Inducement Awards; and (ix) Other Stock Awards. (d) Purpose. The Plan, through the granting of Awards, is intended to help the Company secure and retain the services of eligible award recipients,provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate and provide a means by which the eligiblerecipients may benefit from increases in value of the Common Stock. -1- 2. Administration. (a) Administration by Board. The Board will administer the Plan. The Board may delegate administration of the Plan to a Committee orCommittees, as provided in Section 2(c). Notwithstanding anything to the contrary set forth herein, only an Inducement Committee has the power to grantInducement Awards. (b) Powers of Board. The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan: (i) To determine: (A) who will be granted Awards; (B) when and how each Award will be granted; (C) what type of Award will be granted;(D) the provisions of each Award (which need not be identical), including when a Participant will be permitted to exercise or otherwise receive cash orCommon Stock under the Award; (E) the number of shares of Common Stock subject to, or the cash value of, an Award; and (F) the Fair Market Valueapplicable to a Stock Award. (ii) To construe and interpret the Plan and Awards granted under it, and to establish, amend and revoke rules and regulations foradministration of the Plan and Awards. The Board, in the exercise of these powers, may correct any defect, omission or inconsistency in the Plan or in anyAward Agreement or in the written terms of a Performance Cash Award, in a manner and to the extent it will deem necessary or expedient to make the Plan orAward fully effective. (iii) To settle all controversies regarding the Plan and Awards granted under it. (iv) To accelerate, in whole or in part, the time at which an Award may be exercised or vest (or at which cash or shares of Common Stockmay be issued). (v) To suspend or terminate the Plan at any time. Except as otherwise provided in the Plan (including Section 2(b)(viii)) or an AwardAgreement, suspension or termination of the Plan will not materially impair a Participant’s rights under an outstanding Award without his or her writtenconsent. (vi) To amend the Plan in any respect the Board deems necessary or advisable, including, without limitation, by adopting amendmentsrelating to Incentive Stock Options and certain nonqualified deferred compensation under Section 409A of the Code and/or to make the Plan or Awardsgranted under the Plan compliant with the requirements for Incentive Stock Options or exempt from or compliant with the requirements for nonqualifieddeferred compensation under Section 409A of the Code, subject to the limitations, if any, of applicable law. If required by applicable law or listingrequirements, and except as provided in Section 9(a) relating to Capitalization Adjustments, the Company will seek stockholder approval of any amendmentof the Plan that (A) materially increases the number of shares of Common Stock available for issuance under the Plan, (B) materially expands the class ofindividuals eligible to receive Awards under the Plan, (C) materially increases the benefits accruing to Participants under the Plan, (D) materially reduces theprice at which shares of Common Stock may be issued or purchased under the Plan, (E) materially extends the term of the Plan, or (F) materially expands thetypes of Awards available for issuance under the Plan. Except as otherwise provided in the Plan (including Section 2(b)(viii)) or an Award Agreement, noamendment of the Plan will materially impair a Participant’s rights under an outstanding Award without his or her written consent. -2- (vii) To submit any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended tosatisfy the requirements of (A) Section 422 of the Code regarding incentive stock options or (B) Rule 16b-3. (viii) To approve forms of Award Agreements for use under the Plan and to amend the terms of any one or more outstanding Awards,including, but not limited to, amendments to provide terms more favorable to the Participant than previously provided in the Award Agreement, subject toany specified limits in the Plan that are not subject to Board discretion; provided, however, that except as otherwise provided in the Plan (including thisSection 2(b)(viii)) or an Award Agreement, the Board may not amend the terms of an outstanding Award if the Board, in its sole discretion, determines thatthe amendment, taken as a whole, will materially impair the Participant’s rights under such Award without his or her written consent. Notwithstanding the foregoing or anything in the Plan to the contrary, unless prohibited by applicable law, the Board may amend the termsof any outstanding Award or the Plan, or may suspend or terminate the Plan, without the affected Participant’s consent, (A) to maintain the qualifiedstatus of the Award as an Incentive Stock Option under Section 422 of the Code, (B) to change the terms of an Incentive Stock Option, if suchchange results in impairment of the Award solely because it impairs the qualified status of the Award as an Incentive Stock Option under Section422 of the Code, (C) to clarify the manner of exemption from, or to bring the Award or the Plan into compliance with, Section 409A of the Code, or(D) to comply with other applicable laws or listing requirements. (ix) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests ofthe Company and that are not in conflict with the provisions of the Plan or Awards. (x) To adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Employees, Directors orConsultants who are foreign nationals or employed outside the United States (provided that Board approval will not be necessary for immaterialmodifications to the Plan or any Award Agreement that are required for compliance with the laws of the relevant foreign jurisdiction). (c) Delegation to Committee. (i) General. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of thePlan is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Boardthat have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee any of the administrative powers theCommittee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee, as applicable). Anydelegation of administrative powers will be reflected in resolutions, not inconsistent with the provisions of the Plan, adopted from time to time by the Boardor Committee (as applicable). The Committee may, at any time, abolish the subcommittee and/or revest in the Committee any powers delegated to thesubcommittee. The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some orall of the powers previously delegated. -3- (ii) Section 162(m) and Rule 16b-3 Compliance. The Committee may consist solely of two (2) or more Outside Directors, in accordancewith Section 162(m) of the Code, or solely of two (2) or more Non-Employee Directors, in accordance with Rule 16b-3. (iii) Inducement Awards. Notwithstanding any other provision of the Plan to the contrary, all Inducement Awards must be granted by anInducement Committee. (d) Delegation to an Officer. The Board may delegate to one (1) or more Officers the authority to do one or both of the following: (i) designateEmployees who are not Officers to be recipients of Options and SARs (and, to the extent permitted by applicable law, other Stock Awards) and, to the extentpermitted by applicable law, the terms of such Awards; and (ii) determine the number of shares of Common Stock to be subject to such Stock Awards grantedto such Employees; provided, however, that the Board resolutions regarding such delegation will specify the total number of shares of Common Stock thatmay be subject to the Stock Awards granted by such Officer and that such Officer may not grant a Stock Award to himself or herself. Any such Stock Awardswill be granted on the form of Award Agreement most recently approved for use by the Committee or the Board, unless otherwise provided in the resolutionsapproving the delegation of authority. The Board may not delegate authority to an Officer who is acting solely in the capacity of an Officer (and not also as aDirector) to determine the Fair Market Value pursuant to Section 13(y)(iii). (e) Effect of Board’s Decision. All determinations, interpretations and constructions made by the Board in good faith will not be subject to reviewby any person and will be final, binding and conclusive on all persons. (f) Cancellation and Re-Grant of Stock Awards. Neither the Board nor any Committee will have the authority to (i) reduce the exercise or strikeprice of any outstanding Option or SAR under the Plan or (ii) cancel any outstanding Option or SAR that has an exercise or strike price greater than the then-current Fair Market Value of the Common Stock in exchange for cash or other Stock Awards under the Plan, unless the stockholders of the Company haveapproved such an action within twelve (12) months prior to such an event. 3. Shares Subject to the Plan. (a) Share Reserve. (i) Subject to Section 9(a) relating to Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issuedpursuant to Stock Awards from and after the Effective Date will not exceed 9,293,960 shares, which is the sum of (A) 3,000,000 new shares, plus (B) the PriorPlans’ Returning Shares, if any, which become available for grant under this Plan from time to time (such aggregate number of shares described in (A) and (B)above, the “Share Reserve”), plus (C) 500,000 shares that may be issued pursuant to Inducement Awards granted under Section 3(f) of the Plan. -4- (ii) For clarity, the Share Reserve in this Section 3(a) is a limitation on the number of shares of Common Stock that may be issued pursuantto the Plan. Accordingly, this Section 3(a) does not limit the granting of Stock Awards except as provided in Section 7(a). Shares may be issued in connectionwith a merger or acquisition as permitted by NASDAQ Listing Rule 5635(c) or, if applicable, NYSE Listed Company Manual Section 303A.08, AMEXCompany Guide Section 711 or other applicable rule, and such issuance will not reduce the number of shares available for issuance under the Plan. (b) Reversion of Shares to the Share Reserve. If a Stock Award or any portion thereof (i) expires or otherwise terminates without all of the sharescovered by such Stock Award having been issued or (ii) is settled in cash (i.e., the Participant receives cash rather than stock), such expiration, termination orsettlement will not reduce (or otherwise offset) the number of shares of Common Stock that may be available for issuance under the Plan. If any shares ofCommon Stock issued pursuant to a Stock Award are forfeited back to or repurchased by the Company because of the failure to meet a contingency orcondition required to vest such shares in the Participant, then the shares that are forfeited or repurchased will revert to and again become available forissuance under the Plan. Any shares reacquired by the Company in satisfaction of tax withholding obligations on a Stock Award or as consideration for theexercise or purchase price of a Stock Award will again become available for issuance under the Plan. Notwithstanding the foregoing, any Inducement Sharesthat become available for issuance under the Plan pursuant to this subsection 3(b) will only become available for issuance pursuant to Inducement Awards. (c) Incentive Stock Option Limit. Subject to the Share Reserve and Section 9(a) relating to Capitalization Adjustments, the aggregate maximumnumber of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options will be 17,587,920 shares of Common Stock. (d) Reserved. (e) Limits on Grants to Non-Employee Directors. The maximum number of shares of Common Stock subject to Stock Awards granted under thePlan or otherwise during any one calendar year to any Non-Employee Director, taken together with any cash fees paid by the Company to such Non-Employee Director during such calendar year for service on the Board, will not exceed six hundred thousand dollars ($600,000) in total value (calculatingthe value of any such Stock Awards based on the grant date fair value of such Stock Awards for financial reporting purposes), or, with respect to the calendaryear in which a Non-Employee Director is first appointed or elected to the Board, nine hundred thousand dollars ($900,000). (f) Inducement Shares. This subsection 3(f) will apply with respect to the shares reserved under this Plan by action of the Board (or a committeethereof) to be used exclusively for the grant of Inducement Awards in compliance with NASDAQ Listing Rule 5635(c)(4) (the “Inducement Shares”).Notwithstanding anything to the contrary in this Plan, an Inducement Award may be granted only to an Employee who has not previously been an Employeeor a non-Employee Director of the Company or an Affiliate, or following a bona fide period of non-employment, as an inducement material to theindividual’s entering into employment with the Company within the meaning of Rule 5635(c)(4) of the NASDAQ Listing Rules. -5- (g) Source of Shares. The stock issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including sharesrepurchased by the Company on the open market or otherwise. 4. Eligibility. (a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to employees of the Company or a “parent corporation” or“subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and 424(f) of the Code). Stock Awards other than Incentive Stock Options maybe granted to Employees, Directors and Consultants; provided, however, that Stock Awards may not be granted to Employees, Directors and Consultants whoare providing Continuous Service only to any “parent” of the Company, as such term is defined in Rule 405, unless (i) the stock underlying such StockAwards is treated as “service recipient stock” under Section 409A of the Code (for example, because the Stock Awards are granted pursuant to a corporatetransaction such as a spin off transaction) or (ii) the Company, in consultation with its legal counsel, has determined that such Stock Awards are otherwiseexempt from or alternatively comply with Section 409A of the Code. (b) Ten Percent Stockholders. A Ten Percent Stockholder will not be granted an Incentive Stock Option unless the exercise price of such Option isat least one hundred ten percent (110%) of the Fair Market Value on the date of grant and the Option is not exercisable after the expiration of five (5) yearsfrom the date of grant. 5. Provisions Relating to Options and Stock Appreciation Rights. Each Option or SAR Agreement will be in such form and will contain such terms and conditions as the Board deems appropriate. All Options will beseparately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate orcertificates will be issued for shares of Common Stock purchased on exercise of each type of Option. If an Option is not specifically designated as anIncentive Stock Option, or if an Option is designated as an Incentive Stock Option but some portion or all of the Option fails to qualify as an Incentive StockOption under the applicable rules, then the Option (or portion thereof) will be a Nonstatutory Stock Option. The terms and conditions of separate Option orSAR Agreements need not be identical; provided, however, that each Award Agreement will conform to (through incorporation of the provisions hereof byreference in the applicable Award Agreement or otherwise) the substance of each of the following provisions: (a) Term. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, no Option or SAR will be exercisable after the expiration often (10) years from the date of its grant or such shorter period specified in the Award Agreement. (b) Exercise Price. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, the exercise or strike price of each Option or SARwill be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option or SAR on the date the Award isgranted. Notwithstanding the foregoing, an Option or SAR may be granted with an exercise or strike price lower than one hundred percent (100%) of the FairMarket Value of the Common Stock subject to the Award if such Award is granted pursuant to an assumption of or substitution for another option or stockappreciation right pursuant to a Corporate Transaction and in a manner consistent with the provisions of Section 409A of the Code and, if applicable, Section424(a) of the Code. Each SAR will be denominated in shares of Common Stock equivalents. -6- (c) Purchase Price for Options. The purchase price of Common Stock acquired pursuant to the exercise of an Option may be paid, to the extentpermitted by applicable law and as determined by the Board in its sole discretion, by any combination of the methods of payment set forth below. The Boardwill have the authority to grant Options that do not permit all of the following methods of payment (or that otherwise restrict the ability to use certainmethods) and to grant Options that require the consent of the Company to use a particular method of payment. The permitted methods of payment are asfollows: (i) by cash (including electronic funds transfers), check, bank draft or money order payable to the Company; (ii) pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of thestock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregateexercise price to the Company from the sales proceeds; (iii) by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock; (iv) if an Option is a Nonstatutory Stock Option, by a “net exercise” arrangement pursuant to which the Company will reduce the number ofshares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exerciseprice; provided, however, that the Company will accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregateexercise price not satisfied by such reduction in the number of whole shares to be issued. Shares of Common Stock will no longer be subject to an Option andwill not be exercisable thereafter to the extent that (A) shares issuable upon exercise are used to pay the exercise price pursuant to the “net exercise,” (B)shares are delivered to the Participant as a result of such exercise, and (C) shares are withheld to satisfy tax withholding obligations; or (v) in any other form of legal consideration that may be acceptable to the Board and specified in the applicable Award Agreement. (d) Exercise and Payment of a SAR. To exercise any outstanding SAR, the Participant must provide written notice of exercise to the Company incompliance with the provisions of the Award Agreement evidencing such SAR. The appreciation distribution payable on the exercise of a SAR will be notgreater than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the SAR) of a number of shares of CommonStock equal to the number of Common Stock equivalents in which the Participant is vested under such SAR, and with respect to which the Participant isexercising the SAR on such date, over (B) the aggregate strike price of the number of Common Stock equivalents with respect to which the Participant isexercising the SAR on such date. The appreciation distribution may be paid in Common Stock, in cash, in any combination of the two or in any other form ofconsideration, as determined by the Board and contained in the Award Agreement evidencing such SAR. -7- (e) Transferability of Options and SARs. The Board may, in its sole discretion, impose such limitations on the transferability of Options and SARsas the Board will determine. In the absence of such a determination by the Board to the contrary, the following restrictions on the transferability of Optionsand SARs will apply: (i) Restrictions on Transfer. An Option or SAR will not be transferable, except by will or by the laws of descent and distribution (orpursuant to Sections 5(e)(ii) and 5(e)(iii)), and will be exercisable during the lifetime of the Participant only by the Participant. The Board may permit transferof the Option or SAR in a manner that is not prohibited by applicable tax and securities laws. Except as explicitly provided in the Plan, neither an Option nora SAR may be transferred for consideration. (ii) Domestic Relations Orders. Subject to the approval of the Board or a duly authorized Officer, an Option or SAR may be transferredpursuant to the terms of a domestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by TreasuryRegulations Section 1.421-1(b)(2). If an Option is an Incentive Stock Option, such Option may be deemed to be a Nonstatutory Stock Option as a result ofsuch transfer. (iii) Beneficiary Designation. Subject to the approval of the Board or a duly authorized Officer, a Participant may, by delivering writtennotice to the Company, in a form approved by the Company (or the designated broker), designate a third party who, upon the death of the Participant, willthereafter be entitled to exercise the Option or SAR and receive the Common Stock or other consideration resulting from such exercise. In the absence of sucha designation, upon the death of the Participant, the executor or administrator of the Participant’s estate will be entitled to exercise the Option or SAR andreceive the Common Stock or other consideration resulting from such exercise. However, the Company may prohibit designation of a beneficiary at any time,including due to any conclusion by the Company that such designation would be inconsistent with the provisions of applicable laws. (f) Vesting Generally. The total number of shares of Common Stock subject to an Option or SAR may vest and become exercisable in periodicinstallments that may or may not be equal. The Option or SAR may be subject to such other terms and conditions on the time or times when it may or may notbe exercised (which may be based on the satisfaction of Performance Goals or other criteria) as the Board may deem appropriate. The vesting provisions ofindividual Options or SARs may vary. The provisions of this Section 5(f) are subject to any Option or SAR provisions governing the minimum number ofshares of Common Stock as to which an Option or SAR may be exercised. (g) Termination of Continuous Service. Except as otherwise provided in the applicable Award Agreement or other written agreement between aParticipant and the Company or an Affiliate, if a Participant’s Continuous Service terminates (other than for Cause and other than upon the Participant’sdeath or Disability), the Participant may exercise his or her Option or SAR (to the extent that the Participant was entitled to exercise such Option or SAR as ofthe date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the date that is three (3) months following suchtermination of Continuous Service (or such longer or shorter period specified in the Award Agreement), and (ii) the expiration of the term of the Option orSAR as set forth in the Award Agreement. If, after such termination of Continuous Service, the Participant does not exercise his or her Option or SAR (asapplicable) within the applicable time frame, the Option or SAR (as applicable) will terminate. -8- (h) Extension of Termination Date. Except as otherwise provided in the applicable Award Agreement or other written agreement between aParticipant and the Company or an Affiliate, if the exercise of an Option or SAR following the termination of a Participant’s Continuous Service (other thanfor Cause and other than upon the Participant’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stockwould violate the registration requirements under the Securities Act, then the Option or SAR will terminate on the earlier of (i) the expiration of a total periodof time (that need not be consecutive) equal to the applicable post-termination exercise period after the termination of the Participant’s Continuous Serviceduring which the exercise of the Option or SAR would not be in violation of such registration requirements, or (ii) the expiration of the term of the Option orSAR as set forth in the applicable Award Agreement. In addition, except as otherwise provided in the applicable Award Agreement or other written agreementbetween a Participant and the Company or an Affiliate, if the sale of any Common Stock received upon exercise of an Option or SAR following thetermination of a Participant’s Continuous Service (other than for Cause) would violate the Company’s insider trading policy, then the Option or SAR willterminate on the earlier of (i) the expiration of a total period of time (that need not be consecutive) equal to the applicable post-termination exercise periodafter the termination of the Participant’s Continuous Service during which the sale of the Common Stock received upon exercise of the Option or SAR wouldnot be in violation of the Company’s insider trading policy, or (ii) the expiration of the term of the Option or SAR as set forth in the applicable AwardAgreement. (i) Disability of Participant. Except as otherwise provided in the applicable Award Agreement or other written agreement between a Participant andthe Company or an Affiliate, if a Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise his or herOption or SAR (to the extent that the Participant was entitled to exercise such Option or SAR as of the date of termination of Continuous Service), but onlywithin such period of time ending on the earlier of (i) the date that is twelve (12) months following such termination of Continuous Service (or such longer orshorter period specified in the Award Agreement), and (ii) the expiration of the term of the Option or SAR as set forth in the Award Agreement. If, after suchtermination of Continuous Service, the Participant does not exercise his or her Option or SAR (as applicable) within the applicable time frame, the Option orSAR (as applicable) will terminate. (j) Death of Participant. Except as otherwise provided in the applicable Award Agreement or other written agreement between a Participant and theCompany or an Affiliate, if (i) a Participant’s Continuous Service terminates as a result of the Participant’s death, or (ii) a Participant dies within the period (ifany) specified in the Award Agreement for exercisability after the termination of the Participant’s Continuous Service (for a reason other than death), then theParticipant’s Option or SAR may be exercised (to the extent that the Participant was entitled to exercise such Option or SAR as of the date of death) by theParticipant’s estate, by a person who acquired the right to exercise the Option or SAR by bequest or inheritance, or by a person designated to exercise theOption or SAR upon the Participant’s death, but only within such period of time ending on the earlier of (i) the date that is eighteen (18) months followingthe date of death (or such longer or shorter period specified in the Award Agreement), and (ii) the expiration of the term of the Option or SAR as set forth inthe Award Agreement. If, after the Participant’s death, the Option or SAR (as applicable) is not exercised within the applicable time frame, the Option or SAR(as applicable) will terminate. -9- (k) Termination for Cause. Except as explicitly provided otherwise in the applicable Award Agreement or other individual written agreementbetween a Participant and the Company or an Affiliate, if a Participant’s Continuous Service is terminated for Cause, the Participant’s Option or SAR willterminate immediately upon such termination of Continuous Service, and the Participant will be prohibited from exercising his or her Option or SAR fromand after the time of such termination of Continuous Service. (l) Non-Exempt Employees. If an Option or SAR is granted to an Employee who is a non-exempt employee for purposes of the Fair Labor StandardsAct of 1938, as amended, the Option or SAR will not be first exercisable for any shares of Common Stock until at least six (6) months following the date ofgrant of the Option or SAR (although the Award may vest prior to such date). Consistent with the provisions of the Worker Economic Opportunity Act, (i) ifsuch non-exempt employee dies or suffers a Disability, (ii) upon a Corporate Transaction in which such Option or SAR is not assumed, continued orsubstituted, (iii) upon a Change in Control, or (iv) upon the Participant’s retirement (as such term may be defined in the Participant’s Award Agreement, inanother written agreement between the Participant and the Company or an Affiliate, or, if no such definition, in accordance with the Company’s then currentemployment policies and guidelines), the vested portion of any Options and SARs may be exercised earlier than six (6) months following the date of grant.The foregoing provision is intended to operate so that any income derived by a non-exempt employee in connection with the exercise or vesting of anOption or SAR will be exempt from his or her regular rate of pay. To the extent permitted and/or required for compliance with the Worker EconomicOpportunity Act to ensure that any income derived by a non-exempt employee in connection with the exercise, vesting or issuance of any shares under anyother Stock Award will be exempt from the employee’s regular rate of pay, the provisions of this Section 5(l) will apply to all Stock Awards and are herebyincorporated by reference into such Stock Award Agreements. 6. Provisions of Stock Awards Other than Options and SARs. (a) Restricted Stock Awards. Each Restricted Stock Award Agreement will be in such form and will contain such terms and conditions as the Boarddeems appropriate. To the extent consistent with the Company’s bylaws, at the Board’s election, shares of Common Stock underlying a Restricted StockAward may be (i) held in book entry form subject to the Company’s instructions until any restrictions relating to the Restricted Stock Award lapse, or(ii) evidenced by a certificate, which certificate will be held in such form and manner as determined by the Board. The terms and conditions of separateRestricted Stock Award Agreements need not be identical; provided, however, that each Restricted Stock Award Agreement will conform to (throughincorporation of the provisions hereof by reference in the applicable Award Agreement or otherwise) the substance of each of the following provisions: -10- (i) Consideration. A Restricted Stock Award may be awarded in consideration for (A) cash (including electronic funds transfers), check,bank draft or money order payable to the Company, (B) past services to the Company or an Affiliate, or (C) any other form of legal consideration (includingfuture services) that may be acceptable to the Board, in its sole discretion, and permissible under applicable law. (ii) Vesting. Shares of Common Stock awarded under a Restricted Stock Award Agreement may be subject to forfeiture to or repurchase bythe Company in accordance with a vesting schedule to be determined by the Board. (iii) Termination of Continuous Service. If a Participant’s Continuous Service terminates, the Company may receive through a forfeiturecondition or a repurchase right any or all of the shares of Common Stock held by the Participant that have not vested as of the date of such termination underthe terms of the Participant’s Restricted Stock Award Agreement. (iv) Transferability. Rights to acquire shares of Common Stock under a Restricted Stock Award Agreement will be transferable by theParticipant only upon such terms and conditions as are set forth in the Restricted Stock Award Agreement, as the Board will determine in its sole discretion,so long as Common Stock awarded under the Restricted Stock Award Agreement remains subject to the terms of the Restricted Stock Award Agreement. (v) Dividends. A Restricted Stock Award Agreement may provide that any dividends paid on Restricted Stock will be subject to the samevesting and forfeiture restrictions as apply to the shares subject to the Restricted Stock Award to which they relate. (b) Restricted Stock Unit Awards. Each Restricted Stock Unit Award Agreement will be in such form and will contain such terms and conditions asthe Board deems appropriate. The terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical; provided, however, thateach Restricted Stock Unit Award Agreement will conform to (through incorporation of the provisions hereof by reference in the applicable AwardAgreement or otherwise) the substance of each of the following provisions: (i) Consideration. At the time of grant of a Restricted Stock Unit Award, the Board will determine the consideration, if any, to be paid bythe Participant upon delivery of each share of Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by theParticipant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of legal consideration that may be acceptableto the Board, in its sole discretion, and permissible under applicable law. (ii) Vesting. At the time of the grant of a Restricted Stock Unit Award, the Board may impose such restrictions on or conditions to thevesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate. (iii) Payment. A Restricted Stock Unit Award may be settled by the delivery of shares of Common Stock, their cash equivalent, anycombination thereof or in any other form of consideration, as determined by the Board and contained in the Restricted Stock Unit Award Agreement. -11- (iv) Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the Board, as it deems appropriate, may impose suchrestrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject to the Restricted Stock Unit Award to atime after the vesting of the Restricted Stock Unit Award. (v) Dividend Equivalents. Dividend equivalents may be credited in respect of shares of Common Stock covered by a Restricted Stock UnitAward, as determined by the Board and contained in the Restricted Stock Unit Award Agreement. At the sole discretion of the Board, such dividendequivalents may be converted into additional shares of Common Stock covered by the Restricted Stock Unit Award in such manner as determined by theBoard. Any additional shares covered by the Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all of the sameterms and conditions of the underlying Restricted Stock Unit Award Agreement to which they relate. (vi) Termination of Continuous Service. Except as otherwise provided in the applicable Restricted Stock Unit Award Agreement or otherwritten agreement between a Participant and the Company or an Affiliate, if a Participant’s Continuous Service terminates, any portion of the Participant’sRestricted Stock Unit Award that has not vested as of the date of such termination will be forfeited upon such termination. (c) Performance Awards. (i) Performance Stock Awards. A Performance Stock Award is a Stock Award that is payable (including that may be granted, vest or beexercised) contingent upon the attainment during a Performance Period of specified Performance Goals. A Performance Stock Award may, but need not,require the Participant’s completion of a specified period of Continuous Service. The length of any Performance Period, the Performance Goals to be achievedduring the Performance Period, and the measure of whether and to what degree such Performance Goals have been attained will be conclusively determinedby the Committee (or, to the extent that an Award is not intended to qualify as “performance-based compensation” under Section 162(m) of the Code, theBoard or the Committee), in its sole discretion. In addition, to the extent permitted by applicable law and the applicable Award Agreement, the Board or theCommittee may determine that cash may be used in payment of Performance Stock Awards. (ii) Performance Cash Awards. A Performance Cash Award is a cash award that is payable contingent upon the attainment during aPerformance Period of specified Performance Goals. A Performance Cash Award may, but need not, require the Participant’s completion of a specified periodof Continuous Service. The length of any Performance Period, the Performance Goals to be achieved during the Performance Period, and the measure ofwhether and to what degree such Performance Goals have been attained will be conclusively determined by the Committee (or, to the extent that an Award isnot intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Board or the Committee), in its sole discretion. TheBoard or the Committee may specify the form of payment of Performance Cash Awards, which may be cash or other property, or may provide for a Participantto have the option for his or her Performance Cash Award, or such portion thereof as the Board or the Committee may specify, to be paid in whole or in part incash or other property. -12- (iii) Committee and Board Discretion. With respect to any Performance Stock Award or Performance Cash Award, the Committee (or, tothe extent that an Award is not intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Board or the Committee)retains the discretion to (A) reduce or eliminate the compensation or economic benefit due upon attainment of the Performance Goals on the basis of anyconsiderations as the Committee or Board (as applicable), in its sole discretion, may determine and (B) define the manner of calculating the PerformanceCriteria it selects to use for a Performance Period. (iv) Section 162(m) Compliance. With respect to any Award intended to qualify as “performance-based compensation” under Section162(m) of the Code, unless otherwise permitted under Section 162(m) of the Code, the Committee will establish the Performance Goals applicable to, and theformula for calculating the amount payable under, the Award no later than the earlier of (A) the date ninety (90) days after the commencement of theapplicable Performance Period, and (B) the date on which twenty-five percent (25%) of the Performance Period has elapsed, and in any event at a time whenthe achievement of the applicable Performance Goals remains substantially uncertain. Prior to the payment of any compensation under an Award intended toqualify as “performance-based compensation” under Section 162(m) of the Code, the Committee will certify the extent to which any Performance Goals andany other material terms under such Award have been satisfied (other than in cases where such Performance Goals or terms relate solely to the increase in thevalue of the Common Stock). (d) Other Stock Awards. Other forms of Stock Awards valued in whole or in part by reference to, or otherwise based on, Common Stock, includingthe appreciation in value thereof (e.g., options or stock appreciation rights with an exercise price or strike price less than one hundred percent (100%) of theFair Market Value of the Common Stock at the time of grant) may be granted either alone or in addition to Stock Awards granted under Section 5 and thisSection 6. Subject to the provisions of the Plan, the Board will have sole and complete authority to determine the persons to whom and the time or times atwhich such Other Stock Awards will be granted, the number of shares of Common Stock (or the cash equivalent thereof) to be granted pursuant to such OtherStock Awards and all other terms and conditions of such Other Stock Awards. 7. Covenants of the Company. (a) Availability of Shares. The Company will keep available at all times the number of shares of Common Stock reasonably required to satisfy then-outstanding Stock Awards. (b) Securities Law Compliance. The Company will seek to obtain from each regulatory commission or agency having jurisdiction over the Plan theauthority required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards; provided, however, that thisundertaking will not require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant toany such Stock Award. If, after reasonable efforts and at a reasonable cost, the Company is unable to obtain from any such regulatory commission or agencythe authority that counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company will be relievedfrom any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained. A Participantwill not be eligible for the grant of an Award or the subsequent issuance of cash or Common Stock pursuant to the Award if such grant or issuance would bein violation of any applicable securities law. -13- (c) No Obligation to Notify or Minimize Taxes. The Company will have no duty or obligation to any Participant to advise such holder as to thetime or manner of exercising a Stock Award. Furthermore, the Company will have no duty or obligation to warn or otherwise advise such holder of a pendingtermination or expiration of an Award or a possible period in which the Award may not be exercised. The Company has no duty or obligation to minimize thetax consequences of an Award to the holder of such Award. 8. Miscellaneous. (a) Use of Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common Stock issued pursuant to Stock Awards willconstitute general funds of the Company. (b) Corporate Action Constituting Grant of Awards. Corporate action constituting a grant by the Company of an Award to any Participant will bedeemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument, certificate or letterevidencing the Award is communicated to, or actually received or accepted by, the Participant. In the event that the corporate records (e.g., Board consents,resolutions or minutes) documenting the corporate action constituting the grant contain terms (e.g., exercise price, vesting schedule or number of shares) thatare inconsistent with those in the Award Agreement or related grant documents as a result of a clerical error in the papering of the Award Agreement or relatedgrant documents, the corporate records will control and the Participant will have no legally binding right to the incorrect term in the Award Agreement orrelated grant documents. (c) Stockholder Rights. No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares ofCommon Stock subject to an Award unless and until (i) such Participant has satisfied all requirements for exercise of, or the issuance of shares of CommonStock under, the Award pursuant to its terms, and (ii) the issuance of the Common Stock subject to such Award has been entered into the books and records ofthe Company. (d) No Employment or Other Service Rights. Nothing in the Plan, any Award Agreement or any other instrument executed thereunder or inconnection with any Award granted pursuant thereto will confer upon any Participant any right to continue to serve the Company or an Affiliate in thecapacity in effect at the time the Award was granted or will affect the right of the Company or an Affiliate to terminate (i) the employment of an Employeewith or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company oran Affiliate, or (iii) the service of a Director pursuant to the bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of thestate in which the Company or the Affiliate is incorporated, as the case may be. (e) Change in Time Commitment. In the event a Participant’s regular level of time commitment in the performance of his or her services for theCompany or any Affiliate is reduced (for example, and without limitation, if the Participant is an Employee of the Company and the Employee has a changein status from a full-time Employee to a part-time Employee or takes an extended leave of absence) after the date of grant of any Award to the Participant, theBoard has the right in its sole discretion to (i) make a corresponding reduction in the number of shares or cash amount subject to any portion of such Awardthat is scheduled to vest or become payable after the date of such change in time commitment, and (ii) in lieu of or in combination with such a reduction,extend the vesting or payment schedule applicable to such Award. In the event of any such reduction, the Participant will have no right with respect to anyportion of the Award that is so reduced or extended. -14- (f) Incentive Stock Option Limitations. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock withrespect to which Incentive Stock Options are exercisable for the first time by any Participant during any calendar year (under all plans of the Company andany Affiliates) exceeds one hundred thousand dollars ($100,000) (or such other limit established in the Code) or otherwise does not comply with the rulesgoverning Incentive Stock Options, the Options or portions thereof that exceed such limit (according to the order in which they were granted) or otherwise donot comply with such rules will be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Option Agreement(s). (g) Investment Assurances. The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Award, (i)to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ apurchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or sheis capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Award, and (ii) to give written assurancessatisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Award for the Participant’s own account and not with anypresent intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to suchrequirements, will be inoperative if (A) the issuance of the shares upon the exercise or acquisition of Common Stock under the Stock Award has beenregistered under a then currently effective registration statement under the Securities Act, or (B) as to any particular requirement, a determination is made bycounsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, uponadvice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order tocomply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock. (h) Withholding Obligations. Unless prohibited by the terms of an Award Agreement, the Company may, in its sole discretion, satisfy any federal,state or local tax withholding obligation relating to an Award by any of the following means or by a combination of such means: (i) causing the Participant totender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant inconnection with the Stock Award; provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of taxrequired to be withheld by law (or such lesser amount as may be necessary to avoid classification of the Stock Award as a liability for financial accountingpurposes); (iii) withholding cash from an Award settled in cash; (iv) withholding payment from any amounts otherwise payable to the Participant; or (v) bysuch other method as may be set forth in the Award Agreement. -15- (i) Electronic Delivery. Any reference herein to a “written” agreement or document will include any agreement or document deliveredelectronically, filed publicly at www.sec.gov (or any successor website thereto) or posted on the Company’s intranet (or other shared electronic mediumcontrolled by the Company to which the Participant has access). (j) Deferrals. To the extent permitted by applicable law, the Board, in its sole discretion, may determine that the delivery of Common Stock or thepayment of cash, upon the exercise, vesting or settlement of all or a portion of any Award may be deferred and may establish programs and procedures fordeferral elections to be made by Participants. Deferrals by Participants will be made in accordance with Section 409A of the Code. Consistent with Section409A of the Code, the Board may provide for distributions while a Participant is still an employee or otherwise providing services to the Company. TheBoard is authorized to make deferrals of Awards and determine when, and in what annual percentages, Participants may receive payments, including lumpsum payments, following the Participant’s termination of Continuous Service, and implement such other terms and conditions consistent with the provisionsof the Plan and in accordance with applicable law. (k) Section 409A Compliance. Unless otherwise expressly provided for in an Award Agreement, the Plan and Award Agreements will be interpretedto the greatest extent possible in a manner that makes the Plan and the Awards granted hereunder exempt from Section 409A of the Code, and, to the extentnot so exempt, in compliance with Section 409A of the Code. If the Board determines that any Award granted hereunder is not exempt from and is thereforesubject to Section 409A of the Code, the Award Agreement evidencing such Award will incorporate the terms and conditions necessary to avoid theconsequences specified in Section 409A(a)(1) of the Code and to the extent an Award Agreement is silent on terms necessary for compliance, such terms arehereby incorporated by reference into the Award Agreement. Notwithstanding anything to the contrary in this Plan (and unless the Award Agreementspecifically provides otherwise), if the shares of Common Stock are publicly traded, and if a Participant holding an Award that constitutes “deferredcompensation” under Section 409A of the Code is a “specified employee” for purposes of Section 409A of the Code, no distribution or payment of anyamount that is due because of a “separation from service” (as defined in Section 409A of the Code without regard to alternative definitions thereunder) willbe issued or paid before the date that is six (6) months following the date of the Participant’s “separation from service” or, if earlier, the date of theParticipant’s death, unless such distribution or payment may be made in a manner that complies with Section 409A of the Code, and any amounts so deferredwill be paid in a lump sum on the day after such six (6) month period elapses, with the balance paid thereafter on the original schedule. (l) Clawback/Recovery. All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that theCompany is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities arelisted or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law. In addition, the Board mayimpose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including, but notlimited to, a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of Cause. Norecovery of compensation under such a clawback policy will be an event giving rise to a right to resign for “good reason” or “constructive termination” (orsimilar term) under any agreement with the Company. -16- 9. Adjustments upon Changes in Common Stock; Other Corporate Events. (a) Capitalization Adjustments. In the event of a Capitalization Adjustment, the Board will appropriately and proportionately adjust: (i) theclass(es) and maximum number of securities subject to the Plan pursuant to Section 3(a) and 3(f); (ii) the class(es) and maximum number of securities that maybe issued pursuant to the exercise of Incentive Stock Options pursuant to Section 3(c); (iii) the class(es) and maximum number of securities that may beawarded to any Non-Employee Director pursuant to Section 3(e); and (iv) the class(es) and number of securities and price per share of stock subject tooutstanding Stock Awards. The Board will make such adjustments, and its determination will be final, binding and conclusive. (b) Dissolution or Liquidation. Except as otherwise provided in the applicable Stock Award Agreement or other written agreement between aParticipant and the Company or an Affiliate, in the event of a dissolution or liquidation of the Company, all outstanding Stock Awards (other than StockAwards consisting of vested and outstanding shares of Common Stock not subject to a forfeiture condition or the Company’s right of repurchase) willterminate immediately prior to the completion of such dissolution or liquidation, and the shares of Common Stock subject to a forfeiture condition or theCompany’s right of repurchase may be reacquired or repurchased by the Company notwithstanding the fact that the holder of such Stock Award is providingContinuous Service; provided, however, that the Board may, in its sole discretion, cause some or all Stock Awards to become fully vested, exercisable and/orno longer subject to forfeiture or repurchase (to the extent such Stock Awards have not previously expired or terminated) before the dissolution or liquidationis completed but contingent on its completion. (c) Corporate Transactions. In the event of a Corporate Transaction, notwithstanding any other provision of the Plan, the Board may take one ormore of the following actions with respect to Stock Awards, contingent upon the closing or consummation of the Corporate Transaction, unless otherwiseprovided in the instrument evidencing the Stock Award, in any other written agreement between the Company or any Affiliate and the Participant or in anydirector compensation policy of the Company, or unless otherwise expressly provided by the Board at the time of grant of the Stock Award: (i) arrange for the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) to assume orcontinue the Stock Award or to substitute a similar stock award for the Stock Award (including, but not limited to, an award to acquire the same considerationpaid to the stockholders of the Company pursuant to the Corporate Transaction); (ii) arrange for the assignment of any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuantto the Stock Award to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company); -17- (iii) accelerate the vesting, in whole or in part, of the Stock Award (and, if applicable, the time at which the Stock Award may be exercised)to a date prior to the effective time of such Corporate Transaction as the Board determines (or, if the Board does not determine such a date, to the date that isfive (5) days prior to the effective date of the Corporate Transaction), with such Stock Award terminating if not exercised (if applicable) at or prior to theeffective time of the Corporate Transaction; provided, however, that the Board may require Participants to complete and deliver to the Company a notice ofexercise before the effective date of a Corporate Transaction, which exercise is contingent upon the effectiveness of such Corporate Transaction; (iv) arrange for the lapse, in whole or in part, of any reacquisition or repurchase rights held by the Company with respect to the StockAward; (v) cancel or arrange for the cancellation of the Stock Award, to the extent not vested or not exercised prior to the effective time of theCorporate Transaction, and pay such cash consideration (including no consideration) as the Board, in its sole discretion, may consider appropriate; and (vi) cancel or arrange for the cancellation of the Stock Award, to the extent not vested or not exercised prior to the effective time of theCorporate Transaction, in exchange for a payment, in such form as may be determined by the Board equal to the excess, if any, of (A) the per share amountpayable to holders of Common Stock in connection with the Corporate Transaction, over (B) the per share exercise price under the applicable Award. Forclarity, this payment may be zero ($0) if the value of the property is equal to or less than the exercise price. In addition, any escrow, holdback, earnout orsimilar provisions in the definitive agreement for the Corporate Transaction may apply to such payment to the same extent and in the same manner as suchprovisions apply to the holders of Common Stock. The Board need not take the same action or actions with respect to all Stock Awards or portions thereof or with respect to all Participants. The Boardmay take different actions with respect to the vested and unvested portions of a Stock Award. In the event of a Corporate Transaction, unless otherwise provided in the instrument evidencing a Performance Cash Award or any other writtenagreement between the Company or any Affiliate and the Participant, or unless otherwise expressly provided by the Board, all Performance Cash Awardsoutstanding under the Plan will terminate prior to the effective time of such Corporate Transaction. (d) Change in Control. A Stock Award may be subject to additional acceleration of vesting and exercisability upon or after a Change in Control asmay be provided in the Stock Award Agreement for such Stock Award, in any other written agreement between the Company or any Affiliate and theParticipant or in any director compensation policy of the Company, but in the absence of such provision, no such acceleration will occur. 10. Termination or Suspension of the Plan. (a) The Board may suspend or terminate the Plan at any time. No Incentive Stock Option may be granted after the tenth (10th) anniversary of theearlier of (i) the Adoption Date or (ii) the date the Plan is approved by the stockholders of the Company. No Awards may be granted under the Plan while thePlan is suspended or after it is terminated. -18- (b) No Impairment of Rights. Suspension or termination of the Plan will not materially impair rights and obligations under any Award granted whilethe Plan is in effect except with the written consent of the affected Participant or as otherwise permitted in the Plan (including Section 2(b)(viii)) or an AwardAgreement. 11. Effective Date of Plan. This Plan will become effective on the Effective Date. 12. Choice of Law. The laws of the State of California will govern all questions concerning the construction, validity and interpretation of this Plan, without regard tothat state’s conflict of laws rules. 13. Definitions. As used in the Plan, the following definitions will apply to the capitalized terms indicated below: (a) “Adoption Date” means April 6, 2017, which is the date the Plan was adopted by the Board. (b) “Affiliate” means, at the time of determination, any “parent” or “subsidiary” of the Company as such terms are defined in Rule 405. The Boardwill have the authority to determine the time or times at which “parent” or “subsidiary” status is determined within the foregoing definition. (c) “Award” means a Stock Award or a Performance Cash Award. (d) “Award Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of an Award. (e) “Board” means the Board of Directors of the Company. (f) “Capital Stock” means each and every class of common stock of the Company, regardless of the number of votes per share. (g) “Capitalization Adjustment” means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Planor subject to any Stock Award after the Adoption Date without the receipt of consideration by the Company through merger, consolidation, reorganization,recapitalization, reincorporation, stock dividend, dividend in property other than cash, large nonrecurring cash dividend, stock split, reverse stock split,liquidating dividend, combination of shares, exchange of shares, change in corporate structure or any similar equity restructuring transaction, as that term isused in Statement of Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto). Notwithstanding theforegoing, the conversion of any convertible securities of the Company will not be treated as a Capitalization Adjustment. -19- (h) “Cause” will have the meaning ascribed to such term in any written agreement between a Participant and the Company or an Affiliate definingsuch term and, in the absence of such agreement, such term means, with respect to a Participant, the occurrence of any of the following events: (i) suchParticipant has breached his or her employment or service contract with the Company or an Affiliate, (ii) such Participant has engaged in disloyalty to theCompany or an Affiliate, including, without limitation, fraud, embezzlement, theft, commission of a felony or proven dishonesty, (iii) such Participant hasdisclosed trade secrets or confidential information of the Company or an Affiliate to persons not entitled to receive such information, (iv) such Participant hasbreached any written non-competition, non-solicitation, invention assignment or confidentiality agreement between the Participant and the Company or anAffiliate or (v) such Participant has engaged in such other behavior detrimental to the interests of the Company or an Affiliate as the Company determines.The determination that a termination of the Participant’s Continuous Service is either for Cause or without Cause will be made by the Company, in its solediscretion. Any determination by the Company that the Continuous Service of a Participant was terminated with or without Cause for the purposes ofoutstanding Awards held by such Participant will have no effect upon any determination of the rights or obligations of the Company or such Participant forany other purpose. (i) “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the followingevents: (i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than fifty percent(50%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction.Notwithstanding the foregoing, a Change in Control will not be deemed to occur (A) on account of the acquisition of securities of the Company directly fromthe Company, (B) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person thatacquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Companythrough the issuance of equity securities, or (C) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds thedesignated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Companyreducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of theacquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securitiesthat, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the SubjectPerson over the designated percentage threshold, then a Change in Control will be deemed to occur; (ii) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediatelyafter the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directlyor indirectly, either (A) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the survivingEntity in such merger, consolidation or similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power of the parent of thesurviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstandingvoting securities of the Company immediately prior to such transaction; -20- (iii) there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of theCompany and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and itsSubsidiaries to an Entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are Owned by stockholders of theCompany in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease,license or other disposition; or (iv) individuals who, on the Adoption Date, are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least amajority of the members of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board member wasapproved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member will, for purposes of this Plan, beconsidered as a member of the Incumbent Board. Notwithstanding the foregoing definition or any other provision of this Plan, (A) the term Change in Control will not include a sale of assets, mergeror other transaction effected exclusively for the purpose of changing the domicile of the Company, and (B) the definition of Change in Control (or anyanalogous term) in an individual written agreement between a Participant and the Company or an Affiliate will supersede the foregoing definition withrespect to Awards subject to such agreement; provided, however, that (1) if no definition of Change in Control (or any analogous term) is set forth in such anindividual written agreement, the foregoing definition will apply; and (2) no Change in Control (or any analogous term) will be deemed to occur with respectto Awards subject to such an individual written agreement without a requirement that the Change in Control (or any analogous term) actually occur. Ifrequired for compliance with Section 409A of the Code, in no event will an event be deemed a Change in Control if such event is not also a “change in theownership of” the Company, a “change in the effective control of” the Company, or a “change in the ownership of a substantial portion of the assets of” theCompany, each as determined under Treasury Regulations Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder). The Board may,in its sole discretion and without a Participant’s consent, amend the definition of “Change in Control” to conform to the definition of a “change in controlevent” under Section 409A of the Code and the regulations thereunder. (j) “Code” means the Internal Revenue Code of 1986, as amended, including any applicable regulations and guidance thereunder. (k) “Committee” means a committee of one (1) or more Directors to whom authority has been delegated by the Board in accordance with Section2(c). (l) “Common Stock” means the common stock of the Company. (m) “Company” means ChromaDex Corporation, a Delaware corporation. (n) “Consultant” means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisoryservices and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services.However, service solely as a Director, or payment of a fee for such service, will not cause a Director to be considered a “Consultant” for purposes of thePlan. Notwithstanding the foregoing, a person is treated as a Consultant under this Plan only if a Form S-8 Registration Statement under the Securities Act isavailable to register either the offer or the sale of the Company’s securities to such person. -21- (o) “Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, isnot interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Director orConsultant or a change in the Entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’sservice with the Company or an Affiliate, will not terminate a Participant’s Continuous Service; provided, however, that if the Entity for which a Participantis rendering services ceases to qualify as an Affiliate, as determined by the Board, in its sole discretion, such Participant’s Continuous Service will beconsidered to have terminated on the date such Entity ceases to qualify as an Affiliate. For example, a change in status from an Employee of the Company toa Consultant of an Affiliate or to a Director will not constitute an interruption of Continuous Service. To the extent permitted by law, the Board or the chiefexecutive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i)any leave of absence approved by the Board or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfersbetween the Company, an Affiliate, or their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposesof vesting in an Award only to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of absenceagreement or policy applicable to the Participant, or as otherwise required by law. (p) “Corporate Transaction” means the consummation, in a single transaction or in a series of related transactions, of any one or more of thefollowing events: (i) a sale or other disposition of all or substantially all, as determined by the Board, in its sole discretion, of the consolidated assets of theCompany and its Subsidiaries; (ii) a sale or other disposition of more than fifty percent (50%) of the outstanding securities of the Company; (iii) a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or (iv) a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of CommonStock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidationor similar transaction into other property, whether in the form of securities, cash or otherwise. If required for compliance with Section 409A of the Code, in no event will an event be deemed a Corporate Transaction if such event is not also a“change in the ownership of” the Company, a “change in the effective control of” the Company, or a “change in the ownership of a substantial portion of theassets of” the Company, each as determined under Treasury Regulations Section 1.409A-3(i)(5) (without regard to any alternative definition thereunder). TheBoard may, in its sole discretion and without a Participant’s consent, amend the definition of “Corporate Transaction” to conform to the definition of a“change in control event” under Section 409A of the Code and the regulations thereunder. -22- (q) [Reserved.] (r) “Director” means a member of the Board. (s) “Disability” means, with respect to a Participant, the inability of such Participant to engage in any substantial gainful activity by reason of anymedically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuousperiod of not less than twelve (12) months, as provided in Sections 22(e)(3) and 409A(a)(2)(c)(i) of the Code, and will be determined by the Board on thebasis of such medical evidence as the Board deems warranted under the circumstances. (t) “Effective Date” means the effective date of this Plan document, which is the date of the annual meeting of stockholders of the Company held in2017, provided that this Plan is approved by the Company’s stockholders at such meeting. (u) “Employee” means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for suchservices, will not cause a Director to be considered an “Employee” for purposes of the Plan. (v) “Entity” means a corporation, partnership, limited liability company or other entity. (w) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. (x) “Exchange Act Person” means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), exceptthat “Exchange Act Person” will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or anySubsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of theCompany, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, (iv) an Entity Owned, directly or indirectly, by thestockholders of the Company in substantially the same proportions as their Ownership of stock of the Company, or (v) any natural person, Entity or “group”(within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date, is the Owner, directly or indirectly, of securities of theCompany representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities. (y) “Fair Market Value” means, as of any date, the value of the Common Stock determined as follows: -23- (i) If the Common Stock is listed on any established stock exchange or traded on any established market, the Fair Market Value of a share ofCommon Stock will be, unless otherwise determined by the Board, the closing sales price for such stock as quoted on such exchange or market (or theexchange or market with the greatest volume of trading in the Common Stock) on the date of determination, as reported in a source the Board deems reliable. (ii) Unless otherwise provided by the Board, if there is no closing sales price for the Common Stock on the date of determination, then theFair Market Value will be the closing sales price on the last preceding date for which such quotation exists. (iii) In the absence of such markets for the Common Stock, the Fair Market Value will be determined by the Board in good faith and in amanner that complies with Sections 409A and 422 of the Code. (z) “Incentive Stock Option” means an option granted pursuant to Section 5 that is intended to be, and that qualifies as, an “incentive stock option”within the meaning of Section 422 of the Code. (aa) “Inducement Award” means a Stock Award, other than an Incentive Stock Option, granted pursuant to Section 3(f) of the Plan. (bb) “Inducement Committee” means a Committee consisting of the majority of the Company’s independent directors or the Company’sindependent compensation committee, in either case in accordance with NASDAQ Listing Rule 5635(c)(4). (cc) “Non-Employee Director” means a Director who either (i) is not a current employee or officer of the Company or an Affiliate, does not receivecompensation, either directly or indirectly, from the Company or an Affiliate for services rendered as a consultant or in any capacity other than as a Director(except for an amount as to which disclosure would not be required under Item 404(a) of Regulation S-K promulgated pursuant to the Securities Act(“Regulation S-K”)), does not possess an interest in any other transaction for which disclosure would be required under Item 404(a) of Regulation S-K, and isnot engaged in a business relationship for which disclosure would be required pursuant to Item 404(b) of Regulation S-K, or (ii) is otherwise considered a“non-employee director” for purposes of Rule 16b-3. (dd) “Nonstatutory Stock Option” means an option granted pursuant to Section 5 that does not qualify as an Incentive Stock Option. (ee) “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act. (ff) “Option” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan. (gg) “Option Agreement” means a written agreement between the Company and a holder of an Option evidencing the terms and conditions of anOption grant. Each Option Agreement will be subject to the terms and conditions of the Plan. -24- (hh) “Other Stock Award” means an award based in whole or in part by reference to the Common Stock which is granted pursuant to the terms andconditions of Section 6(d). (ii) “Other Stock Award Agreement” means a written agreement between the Company and a holder of an Other Stock Award evidencing the termsand conditions of an Other Stock Award grant. Each Other Stock Award Agreement will be subject to the terms and conditions of the Plan. (jj) “Outside Director” means a Director who either (i) is not a current employee of the Company or an “affiliated corporation” (within the meaningof Treasury Regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an “affiliated corporation” whoreceives compensation for prior services (other than benefits under a tax-qualified retirement plan) during the taxable year, has not been an officer of theCompany or an “affiliated corporation,” and does not receive remuneration from the Company or an “affiliated corporation,” either directly or indirectly, inany capacity other than as a Director, or (ii) is otherwise considered an “outside director” for purposes of Section 162(m) of the Code. (kk) “Own,” “Owned,” “Owner,” “Ownership” means a person or Entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to haveacquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship orotherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities. (ll) “Participant” means a person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstandingAward. (mm) “Performance Cash Award” means an award of cash granted pursuant to the terms and conditions of Section 6(c)(ii). (nn) “Performance Criteria” means the one or more criteria that the Board will select for purposes of establishing the Performance Goals for aPerformance Period. The Performance Criteria that will be used to establish such Performance Goals may be based on any one of, or combination of, thefollowing as determined by the Board: (i) cash flow; (ii) earnings (including gross margin, earnings before interest and taxes, earnings before taxes, earningsbefore interest, taxes, depreciation, amortization and charges for stock-based compensation, earnings before interest, taxes, depreciation and amortization,earnings before interest, taxes and depreciation and net earnings); (iii) earnings per share; (iv) growth in earnings or earnings per share; (v) stock price; (vi)return on equity or average stockholder equity; (vii) total stockholder return or growth in total stockholder return either directly or in relation to acomparative group; (viii) return on capital; (ix) return on assets or net assets; (x) revenue, growth in revenue or return on sales; (xi) income or net income;(xii) operating income, (xiii) net operating income or net operating income after tax; (xiv) operating profit or net operating profit; (xv) operating margin;(xvi) return on operating revenue or return on operating profit; (xvii) regulatory filings; (xviii) regulatory approvals, litigation or regulatory resolution goals;(xix) other operational, regulatory or departmental objectives; (xx) budget comparisons; (xxi) growth in stockholder value relative to established indexes, oranother peer group or peer group index; (xxiii) development and implementation of strategic plans and/or organizational restructuring goals; (xxiv)development and implementation of risk and crisis management programs; (xxv) improvement in workforce diversity; (xxvi) compliance requirements andcompliance relief; (xxvii) safety goals; (xxviii) productivity goals; (xxix) workforce management and succession planning goals; (xxx) economic valueadded (including typical adjustments consistently applied from generally accepted accounting principles required to determine economic value addedperformance measures); (xxxi) measures of customer satisfaction, employee satisfaction or staff development; (xxxii) development or marketingcollaborations, formations of joint ventures or partnerships or the completion of other similar transactions intended to enhance the Company’s revenue orprofitability or enhance its customer base; (xxxiii) merger and acquisitions; (xxxiv) implementation or completion of projects or processes (including,without limitation, clinical trial initiation, clinical trial enrollment and dates, clinical trial results, regulatory filing submissions, regulatory filingacceptances, regulatory or advisory committee interactions, regulatory approvals, new and supplemental indications for existing products, and productsupply); (xxxv) initiation of phases of clinical trials and/or studies by specific dates; (xxxvi) acquisition of new customers, including institutional accounts;(xxxvii) customer retention and/or repeat order rate; (xxxviii) number of institutional customer accounts (xxxix) budget management; (xl) improvements insample and test processing times; (xli) regulatory milestones; (xlii) progress of internal research or clinical programs; (xliii) progress of partnered programs;(xliv) partner satisfaction; (xlv) milestones related to samples received and/or tests run; (xlvi) expansion of sales in additional geographies or markets; (xlvii)research progress, including the development of programs; (xlviii) submission to, or approval by, a regulatory body (including, but not limited to the U.S.Food and Drug Administration) of an applicable filing or a product; (xlix) timely completion of clinical trials; (l) milestones related to samples receivedand/or tests or panels run; (li) expansion of sales in additional geographies or markets; (lii) research progress, including the development of programs; (liii)patient samples processed and billed; (liv) sample processing operating metrics (including, without limitation, failure rate maximums and reduction of repeatrates); (lv) strategic partnerships or transactions (including in-licensing and out-licensing of intellectual property; (lvi) and other similar criteria consistentwith the foregoing; and (lvii) other measures of performance selected by the Board. -25- (oo) “Performance Goals” means, for a Performance Period, the one or more goals established by the Board for the Performance Period based uponthe Performance Criteria. Performance Goals may be based on a Company-wide basis, with respect to one or more business units, divisions, Affiliates, orbusiness segments, and in either absolute terms or relative to the performance of one or more comparable companies or the performance of one or morerelevant indices. Unless specified otherwise by the Board (i) in the Award Agreement at the time the Award is granted or (ii) in such other document settingforth the Performance Goals at the time the Performance Goals are established, the Board will appropriately make adjustments in the method of calculatingthe attainment of Performance Goals for a Performance Period as follows: (1) to exclude restructuring and/or other nonrecurring charges; (2) to excludeexchange rate effects; (3) to exclude the effects of changes to generally accepted accounting principles; (4) to exclude the effects of any statutory adjustmentsto corporate tax rates; (5) to exclude the effects of items that are unusual in nature or occur infrequently as determined under generally accepted accountingprinciples; (6) to exclude the dilutive effects of acquisitions or joint ventures; (7) to assume that any business divested by the Company achievedperformance objectives at targeted levels during the balance of a Performance Period following such divestiture; (8) to exclude the effect of any change in theoutstanding shares of common stock of the Company by reason of any stock dividend or split, stock repurchase, reorganization, recapitalization, merger,consolidation, spin-off, combination or exchange of shares or other similar corporate change, or any distributions to common stockholders other than regularcash dividends; (9) to exclude the effects of stock based compensation and the award of bonuses under the Company’s bonus plans; (10) to exclude costsincurred in connection with potential acquisitions or divestitures that are required to be expensed under generally accepted accounting principles; and (11)to exclude the goodwill and intangible asset impairment charges that are required to be recorded under generally accepted accounting principles. In addition,the Board retains the discretion to reduce or eliminate the compensation or economic benefit due upon attainment of Performance Goals and to define themanner of calculating the Performance Criteria it selects to use for such Performance Period. Partial achievement of the specified criteria may result in thepayment or vesting corresponding to the degree of achievement as specified in the Stock Award Agreement or the written terms of a Performance Cash Award. -26- (pp) “Performance Period” means the period of time selected by the Committee (or, to the extent that an Award is not intended to qualify as“performance-based compensation” under Section 162(m) of the Code, the Board or the Committee) over which the attainment of one or more PerformanceGoals will be measured for the purpose of determining a Participant’s right to and the payment of a Performance Stock Award or a Performance Cash Award.Performance Periods may be of varying and overlapping duration, at the sole discretion of the Committee (or Board, if applicable). (qq) “Performance Stock Award” means a Stock Award granted under the terms and conditions of Section 6(c)(i). (rr) “Plan” means this ChromaDex Corporation 2017 Equity Incentive Plan. (ss) “Restricted Stock Award” means an award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(a). (tt) “Restricted Stock Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Award evidencing theterms and conditions of a Restricted Stock Award grant. Each Restricted Stock Award Agreement will be subject to the terms and conditions of the Plan. (uu) “Restricted Stock Unit Award” means a right to receive shares of Common Stock which is granted pursuant to the terms and conditions ofSection 6(b). (vv) “Restricted Stock Unit Award Agreement” means a written agreement between the Company and a holder of a Restricted Stock Unit Awardevidencing the terms and conditions of a Restricted Stock Unit Award grant. Each Restricted Stock Unit Award Agreement will be subject to the terms andconditions of the Plan. (ww) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time. (xx) “Rule 405” means Rule 405 promulgated under the Securities Act. (yy) “Securities Act” means the Securities Act of 1933, as amended. -27- (zz) “Stock Appreciation Right” or “SAR” means a right to receive the appreciation on Common Stock that is granted pursuant to the terms andconditions of Section 5. (aa) “Stock Appreciation Right Agreement” or “SAR Agreement” means a written agreement between the Company and a holder of a StockAppreciation Right evidencing the terms and conditions of a Stock Appreciation Right grant. Each Stock Appreciation Right Agreement will be subject tothe terms and conditions of the Plan. (bb) “Stock Award” means any right to receive Common Stock granted under the Plan, including an Incentive Stock Option, a Nonstatutory StockOption, a Stock Appreciation Right, a Restricted Stock Award, a Restricted Stock Unit Award, a Performance Stock Award or any Other Stock Award. (cc) “Stock Award Agreement” means a written agreement between the Company and a Participant evidencing the terms and conditions of a StockAward grant. Each Stock Award Agreement will be subject to the terms and conditions of the Plan. (dd) “Subsidiary” means, with respect to the Company, (i) any corporation of which more than fifty percent (50%) of the outstanding capital stockhaving ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class orclasses of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Ownedby the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in theform of voting or participation in profits or capital contribution) of more than fifty percent (50%). (ee) “Ten Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more thanten percent (10%) of the total combined voting power of all classes of stock of the Company or any Affiliate. -28- CHROMADEX CORPORATION 2017 Equity Incentive Plan FORM OF OPTION GRANT NOTICE ChromaDex Corporation (the “Company”) hereby grants to Participant an Option (the “Option”) under the ChromaDex Corporation 2017 Equity IncentivePlan (the “Plan”) to purchase the number of shares of Common Stock (the “Shares”) set forth below at the exercise price set forth below. This Option issubject to all of the terms and conditions set forth in this Option Grant Notice (the “Grant Notice”), the Option Agreement (the “Agreement”), the Plan andthe Notice of Exercise, all of which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined in this Grant Noticebut defined in the Plan or the Agreement will have the same definitions as in the Plan or the Agreement. Participant: Date of Grant: Vesting Commencement Date: Number of Shares Subject to Option: Exercise Price (Per Share): Total Exercise Price: Expiration Date: Type of Grant: ☐ Incentive Stock Option1 ☐ Nonstatutory Stock Option Exercise Schedule: Same as Vesting Schedule. Vesting Schedule: Subject to Section 1 of the Agreement, this Option will vest as follows: [_____________]. Payment: By one or a combination of the following items (as described in the Agreement): ☐ By cash, check, bank draft or money order payable to the Company☐ Pursuant to a Regulation T Program if the Shares are publicly traded☐ By delivery of already-owned Shares if the Shares are publicly traded☐ If and only to the extent this Option is a Nonstatutory Stock Option, and subject to the Company’s consent at the time of exercise,by a “net exercise” arrangement Additional Terms/Acknowledgements: Participant acknowledges receipt of, and understands and agrees to, this Grant Notice, the Agreement, the Plan andthe stock plan prospectus for the Plan. Participant further acknowledges that as of the Date of Grant, this Grant Notice, the Agreement and the Plan set forththe entire understanding between Participant and the Company regarding this Option and supersede all prior oral and written agreements, promises and/orrepresentations regarding this Option, with the exception, if applicable, of (i) any written employment, offer letter or severance agreement, or any writtenseverance plan or policy specifying the terms that should govern this Option, (ii) the Company’s stock ownership guidelines, and (iii) any compensationrecovery policy that is adopted by the Company or is otherwise required by applicable law. By accepting this Option, Participant consents to receive thisGrant Notice, the Agreement, the Plan, the stock plan prospectus for the Plan and any other Plan-related documents by electronic delivery and to participatein the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company. ChromaDex CorporationBy: SignatureTitle: Date: Participant: SignatureDate: 1 If this is an Incentive Stock Option, it (plus other outstanding Incentive Stock Options) cannot be first exercisable for more than $100,000 in value(measured by exercise price) in any calendar year. Any excess over $100,000 is a Nonstatutory Stock Option. -29- ChromaDex Corporation 2017 Equity Incentive Plan Option Agreement (Incentive Stock Option or Nonstatutory Stock Option) Pursuant to the accompanying Option Grant Notice (the “Grant Notice”) and this Option Agreement (the “Agreement”), ChromaDex Corporation(the “Company”) has granted you an Option under the ChromaDex Corporation 2017 Equity Incentive Plan (the “Plan”) to purchase the number of shares ofCommon Stock set forth in the Grant Notice at the exercise price set forth in the Grant Notice. This Option is granted to you effective as of the date of grantset forth in the Grant Notice (the “Date of Grant”). Capitalized terms not explicitly defined in this Agreement but defined in the Plan or the Grant Notice willhave the same definitions as in the Plan or the Grant Notice. 1. Vesting. This Option will vest, if at all, in accordance with the vesting schedule set forth in the Grant Notice. Vesting will cease upon thetermination of your Continuous Service. 2. Number of Shares and Exercise Price. The number of shares of Common Stock subject to this Option and the exercise price per share of thisOption, each as set forth in the Grant Notice, will be adjusted for Capitalization Adjustments, if any, as provided in the Plan. 3. Exercise Restriction for Non-Exempt Employees. If you are an Employee eligible for overtime compensation under the Fair Labor Standards Actof 1938, as amended (that is, a “Non-Exempt Employee”), then except as otherwise provided in the Plan, you may not exercise this Option until you havecompleted at least six months of Continuous Service following the Date of Grant, even if you have already been an Employee for more than six months.Consistent with the provisions of the Worker Economic Opportunity Act, you may exercise this Option as to any vested portion prior to such six-monthanniversary in the case of (i) your death or Disability, (ii) a Corporate Transaction in which this Option is not assumed, continued or substituted, (iii) aChange in Control, or (iv) your “retirement” (as defined in a written agreement between you and the Company or an Affiliate, or, if no such definition, inaccordance with the Company’s then current employment policies and guidelines). 4. Exercise Prior to Vesting (“Early Exercise”). This Option may not be exercised prior to vesting. 5. Method of Payment. You must pay the full amount of the exercise price for the shares of Common Stock you wish to purchase. You may pay theexercise price in cash or by check, bank draft or money order payable to the Company or in any other manner permitted by the Grant Notice, which mayinclude one or more of the following: a. Provided that at the time of exercise the Common Stock is publicly traded, pursuant to a program developed under Regulation T aspromulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or thereceipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds. This manner of payment is also known as a“broker-assisted exercise,” “same day sale,” or “sell to cover.” -30- b. Provided that at the time of exercise the Common Stock is publicly traded, by delivery to the Company (either by actual delivery orattestation) of already-owned shares of Common Stock that are owned free and clear of any liens, claims, encumbrances or security interests, with a FairMarket Value on the date of exercise that does not exceed the aggregate exercise price. You must pay any remaining balance of the aggregate exercise pricenot satisfied by such delivery in cash or other permitted form of payment. “Delivery” for these purposes, in the sole discretion of the Company at the time youexercise this Option, will include delivery to the Company of your attestation of ownership of such shares of Common Stock in a form approved by theCompany. You may not exercise this Option by delivery to the Company of Common Stock if doing so would violate the provisions of any law, regulation oragreement restricting the redemption of the Company’s stock. c. If this Option is a Nonstatutory Stock Option, subject to the consent of the Company at the time of exercise, by a “net exercise”arrangement pursuant to which the Company will reduce the number of shares of Common Stock otherwise issuable to you upon exercise of this Option bythe largest number of whole shares of Common Stock with a Fair Market Value on the date of exercise that does not exceed the aggregate exercise price. Youmust pay any remaining balance of the aggregate exercise price not satisfied by such “net exercise” in cash or other permitted form of payment. Shares ofCommon Stock will no longer be outstanding under this Option and will not be exercisable thereafter if those shares (i) are used to pay the exercise pricepursuant to a “net exercise,” (ii) are delivered to you as a result of such exercise, or (iii) are withheld to satisfy tax withholding obligations. 6. Whole Shares. You may exercise this Option only for whole shares of Common Stock. 7. Securities Law Compliance. You may not exercise this Option unless either (i) the shares of Common Stock issuable upon such exercise areregistered under the Securities Act or (ii) the Company has determined that such exercise and issuance would be exempt from the registration requirements ofthe Securities Act. This Option also must comply with all other applicable laws and regulations governing this Option, and you may not exercise this Optionif the Company determines that such exercise would not be in material compliance with such laws and regulations (including any restrictions on exerciserequired for compliance with Treasury Regulations Section 1.401(k)-1(d)(3), if applicable). 8. Term. You may not exercise this Option before the Date of Grant or after the expiration of its term. The term of this Option expires, subject to theprovisions of Section 5(h) of the Plan, upon the earliest of the following: a. immediately upon the termination of your Continuous Service if such termination is for Cause; b. three months after the termination of your Continuous Service if such termination is for any reason other than Cause, your Disability oryour death (except as otherwise provided in Section 8(d) below); provided, however, that if during any part of such three (3) month period your option is notexercisable solely because of the condition set forth in the section above relating to “Securities Law Compliance,” your option will not expire until theearlier of the Expiration Date or until it has been exercisable for an aggregate period of three (3) months after the termination of your Continuous Service;provided further, if during any part of such three (3) month period, the sale of any Common Stock received upon exercise of your option would violate theCompany’s insider trading policy, then your option will not expire until the earlier of the Expiration Date or until it has been exercisable for an aggregateperiod of three (3) months after the termination of your Continuous Service during which the sale of the Common Stock received upon exercise of youroption would not be in violation of the Company’s insider trading policy. Notwithstanding the foregoing, if (i) you are a Non-Exempt Employee, (ii) yourContinuous Service terminates within six months after the Date of Grant, and (iii) you have vested in a portion of this Option as of the time of yourtermination of Continuous Service, then this Option will not expire until the earlier of (x) the later of (A) the date that is seven months after the Date of Grant,and (B) the date that is three months after the termination of your Continuous Service, and (y) the Expiration Date set forth in the Grant Notice; -31- c. 12 months after the termination of your Continuous Service if such termination is due to your Disability (except as otherwise provided inSection 8(d) below); d. 18 months after your death if either your Continuous Service terminates due to your death or you die within three months after yourContinuous Service terminates for any reason other than Cause; e. the Expiration Date set forth in the Grant Notice; or f. the day before the tenth anniversary of the Date of Grant. If this Option is an Incentive Stock Option, note that to obtain the federal income tax advantages associated with an Incentive Stock Option, theCode requires that at all times beginning on the Date of Grant and ending on the day three months before the date of exercise of this Option, you must be anemployee of the Company or an Affiliate, except in the event of your death or Disability. The Company has provided for extended exercisability of thisOption under certain circumstances for your benefit but cannot guarantee that this Option will necessarily be treated as an Incentive Stock Option if youcontinue to provide services to the Company or an Affiliate as a Consultant or Director after your employment terminates or if you otherwise exercise thisOption more than three months after the date your employment with the Company or an Affiliate terminates. 9. Exercise. a. You may exercise the vested portion of this Option during its term by (i) (A) delivering a Notice of Exercise (in a form designated by theCompany), or (B) making the required electronic election with the Company’s designated broker, and (ii) paying the exercise price and any applicablewithholding taxes to the Company’s stock plan administrator, or to such other person as the Company may designate, together with such additionaldocuments as the Company may then require. -32- b. By exercising this Option, you agree that, as a condition to any exercise of this Option, the Company may require you to enter into anarrangement providing for the payment by you to the Company of any tax withholding obligation of the Company arising by reason of (i) the exercise of thisOption, (ii) the lapse of any substantial risk of forfeiture to which the shares of Common Stock are subject at the time of exercise, or (iii) the disposition ofshares of Common Stock acquired upon such exercise. c. If this Option is an Incentive Stock Option, by exercising this Option, you agree that you will notify the Company in writing within 15days after the date of any disposition of any of the shares of Common Stock issued upon exercise of this Option that occurs within two years after the Date ofGrant or within one year after such shares of Common Stock are transferred upon exercise of this Option. 10. Transferability. Except as otherwise provided in this Section 10, this Option is not transferable, except by will or by the laws of descent anddistribution, and is exercisable during your life only by you. a. Certain Trusts. Upon receiving written permission from the Board or its duly authorized designee, you may transfer this Option to a trustif you are considered to be the sole beneficial owner (determined under Section 671 of the Code and applicable state law) while this Option is held in thetrust, provided that you and the trustee enter into transfer and other agreements required by the Company. b. Domestic Relations Orders. Upon receiving written permission from the Board or its duly authorized designee, and provided that youand the designated transferee enter into transfer and other agreements required by the Company, you may transfer this Option pursuant to the terms of adomestic relations order, official marital settlement agreement or other divorce or separation instrument as permitted by applicable law that contains theinformation required by the Company to effectuate the transfer. You are encouraged to discuss with the Company’s Legal Counsel the proposed terms of anysuch transfer prior to finalizing such domestic relations order, marital settlement agreement or other divorce or separation instrument to help ensure therequired information is contained within the domestic relations order, marital settlement agreement or other divorce or separation instrument. If this Option isan Incentive Stock Option, this Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer. c. Beneficiary Designation. Upon receiving written permission from the Board or its duly authorized designee, you may, by deliveringwritten notice to the Company, in a form approved by the Company and any broker designated by the Company to handle option exercises, designate a thirdparty who, upon your death, will thereafter be entitled to exercise this Option and receive the Common Stock or other consideration resulting from suchexercise. In the absence of such a designation, upon your death, the executor or administrator of your estate will be entitled to exercise this Option andreceive, on behalf of your estate, the Common Stock or other consideration resulting from such exercise. 11. Option Not a Service Contract. Your Continuous Service is not for any specified term and may be terminated by you or by the Company or anAffiliate at any time, for any reason, with or without cause and with or without notice. This Option is not an employment or service contract, and nothing inthis Option (including, but not limited to, the vesting of the shares of Common Stock subject to this Option or the issuance of such shares upon exercise ofthis Option), this Agreement, the Plan or any covenant of good faith and fair dealing that may be found implicit in this Option or Agreement or the Planwill: (i) create or confer upon you any right or obligation to continue in the employ or service of, or affiliation with, the Company or an Affiliate; (ii)constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, futurecompensation or any other term or condition of employment, service or affiliation; (iii) create or confer upon you any right or benefit under this Optionunless such right or benefit has specifically accrued under the terms of this Agreement or the Plan; or (iv) deprive the Company of the right to terminate youat will and without regard to any future vesting opportunity that you may have. In addition, nothing in this Option will obligate the Company or an Affiliate,their respective stockholders, boards of directors, Officers or Employees to continue any relationship that you might have as an Employee, Director orConsultant for the Company or an Affiliate. -33- 12. Tax Withholding Obligations. a. At the time you exercise this Option, in whole or in part, and at any time thereafter as requested by the Company, you hereby authorizewithholding from payroll and any other amounts payable to you, and otherwise agree to make adequate provision for (including by means of a “same daysale” pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board to the extent permitted by the Company), any sumsrequired to satisfy the federal, state, local and foreign tax withholding obligations of the Company or any Affiliate which arise in connection with thisOption. b. If this Option is a Nonstatutory Stock Option, then upon your request and subject to the consent of the Company at the time of exercise,the Company may withhold from fully vested shares of Common Stock otherwise issuable to you upon exercise of this Option a number of whole shares ofCommon Stock with a Fair Market Value on the date of exercise that does not exceed the minimum amount of tax required to be withheld by law (or suchother amount as may be necessary to avoid classification of this Option as a liability for financial accounting purposes). c. You may not exercise this Option unless the tax withholding obligations of the Company and/or any Affiliate are satisfied. Accordingly,you may not be able to exercise this Option when desired even though this Option is vested, and the Company will have no obligation to issue a certificatefor any shares of Common Stock unless such obligations are satisfied. 13. Tax Consequences. The Company has no duty or obligation to minimize the tax consequences to you of this Option and will not be liable toyou for any adverse tax consequences to you arising in connection with this Option. You acknowledge that this Option is exempt from Section 409A of theCode only if the exercise price per share set forth in the Grant Notice is at least equal to the “fair market value” per share of the Common Stock on the Date ofGrant and there is no other impermissible deferral of compensation associated with the Option. You are hereby advised to consult with your own personal tax,financial and/or legal advisors regarding the tax consequences of this Option and by accepting this Option, you have agreed that you have done so orknowingly and voluntarily declined to do so. -34- 14. Notices. Any notices provided for in this Agreement or the Plan will be given in writing (including electronically) and will be deemedeffectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five days after deposit in the United States mail, postageprepaid, addressed to you at the last address you provided to the Company. The Company may, in its sole discretion, decide to deliver any documents relatedto this Option or participation in the Plan by electronic means or to request your consent to participate in the Plan by electronic means. By accepting thisOption, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established andmaintained by the Company or another third party designated by the Company. 15. Governing Plan Document. This Option is subject to all the provisions of the Plan, the provisions of which are hereby made a part of thisOption, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant tothe Plan. Except as otherwise expressly provided in the Grant Notice or this Agreement, in the event of any conflict between the terms in the Grant Notice orthis Agreement and the terms of the Plan, the terms of the Plan will control. 16. Other Documents. You hereby acknowledge receipt of and the right to receive a document providing the information required by Rule 428(b)(1)promulgated under the Securities Act, which includes the Plan prospectus. In addition, you acknowledge receipt of the Company’s policy permitting certainindividuals to sell shares of Common Stock only during certain “window” periods in effect from time to time and the Company’s insider trading policy. 17. Effect on Other Employee Benefit Plans. The value of this Option will not be included as compensation, earnings, salaries, or other similarterms used when calculating your benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwiseexpressly provides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefitplans. 18. Stockholder Rights. You will not have voting or any other rights as a stockholder of the Company with respect to the shares of Common Stockto be issued pursuant to this Option until such shares are issued to you. Upon such issuance, you will obtain full voting and other rights as a stockholder ofthe Company. Nothing contained in this Agreement, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind ora fiduciary relationship between you and the Company or any other person. 19. Severability. If any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, suchunlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement(or part of such a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner which will give effect to the terms of such Sectionor part of a Section to the fullest extent possible while remaining lawful and valid. 20. Amendment. Any amendment to this Agreement must be in writing, signed by a duly authorized representative of the Company.Notwithstanding anything in the Plan to the contrary, the Board reserves the right to amend this Agreement in any way it may deem necessary or advisable tocarry out the purpose of the grant as a result of any change in applicable laws or regulations or any future law, regulation, interpretation, ruling, or judicialdecision. -35- 21. Clawback/Recovery/Recoupment. This Option (and any compensation paid or shares of Common Stock issued under this Option) will besubject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any nationalsecurities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform andConsumer Protection Act or other applicable law. No recovery of compensation under such a clawback policy will be an event giving rise to a right to resignfor “good reason” or “constructive termination” (or similar term) under any agreement with the Company. In addition, you agree that, subject to therequirements of applicable law, if you breach any restrictive covenant agreement between you and the Company or any of its Affiliates or otherwise engagein activities that constitute Cause either while employed by, or providing service to, the Company or any Affiliate within two years thereafter, this Optionshall terminate, and the Company may rescind any exercise of this Option and delivery of shares of Common Stock upon such exercise, as applicable, onsuch terms as the Company shall determine, including the right to require that in the event of any rescission, (a) you will return to the Company the shares ofCommon Stock received upon the exercise of the Option or, (b) if you no longer own the shares of Common Stock, you will pay to the Company the amountof any gain realized or payment received as a result of any sale or other disposition of the shares of Common Stock (or, in the event you transfer the shares bygift or otherwise without consideration, the Fair Market Value of the shares on the date of the breach of any restrictive covenant agreement or activityconstituting Cause), net of the price originally paid by you for the shares of Common Stock. You agree that payment by you will be made in such manner andon such terms and conditions as may be required by the Company and the Company will be entitled to set off against the amount of any such payment anyamounts otherwise owed by you to the Company or any Affiliate. 22. Miscellaneous. a. The rights and obligations of the Company under this Option will be transferable to any one or more persons or entities, and allcovenants and agreements hereunder will inure to the benefit of, and be enforceable by, the Company’s successors and assigns. b. You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Companyto carry out the purposes or intent of this Option. c. You acknowledge and agree that you have reviewed this Option in its entirety, have had an opportunity to obtain the advice of counselprior to executing and accepting this Option, and fully understand all provisions of this Option. d. This Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies ornational securities exchanges as may be required. -36- e. All obligations of the Company under the Plan and this Agreement will be binding on any successor to the Company, whether theexistence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/orassets of the Company. * * * This Option Agreement will be deemed to be signed by you upon the signing by you of the Stock Option Grant Notice to which it is attached. -37- Form of Notice of Exercise ChromaDex CorporationAttention: Stock Plan Administrator10005 Muirlands Blvd.Suite GIrvine, CA 92618 Date of Exercise: _______________ This constitutes notice to ChromaDex Corporation (the “Company”) under my stock option that I elect to purchase the below number of shares ofCommon Stock of the Company (the “Shares”) for the price set forth below. Type of option (check one): Incentive ☐ Nonstatutory ☐ Stock option dated: _______________ _______________ Number of Shares asto which option isexercised: _______________ _______________ Certificates to beissued in name of: _______________ _______________ Total exercise price: $______________ $______________ Cash payment deliveredherewith: $______________ $______________ [Value of ________ Shares delivered herewith2: $______________ $______________] [Value of ________ Shares pursuant to net exercise3: $______________ $______________] [Regulation T Program (cashless exercise4): $______________ $______________] By this exercise, I agree (i) to provide such additional documents as you may require pursuant to the terms of the ChromaDex Corporation 2017Equity Incentive Plan, (ii) to provide for the payment by me to you (in the manner designated by you) of your withholding obligation, if any, relating to theexercise of this option, and (iii) if this exercise relates to an incentive stock option, to notify you in writing within fifteen (15) days after the date of anydisposition of any of the Shares issued upon exercise of this option that occurs within two (2) years after the date of grant of this option or within one (1) yearafter such Shares are issued upon exercise of this option. Very truly yours, 2 Shares must meet the public trading requirements set forth in the option. Shares must be valued in accordance with the terms of the option beingexercised, and must be owned free and clear of any liens, claims, encumbrances or security interests. Certificates must be endorsed or accompanied by anexecuted assignment separate from certificate.3 The option must be a Nonstatutory Stock Option, and the Company must have established net exercise procedures at the time of exercise, in order toutilize this payment method.4 Shares must meet the public trading requirements set forth in the option. -38- CHROMADEX CORPORATION 2017 Equity Incentive Plan FORM OF RESTRICTED STOCK AWARD GRANT NOTICE ChromaDex Corporation (the “Company”), pursuant to its 2017 Equity Incentive Plan (the “Plan”), hereby awards to Participant a restricted stock awardcovering the number of shares of the Company’s Common Stock set forth below. The Company acknowledges the receipt from Participant of considerationwith respect to the par value of the shares of the Company’s Common Stock in the form of cash, past or future services rendered to the Company byParticipant or such other form of consideration as is acceptable to the Board. The restricted stock award and the shares of Common Stock awarded hereunderare subject to all of the terms, conditions and restrictions as set forth herein, in the Restricted Stock Award Agreement, the Plan, and the Prospectus, all ofwhich are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined herein but defined in the Plan or the RestrictedStock Award Agreement will have the same definitions as in the Plan or the Restricted Stock Award Agreement, as applicable. If there is any conflict betweenthe terms herein and the Plan, the terms of the Plan will control. Participant: Date ofGrant: Vesting CommencementDate: Number of Shares Subject toAward: Vesting Schedule: The Unvested Shares subject to this Award will vest and become Vested Shares in accordance with the vesting schedule below (eachsuch vesting date specified below, a “Vesting Date”): Subject to the Participant’s Continuous Service through the applicable vesting date, [ ]. In the event Participant’s Continuous Service terminates for any reason, all Unvested Shares as of the date of such termination ofContinuous Service shall immediately and automatically be forfeited and returned to the Company without any payment ofconsideration therefor and without any required action by or notice to Participant. Additional Terms/Acknowledgements: The undersigned Participant acknowledges receipt of, and understands and agrees to, this Restricted Stock AwardGrant Notice, the Restricted Stock Award Agreement and the Plan. Participant acknowledges and agrees that this Restricted Stock Award Grant Notice andthe Restricted Stock Award Agreement may not be modified, amended or revised except as provided therein or in the Plan. Participant further acknowledgesthat as of the Date of Grant, this Restricted Stock Award Grant Notice, the Restricted Stock Award Agreement and the Plan set forth the entire understandingbetween Participant and the Company regarding the acquisition of stock in the Company and supersede all prior oral and written agreements, promises and/orrepresentations on that subject with the exception of (i) equity awards previously granted and delivered to Participant, and (ii) any compensation recoverypolicy that is or may be adopted by the Company or is otherwise required by applicable law. By accepting this restricted stock award, Participant consents toreceive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system to the extent established and maintainedby the Company or another third party designated by the Company. ChromaDex CorporationBy: SignatureTitle: Date: Participant: SignatureDate: -39- ChromaDex Corporation 2017 Equity Incentive Plan Form of Restricted Stock Award Agreement Pursuant to the Restricted Stock Award Grant Notice (the “Grant Notice”) and this Restricted Stock Award Agreement (the “Agreement” andtogether with the Grant Notice, the “Award”) and its 2017 Equity Incentive Plan (as amended from time-to-time, the “Plan”), ChromaDex Corporation (the“Company”) has awarded you the number of shares of the Company’s Common Stock subject to the Award as indicated in the Grant Notice. Capitalizedterms not explicitly defined in this Agreement but defined in the Plan will have the same definitions as in the Plan. If there is any conflict between the termsin this Agreement and the Plan, the terms of the Plan will control. The details of your Award, in addition to those set forth in the Grant Notice and the Plan, are as follows: 1. Vesting. Subject to the limitations contained herein, your Award will vest pursuant to the Vesting Schedule in the Grant Notice, provided thatvesting will cease upon the termination of your Continuous Service. “Vested Shares” will mean shares subject to your Award that have vested in accordancewith the Vesting Schedule and with respect to which the forfeiture conditions and restrictions set forth in Sections 2 and 3 have lapsed, and “UnvestedShares” will mean shares subject to your Award that have not vested in accordance with the Vesting Schedule that remain subject to such risk of forfeitureand restrictions on transfer as set forth in sections 2 and 3 of this Agreement. 2. Forfeiture of Unvested Shares. Except as may be expressly provided in the Grant Notice or otherwise determined by the Board in its solediscretion, in the event your Continuous Service terminates for any reason, all Unvested Shares as of the date of your termination of Continuous Service shallimmediately and automatically be forfeited and returned to the Company without any payment to you and without any required action or notice to you. Youhereby agree to take whatever action the Company deems necessary to effectuate the Company’s reacquisition of the Unvested Shares and the return of suchshares to the Company. Following such forfeiture and return to the Company, the Company will become the legal and beneficial owner of the UnvestedShares and all rights and interests in and related to such shares, and the Company will have the right to transfer to its own name the Unvested Shares withoutfurther action by you. 3. Restrictions and Conditions. a. In addition to any other limitation on transfer created by applicable securities laws, you may not sell, assign, hypothecate, donate,encumber or otherwise dispose of all or any part of the Unvested Shares or any interest in the Unvested Shares; provided, however, that an interest in theUnvested Shares may be transferred pursuant to a domestic relations order as defined in the Code. In the case of Vested Shares, you will not sell, assign,hypothecate, donate, encumber or otherwise dispose of all or any part of the Vested Shares or any interest in the Vested Shares except in compliance with thisAgreement, the Company’s bylaws and applicable securities laws. -40- b. In order to implement the provisions of this award, the Company may at its election either (i) after the Date of Grant, issue a certificaterepresenting the shares of Common Stock subject to this Award and place a legend on and stop transfer notice describing the restrictions on and forfeitabilityof the Unvested Shares subject to this Award, in which case the Company may retain such certificates unless and until the Unvested Shares represented bysuch certificate have vested and may cancel such certificate if and to the extent that the Unvested Shares are forfeited and returned to the Company or (ii) notissue any certificate representing shares of Common Stock subject to this Award and instead document your interest in such shares of Common Stock byregistering such shares of Common Stock with the Company’s transfer agent (or another custodian selected by the Company) in book entry form in yourname with the applicable restrictions noted in the book-entry system, in which case certificate(s) representing all or a part of shares of Common Stock will notbe issued unless and until Unvested Shares become Vested Shares hereunder. The Company may provide for delay in the issuance or delivery of VestedShares as it determines appropriate in order to effectuate Section 9(b) of this Agreement. c. Unvested Shares, together with any other assets or securities in respect of such Unvested Shares (e.g., dividends), shall be remitted to theCompany and subject to forfeiture and restriction on transfer pursuant to Sections 2 and 3 of this Agreement and all other restrictions of the Grant Notice, thisAgreement and the Plan. Subject to the provisions of Sections 2 and 3 of this Agreement, all Vested Shares (and any other vested assets and securitiesattributable thereto) shall be released by the Company within sixty (60) days following the date of their vesting. At all times prior to the release of the sharesof Common Stock pursuant to the foregoing sentence, the certificates or book entries representing such shares shall remain in the Company’s possession orcontrol. If the Unvested Shares are to be certificated in accordance with Section 3(b)(i), you shall deliver to the Company a duly executed blank stock powerin a form to be provided by the Company. 4. Rights as Stockholder. Subject to the provisions of this Award, you will exercise all rights and privileges of a stockholder of the Company withrespect to the shares of Common Stock subject to this award. You will be deemed to be the holder of the shares for purposes of receiving any dividends thatmay be paid with respect to such shares (which will be subject to the same vesting and forfeiture restrictions as apply to the shares to which they relate) andfor purposes of exercising any voting rights relating to such shares. 5. Restrictive Legends. All certificates and/or book entries representing the Common Stock issued under your Award will be endorsed withappropriate legends determined by the Company in its sole discretion (in addition to any other legend that may be required by other agreements between youand the Company). 6. Capitalization Adjustments. The number of shares and/or class of securities subject to your Award may be adjusted from time to time forCapitalization Adjustments. 7. Securities Law Compliance. In no event may you be issued any shares of Common Stock under your Award unless the shares are either thenregistered under the Securities Act or, if not registered, the Company has determined that such issuance would be exempt from the registration requirementsof the Securities Act. Your Award and the issuance of shares of Common Stock under your Award also must comply with all other applicable laws andregulations, and you will not receive any shares of Common Stock under your Award if the Company determines that such receipt would not be in materialcompliance with such laws and regulations. -41- 8. Award not a Service Contract. Your Award is not an employment or service contract, and nothing in your Award will be deemed to create in anyway whatsoever any obligation on your part to continue in the employ of the Company or an Affiliate, or on the part of the Company or an Affiliate tocontinue your employment. In addition, nothing in your Award will obligate the Company or an Affiliate, their respective stockholders, boards of directors,Officers or Employees to continue any relationship that you might have as a Director or Consultant for the Company or an Affiliate. 9. Withholding Obligations. a. At the time your Award is made, or at any time thereafter as requested by the Company, you hereby authorize withholding from payrolland any other amounts payable to you, and otherwise agree to make adequate provision for any sums required to satisfy the federal, state, local and foreigntax withholding obligations of the Company or an Affiliate, if any, which arise in connection with your Award (the “Withholding Taxes”). The Companymay, in its sole discretion, satisfy all or any portion of the Withholding Taxes obligation relating to your Award by any of the following means or by acombination of such means: (i) withholding from any amounts otherwise payable to you by the Company; (ii) causing you to tender a cash payment; (iii)withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to you in connection with the Award with a Fair MarketValue equal to the amount of such Withholding Taxes or (iv) permitting or requiring you to enter into a “same day sale” commitment, if applicable, with abroker-dealer that is a member of the Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby you irrevocably elect to sell a portion of theshares subject to your Award to satisfy the Withholding Taxes and whereby the FINRA Dealer irrevocably commits to forward the proceeds necessary tosatisfy the Withholding Taxes directly to the Company and/or its Affiliates; provided, however, that the number of such shares of Common Stock withheldmay not exceed the amount necessary to satisfy the Company’s required tax withholding obligations using the minimum statutory withholding rates forfederal, state, local and foreign tax purposes, including payroll taxes, that are applicable to supplemental taxable income; and provided, further, that to theextent necessary to qualify for an exemption from application of Section 16(b) of the Exchange Act, if applicable, such share withholding procedure will besubject to the express prior approval of the Company’s Compensation Committee. b. Unless the tax withholding obligations of the Company and any Affiliate are satisfied, the Company will have no obligation to issue acertificate for such shares, delivery of such shares and/or release such shares from any escrow (as applicable) provided for in this Agreement. c. In the event the Company’s obligation to withhold arises prior to the delivery or release to you of Common Stock or it is determined afterthe delivery of Common Stock to you that the amount of the Company’s withholding obligation was greater than the amount withheld by the Company, youagree to indemnify and hold the Company harmless from any failure by the Company to withhold the proper amount. -42- 10. Tax Consequences. The Company has no duty or obligation to minimize the tax consequences to you of this Award and shall not be liable toyou for any adverse tax consequences to you arising in connection with this Award. You are hereby advised to consult with your own personal tax, financialand/or legal advisors regarding the tax consequences of this Award and by signing the Grant Notice, you have agreed that you have done so or knowinglyand voluntarily declined to do so. You understand that you (and not the Company) shall be responsible for your own tax liability that may arise as a result ofthis investment or the transactions contemplated by this Agreement. You agree to review with your own tax advisors the federal, state, local and foreign taxconsequences of this investment and the transactions contemplated by this Agreement. You will rely solely on such advisors and not on any statements orrepresentations of the Company or any of its agents. You understand that Section 83 of the Code taxes as ordinary income to you the fair market value of theshares of Common Stock issued to you pursuant to the Award as of the date any restrictions on such shares lapse (that is, as of the date on which part or all ofsuch shares vest). You understand that you may elect to be taxed at the time the Common Stock is issued to you pursuant to your Award, rather than whenand as applicable restrictions lapse, by filing an election under Section 83(b) of the Code (an “83(b) Election”) with the Internal Revenue Service withinthirty (30) days after the date your acquire shares of Common Stock pursuant to your Award. Even if the fair market value of the Common Stock at the time ofgrant of your Award equals the amount paid for the Common Stock, the 83(b) Election must be made to avoid income under Section 83(a) in the future. Youunderstand that failure to file such an 83(b) Election in a timely manner may result in adverse tax consequences for you. You further understand that youmust file an additional copy of such 83(b) Election with your federal income tax return for the calendar year in which you make such 83(b) Election. Youacknowledge that the foregoing is only a summary of the effect of U.S. federal income taxation with respect to issuance of the Common Stock pursuant toyour Award, and does not purport to be complete. You further acknowledge that the Company has directed you to seek independent advice regarding theapplicable provisions of the Code, the income tax laws of any municipality, state or foreign country in which you may reside, and the tax consequences ofyour death. You assume all responsibility for filing an 83(b) Election and paying all taxes resulting from such election or the lapse of the restrictions on theCommon Stock. YOU ACKNOWLEDGE THAT IT IS YOUR OWN RESPONSIBILITY, AND NOT THE COMPANY’S, TO FILE A TIMELY ELECTIONUNDER SECTION 83(B) OF THE CODE. THE COMPANY AND ITS LEGAL COUNSEL CANNOT ASSUME RESPONSIBILITY FOR FAILURE TO FILETHE 83(B) ELECTION IN A TIMELY MANNER UNDER ANY CIRCUMSTANCES. 11. Notices. Any notices provided for in your Award or the Plan will be given in writing (including electronically) and will be deemed effectivelygiven upon receipt or, in the case of notices delivered by the Company to you, five days after deposit in the U.S. mail, postage prepaid, addressed to you atthe last address you provided to the Company. The Company may, in its sole discretion, decide to deliver any documents related to participation in the Planand this Award by electronic means or to request your consent to participate in the Plan by electronic means. By accepting this Award, you consent to receivesuch documents by electronic delivery and to participate in the Plan through an on-line or electronic system established and maintained by the Company oranother third party designated by the Company. 12. Governing Plan Document. Your Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of yourAward, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant tothe Plan. In the event of any conflict between the provisions of your Award and those of the Plan, the provisions of the Plan will control. In addition, yourAward (and any compensation paid or shares issued under your Award) is subject to recoupment in accordance with The Dodd–Frank Wall Street Reform andConsumer Protection Act and any implementing regulations thereunder, any clawback policy adopted by the Company and any compensation recoverypolicy otherwise required by applicable law. -43- 13. Other Documents. You hereby acknowledge receipt of and the right to receive a document providing the information required by Rule 428(b)(1)promulgated under the Securities Act, which includes the Plan prospectus. In addition, you acknowledge receipt of the Company’s policy permitting certainindividuals to sell shares only during certain “window” periods and the Company’s insider trading policy, in effect from time to time. 14. Effect on Other Employee Benefit Plans. The value of this Award will not be included as compensation, earnings, salaries, or other similar termsused when calculating your benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expresslyprovides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans. 15. Severability. If all or any part of this Award or the Plan is declared by any court or governmental authority to be unlawful or invalid, suchunlawfulness or invalidity will not invalidate any portion of this Award or the Plan not declared to be unlawful or invalid. Any Section of this Award (or partof such a Section) so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or partof a Section to the fullest extent possible while remaining lawful and valid. 16. Miscellaneous. a. The rights and obligations of the Company under your Award are transferable by the Company to any one or more persons or entities,and all covenants and agreements hereunder will inure to the benefit of, and be enforceable by the Company’s successors and assigns. Your rights andobligations under your Award may only be assigned with the prior written consent of the Company and subject to the terms and conditions of this Agreementand the Plan. b. You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Companyto carry out the purposes or intent of your Award. c. You acknowledge and agree that you have reviewed your Award in its entirety, have had an opportunity to obtain the advice of counselprior to executing and accepting your Award and fully understand all provisions of your Award. * * * This Restricted Stock Award Agreement will be deemed to be signed by the Company and Participant upon the signing by Participant of theRestricted Stock Award Grant Notice to which it is attached or (to the extent established and permitted by the Company) by acceptance of this Award throughthe Company’s electronic stock plan administration system. -44- CHROMADEX CORPORATION 2017 Equity Incentive Plan FORM OF RESTRICTED STOCK UNIT AWARD GRANT NOTICE ChromaDex Corporation (the “Company”) hereby grants to Participant a Restricted Stock Unit Award (the “Award”) under the ChromaDex Corporation 2017Equity Incentive Plan (the “Plan”) for the number of restricted stock units (the “RSUs”) set forth below. This Award is subject to all of the terms andconditions set forth in this Restricted Stock Unit Award Grant Notice (the “Grant Notice”) and in the Restricted Stock Unit Award Agreement (the“Agreement”) and the Plan, both of which are attached hereto and incorporated herein in their entirety. Capitalized terms not explicitly defined in this GrantNotice but defined in the Plan or the Agreement will have the same definitions as in the Plan or the Agreement. Participant: Date ofGrant: Vesting CommencementDate: Number of RSUs Subject toAward: Vesting Schedule: Subject to Section 2 of the Agreement, this Award will vest as follows: [ ]. Each installment of RSUs that vests under this Award is a“separate payment” for purposes of Treasury Regulations Section 1.409A-2(b)(2). Issuance Schedule: Subject to any change upon a Capitalization Adjustment, one share of Common Stock will be issued for each RSU that vests at the timeset forth in Section 6 of the Agreement. Additional Terms/Acknowledgements: Participant acknowledges receipt of, and understands and agrees to, this Grant Notice, the Agreement, the Plan andthe stock plan prospectus for the Plan. Participant further acknowledges that as of the Date of Grant, this Grant Notice, the Agreement and the Plan set forththe entire understanding between Participant and the Company regarding this Award and supersede all prior oral and written agreements, promises and/orrepresentations regarding this Award, with the exception, if applicable, of (i) any written employment, offer letter or severance agreement, or any writtenseverance plan or policy specifying the terms that should govern this Award, (ii) the Company’s stock ownership guidelines, and (iii) any compensationrecovery policy that is adopted by the Company or is otherwise required by applicable law. By accepting this Award, Participant consents to receive thisGrant Notice, the Agreement, the Plan, the stock plan prospectus for the Plan and any other Plan-related documents by electronic delivery and to participatein the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company. ChromaDex CorporationBy: SignatureTitle: Date: Participant: SignatureDate: -45- ChromaDex Corporation2017 Equity Incentive Plan Form of Restricted Stock Unit Award Agreement Pursuant to the accompanying Restricted Stock Unit Award Grant Notice (the “Grant Notice”) and this Restricted Stock Unit Award Agreement (the“Agreement”), ChromaDex Corporation (the “Company”) has granted you a Restricted Stock Unit Award (the “Award”) under the ChromaDex Corporation2017 Equity Incentive Plan (the “Plan”) for the number of restricted stock units (the “Restricted Stock Units”) set forth in the Grant Notice. This Award isgranted to you effective as of the date of grant set forth in the Grant Notice (the “Date of Grant”). Capitalized terms not explicitly defined in this Agreementbut defined in the Plan or the Grant Notice will have the same definitions as in the Plan or the Grant Notice. 1. Grant of the Award. This Award represents your right to be issued on a future date (as set forth in Section 6) one share of Common Stock for eachRestricted Stock Unit subject to this Award that vests in accordance with the Grant Notice and this Agreement. This Award was granted in consideration ofyour services to the Company or an Affiliate. 2. Vesting. This Award will vest, if at all, in accordance with the vesting schedule set forth in the Grant Notice. Vesting will cease upon thetermination of your Continuous Service. Upon such termination of your Continuous Service, you will forfeit (at no cost to the Company) any RestrictedStock Units subject to this Award that have not vested as of the date of such termination and you will have no further right, title or interest in such RestrictedStock Units. 3. Number of Restricted Stock Units and Shares of Common Stock. a. The number of Restricted Stock Units subject to this Award, as set forth in the Grant Notice, will be adjusted for CapitalizationAdjustments, if any, as provided in the Plan. b. Any additional Restricted Stock Units and any shares of Common Stock, cash or other property that become subject to this Awardpursuant to this Section 3 will be subject, in a manner determined by the Board, to the same forfeiture restrictions, restrictions on transferability, and time andmanner of issuance as applicable to the other Restricted Stock Units subject to this Award to which they relate. c. No fractional shares or rights for fractional shares of Common Stock will be created pursuant to this Section 3. Any fractional shares thatmay be created by the adjustments referred to in this Section 3 will be rounded down to the nearest whole share. 4. Securities Law Compliance. You will not be issued any shares of Common Stock in respect of this Award unless either (i) such shares areregistered under the Securities Act or (ii) the Company has determined that such issuance would be exempt from the registration requirements of theSecurities Act. This Award also must comply with all other applicable laws and regulations governing this Award, and you will not receive any shares ofCommon Stock in respect of this Award if the Company determines that such receipt would not be in material compliance with such laws and regulations. -46- 5. Transferability. Except as otherwise provided in this Section 5, this Award is not transferable, except by will or by the laws of descent anddistribution and prior to the time that shares of Common Stock in respect of this Award have been issued to you, you may not transfer, pledge, sell orotherwise dispose of any portion of the Restricted Stock Units or the shares of Common Stock in respect of this Award. For example, you may not use anyshares of Common Stock that may be issued in respect of this Award as security for a loan, nor may you transfer, pledge, sell or otherwise dispose of suchshares. This restriction on transfer will lapse upon issuance to you of the shares of Common Stock in respect of this Award. a. Beneficiary Designation. Upon receiving written permission from the Board or its duly authorized designee, you may, by deliveringwritten notice to the Company, in a form approved by the Company and any broker designated by the Company to effect transactions under the Plan,designate a third party who, in the event of your death, will thereafter be entitled to receive any distribution of Common Stock or other consideration towhich you were entitled at the time of your death pursuant to this Agreement. In the absence of such a designation, in the event of your death, the executor oradministrator of your estate will be entitled to receive, on behalf of your estate, such Common Stock or other consideration. b. Domestic Relations Orders. Upon receiving written permission from the Board or its duly authorized designee, and provided that youand the designated transferee enter into transfer and other agreements required by the Company, you may transfer your right to receive any distribution ofCommon Stock or other consideration under this Award, pursuant to the terms of a domestic relations order, official marital settlement agreement or otherdivorce or separation instrument as permitted by applicable law that contains the information required by the Company to effectuate the transfer. You areencouraged to discuss with the Company’s General Counsel the proposed terms of any such transfer prior to finalizing such domestic relations order, maritalsettlement agreement or other divorce or separation instrument to help ensure the required information is contained within the domestic relations order,marital settlement agreement or other divorce or separation instrument. 6. Date of Issuance. a. The issuance of any shares of Common Stock in respect of this Award is (i) subject to satisfaction of the tax withholding obligations setforth in Section 10 and (ii) intended to comply with Treasury Regulations Section 1.409A-1(b)(4) and will be construed and administered in such a manner.The form of such issuance (e.g., a stock certificate or electronic entry evidencing such shares) will be determined by the Company. b. In the event one or more Restricted Stock Units subject to this Award vests, the Company will issue to you, on the applicable vestingdate, one share of Common Stock for each Restricted Stock Unit that vests on such date (and for purposes of this Agreement, such issuance date is referred toas the “Original Issuance Date”); provided, however, that if the Original Issuance Date falls on a date that is not a business day, such shares will instead beissued to you on the next following business day. c. Notwithstanding the foregoing, if (i) the Original Issuance Date does not occur (1) during an “open window period” applicable to you, asdetermined by the Company in accordance with the Company’s then-effective policy on trading in Company securities, or (2) on a date when you areotherwise permitted to sell shares of Common Stock on an established stock exchange or stock market (including, but not limited to, under a previouslyestablished 10b5-1 trading plan entered into in compliance with the Company’s policies), and (ii) the Board elects, prior to the Original Issuance Date, (1)not to satisfy the Withholding Taxes described in Section 10 by withholding shares of Common Stock from the shares of Common Stock otherwise due, onthe Original Issuance Date, to you under this Award, (2) not to permit you to enter into a “same day sale” commitment with a broker-dealer pursuant toSection 10 (including, but not limited to, a commitment under a previously established 10b5-1 trading plan entered into in compliance with the Company’spolicies) and (3) not to permit you to pay the Withholding Taxes in cash, then the shares that would otherwise be issued to you on the Original Issuance Datewill not be issued on such Original Issuance Date and will instead be issued on the first business day when you are not prohibited from selling shares ofCommon Stock in the open public market, but in no event later than December 31 of the calendar year in which the Original Issuance Date occurs (that is, thelast day of your taxable year in which the Original Issuance Date occurs), or, if and only if permitted in a manner that complies with Treasury RegulationsSection 1.409A-1(b)(4), no later than the date that is the 15th day of the third calendar month of the year following the year in which the shares of CommonStock in respect of this Award are no longer subject to a “substantial risk of forfeiture” within the meaning of Treasury Regulations Section 1.409A-1(d). -47- 7. Dividends. You will receive no benefit or adjustment to this Award with respect to any cash dividend, stock dividend or other distribution exceptas provided in the Plan with respect to a Capitalization Adjustment. 8. Restrictive Legends. The shares of Common Stock issued in respect of this Award will be endorsed with appropriate legends, if any, as determinedby the Company. 9. Award Not a Service Contract. Your Continuous Service is not for any specified term and may be terminated by you or by the Company or anAffiliate at any time, for any reason, with or without cause and with or without notice. This Award is not an employment or service contract, and nothing inthis Award (including, but not limited to, the vesting of the Restricted Stock Units subject to this Award or the issuance of shares of Common Stock in respectof this Award), this Agreement, the Plan or any covenant of good faith and fair dealing that may be found implicit in this Award or Agreement or the Planwill: (i) create or confer upon you any right or obligation to continue in the employ or service of, or affiliation with, the Company or an Affiliate; (ii)constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, futurecompensation or any other term or condition of employment, service or affiliation; (iii) create or confer upon you any right or benefit under this Award unlesssuch right or benefit has specifically accrued under the terms of this Agreement or the Plan; or (iv) deprive the Company of the right to terminate you at willand without regard to any future vesting opportunity that you may have. In addition, nothing in this Award will obligate the Company or an Affiliate, theirrespective stockholders, boards of directors, Officers or Employees to continue any relationship that you might have as an Employee, Director or Consultantfor the Company or an Affiliate. -48- 10. Tax Withholding Obligations. a. On or before the time you receive a distribution of any shares of Common Stock in respect of this Award, and at any other time asreasonably requested by the Company in accordance with applicable tax laws, you agree to make adequate provision for any sums required to satisfy thefederal, state, local and foreign tax withholding obligations of the Company or any Affiliate that arise in connection with this Award (the “WithholdingTaxes”). Specifically, the Company or an Affiliate may, in its sole discretion, satisfy all or any portion of the Withholding Taxes relating to this Award byany of the following means or by a combination of such means: (i) withholding from any compensation otherwise payable to you by the Company or anAffiliate; (ii) causing you to tender a cash payment; (iii) permitting you to enter into a “same day sale” commitment with a broker-dealer that is a member ofthe Financial Industry Regulatory Authority (a “FINRA Dealer”) whereby you irrevocably elect to sell a portion of the shares of Common Stock to be issuedin connection with this Award to satisfy the Withholding Taxes and whereby the FINRA Dealer irrevocably commits to forward the proceeds necessary tosatisfy the Withholding Taxes directly to the Company and/or its Affiliates; or (iv) withholding shares of Common Stock from the shares of Common Stockissued or otherwise issuable to you in connection with this Award with a Fair Market Value (measured as of the date the shares of Common Stock are issued toyou) equal to the amount of such Withholding Taxes; provided, however, that the number of such shares of Common Stock so withheld will not exceed theamount necessary to satisfy the Company’s required tax withholding obligations using the minimum statutory withholding rates for federal, state, local and,if applicable, foreign tax purposes, including payroll taxes, that are applicable to supplemental taxable income. b. Unless the Withholding Taxes of the Company and/or any Affiliate are satisfied, the Company will have no obligation to issue to youany Common Stock. c. In the event the Company’s obligation to withhold arises prior to the issuance to you of Common Stock or it is determined after theissuance of Common Stock to you that the amount of the Company’s withholding obligation was greater than the amount withheld by the Company, youagree to indemnify and hold the Company harmless from any failure by the Company to withhold the proper amount. 11. Tax Consequences. The Company has no duty or obligation to minimize the tax consequences to you of this Award and will not be liable to youfor any adverse tax consequences to you arising in connection with this Award. You are hereby advised to consult with your own personal tax, financialand/or legal advisors regarding the tax consequences of this Award and by accepting this Award, you have agreed that you have done so or knowingly andvoluntarily declined to do so. 12. Notices. Any notices provided for in this Agreement or the Plan will be given in writing (including electronically) and will be deemedeffectively given upon receipt or, in the case of notices delivered by mail by the Company to you, five days after deposit in the United States mail, postageprepaid, addressed to you at the last address you provided to the Company. The Company may, in its sole discretion, decide to deliver any documents relatedto this Award or participation in the Plan by electronic means or to request your consent to participate in the Plan by electronic means. By accepting thisAward, you consent to receive such documents by electronic delivery and to participate in the Plan through an on-line or electronic system established andmaintained by the Company or another third party designated by the Company. -49- 13. Governing Plan Document. This Award is subject to all the provisions of the Plan, the provisions of which are hereby made a part of this Award,and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to the Plan.Except as otherwise expressly provided in the Grant Notice or this Agreement, in the event of any conflict between the terms in the Grant Notice or thisAgreement and the terms of the Plan, the terms of the Plan will control. 14. Other Documents. You hereby acknowledge receipt of and the right to receive a document providing the information required by Rule 428(b)(1)promulgated under the Securities Act, which includes the Plan prospectus. In addition, you acknowledge receipt of the Company’s policy permitting certainindividuals to sell shares of Common Stock only during certain “window” periods in effect from time to time and the Company’s insider trading policy. 15. Effect on Other Employee Benefit Plans. The value of this Award will not be included as compensation, earnings, salaries, or other similar termsused when calculating your benefits under any employee benefit plan sponsored by the Company or any Affiliate, except as such plan otherwise expresslyprovides. The Company expressly reserves its rights to amend, modify, or terminate any of the Company’s or any Affiliate’s employee benefit plans. 16. Stockholder Rights. You will not have voting or any other rights as a stockholder of the Company with respect to the shares of Common Stockto be issued pursuant to this Award until such shares are issued to you. Upon such issuance, you will obtain full voting and other rights as a stockholder ofthe Company. Nothing contained in this Agreement, and no action taken pursuant to its provisions, will create or be construed to create a trust of any kind ora fiduciary relationship between you and the Company or any other person. 17. Severability. If any part of this Agreement or the Plan is declared by any court or governmental authority to be unlawful or invalid, suchunlawfulness or invalidity will not invalidate any portion of this Agreement or the Plan not declared to be unlawful or invalid. Any Section of this Agreement(or part of such a Section) so declared to be unlawful or invalid will, if possible, be construed in a manner which will give effect to the terms of such Sectionor part of a Section to the fullest extent possible while remaining lawful and valid. 18. Amendment. Any amendment to this Agreement must be in writing, signed by a duly authorized representative of the Company.Notwithstanding anything in the Plan to the contrary, the Board reserves the right to amend this Agreement in any way it may deem necessary or advisable tocarry out the purpose of the grant as a result of any change in applicable laws or regulations or any future law, regulation, interpretation, ruling, or judicialdecision. 19. Clawback/Recovery. This Award (and any compensation paid or shares of Common Stock issued under this Award) will be subject torecoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securitiesexchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and ConsumerProtection Act or other applicable law. No recovery of compensation under such a clawback policy will be an event giving rise to a right to resign for “goodreason” or “constructive termination” (or similar term) under any agreement with the Company. -50- 20. Unsecured Obligation. This Award is unfunded, and as a holder of vested Restricted Stock Units, you will be considered an unsecured creditorof the Company with respect to the Company’s obligation, if any, to issue shares of Common Stock or other property pursuant to this Agreement. 21. Compliance with Section 409A of the Code. This Award is intended to comply with the “short-term deferral” rule set forth in TreasuryRegulations Section 1.409A-1(b)(4). However, if (i) this Award fails to satisfy the requirements of the short-term deferral rule and is otherwise not exemptfrom, and therefore deemed to be deferred compensation subject to, Section 409A of the Code, (ii) you are deemed by the Company at the time of your“separation from service” (as such term is defined in Treasury Regulations Section 1.409A-1(h) without regard to any alternative definition thereunder) to bea “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, and (iii) any of the payments set forth herein are issuable upon such separationfrom service, then to the extent delayed commencement of any portion of such payments is required to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code and the related adverse taxation under Section 409A of the Code, such payments will not be provided to you prior to the earliest of (a)the date that is six months and one day after the date of such separation from service, (b) the date of your death, or (c) such earlier date as permitted underSection 409A of the Code without the imposition of adverse taxation. Upon the first business day following the expiration of such applicable Code Section409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section 21 will be paid in a lump sum to you, and any remaining payments due will be paid asotherwise provided herein. Each installment of Restricted Stock Units that vests under this Award is a “separate payment” for purposes of TreasuryRegulations Section 1.409A-2(b)(2). 22. Miscellaneous. a. The rights and obligations of the Company under this Award will be transferable to any one or more persons or entities, and all covenantsand agreements hereunder will inure to the benefit of, and be enforceable by, the Company’s successors and assigns. b. You agree upon request to execute any further documents or instruments necessary or desirable in the sole determination of the Companyto carry out the purposes or intent of this Award. c. You acknowledge and agree that you have reviewed this Award in its entirety, have had an opportunity to obtain the advice of counselprior to executing and accepting this Award, and fully understand all provisions of this Award. d. This Agreement will be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies ornational securities exchanges as may be required. e. All obligations of the Company under the Plan and this Agreement will be binding on any successor to the Company, whether theexistence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/orassets of the Company. * * * This Restricted Stock Unit Award Agreement will be deemed to be signed by you upon the signing by you of the Restricted Stock Unit Award GrantNotice to which it is attached. -51- Exhibit 10.72 CHROMADEX CORPORATION EXECUTIVE EMPLOYMENT AGREEMENT for MARK FRIEDMAN This Executive Employment Agreement (this “Agreement”) is entered into as of January 22, 2018 (the “Effective Date”), by and between MarkFriedman (“Executive”) and ChromaDex Corporation, a Delaware corporation (the “Company”). 1. Employment by the Company. 1.1 Position. Commencing on the Effective Date, Executive shall serve as the Company’s General Counsel and Corporate Secretary,reporting to the Company’s President and Chief Operating Officer. During the term of Executive’s employment with the Company, Executive will devoteExecutive’s commercially reasonable efforts and substantially all of Executive’s business time and attention to the business of the Company, except forapproved paid time off and reasonable periods of illness or other incapacities permitted by the Company’s general employment policies and applicable law. 1.2 Duties and Location. Executive shall perform such duties as are customarily associated with the position of General Counsel andSecretary and such other duties, commensurate with his position, as are assigned to Executive by the President and Chief Operating Officer, or the Company’sBoard of Directors (the “Board”). Executive’s primary office location shall be in the Los Angeles, California area. The Company reserves the right toreasonably require Executive to perform Executive’s duties at the Company’s offices in Irvine, California as required for the performance of his duties and forbusiness meetings with Company employees or representatives of third parties, and to require reasonable business travel. 1.3 Policies and Procedures. The employment relationship between the parties shall be governed by the general employment policies andpractices of the Company, except that when the terms of this Agreement differ from or are in conflict with the Company’s general employment policies orpractices, this Agreement shall control. -1- 2. Compensation. 2.1 Base Salary. Executive will receive an initial base salary at the annual rate of $300,000, less standard payroll deductions andwithholdings and payable in accordance with the Company’s regular payroll schedule. The base salary may be increased from time to time. The base salarymay not be decreased, other than a decrease of less than ten percent (10%) of Executive’s highest base salary pursuant to a salary reduction programapplicable generally to the Company’s senior executives. The initial base salary, as increased or decreased, shall be referred to as “Base Salary.” 2.2 Annual Bonus. In addition to base salary, Executive will be eligible to earn discretionary annual incentive compensation (the“Performance Bonus”), based on the achievement of individual and corporate performance targets and metrics to be determined and approved by the Boardor the Compensation Committee thereof. The Performance Bonus, if earned, will be paid on an annual basis, less standard payroll deductions andwithholdings, after the close of the fiscal year and after determination by the Board (or the Compensation Committee thereof) of the level of achievement ofthe applicable performance targets and metrics and the level of the bonus amount, but not later than March 15 of the following calendar year. No PerformanceBonus amount is guaranteed and, in addition to the other conditions for earning such Performance Bonus, Executive must remain an employee in goodstanding of the Company on the scheduled annual Performance Bonus payment date in order to earn any Performance Bonus, except as otherwise providedherein. -2- 2.3 Stock Options. Subject to the approval of the Board, the Company will grant Executive options (pursuant to the “inducementexception” provided under NASDAQ Listing Rule 5635(c)(4) and the terms of the Company’s 2017 Equity Incentive Plan (the “Plan”) and applicable law)(the “Options”) to purchase 500,000 shares of the Company’s common stock for an exercise price equal to the fair market value on the date of the grant. One-third of the shares subject to the Option shall vest on the one year anniversary of the vesting commencement date of the Option, and the remaining sharessubject to the Option shall vest in a series of 24 equal monthly installments thereafter, subject to Executive’s Continuous Service (as defined in the Plan) oneach such vesting date. Notwithstanding anything to the contrary set forth in the Plan or any award agreement, if the Company consummates a Change inControl (as that term is defined in the Plan) and subject to (i) Executive’s Continuous Service through the date of the consummation of the Change in Controlor (ii) termination of the Executive’s Continuous Service by the Company without Cause or by the Executive for Good Reason within 90 days prior to theconsummation of a Change in Control, Executive shall vest immediately prior to such Change in Control as to 100% of his otherwise unvested time-basedequity awards (the “Single Trigger Acceleration”), provided, however, that in exchange for the Single Trigger Acceleration, the Company may requireExecutive to execute and deliver to the Company a signed and dated general release of all known and unknown claims in substantially the form attachedhereto as Exhibit A (the “Release”) within the applicable deadline set forth therein. The Company will register the shares subject to the Option on aRegistration Statement on Form S-8 as soon as reasonably practicable after the Effective Date. 3. Standard Company Benefits. Executive shall, in accordance with Company policy and the terms and conditions of the applicable Companybenefit plan documents, be eligible to participate in the benefit and fringe benefit programs provided by the Company to its senior executive officers fromtime to time. Any such benefits shall be subject to the terms and conditions of the governing benefit plans and policies and may be changed by the Companyin its discretion. 4. Expenses. The Company will reimburse Executive for reasonable travel, entertainment or other expenses incurred by Executive in furtherance orin connection with the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy as in effect from timeto time. 5. Proprietary Information Obligations. 5.1 Proprietary Information Agreement. As a condition of employment, and in consideration for the benefits provided for in thisAgreement, Executive shall sign and comply with the Company’s Employee Confidential Information and Invention Assignment Agreement (the“Proprietary Information Agreement”) attached hereto as Exhibit B. In addition, Executive agrees to abide by the Company’s internally publishedpolicies and procedures, as may be modified and internally published from time to time within the Company’s discretion. 5.2 Third-Party Agreements and Information. Executive represents and warrants that Executive’s employment by the Company does notconflict with any prior employment or consulting agreement or other agreement with any third party, and that Executive will perform Executive’s duties tothe Company without violating any such agreement. The Company acknowledges and agrees that Executive will remain subject to the attorney clientprivilege with respect to his prior employment. Executive represents and warrants that Executive does not possess confidential information arising out ofprior employment, consulting, or other third party relationships, that would be used in connection with Executive’s employment by the Company, except asexpressly authorized by that third party. During Executive’s employment by the Company, Executive will use in the performance of Executive’s duties onlyinformation that is generally known and used by persons with training and experience comparable to Executive’s own, common knowledge in the industry,otherwise legally in the public domain, or obtained or developed by the Company or by Executive in the course of Executive’s work for the Company. -3- 6. Outside Activities and Non-Competition During Employment. 6.1 Outside Activities. Throughout Executive’s employment with the Company, Executive may engage in civic and not-for-profit activities(including continuing his role as a member of the Board of Directors of Bet Tzedek Legal Services) and manage his and his family’s passive investments, solong as such activities do not materially interfere with the performance of Executive’s duties hereunder or present a conflict of interest with the Company orits affiliates. Subject to the restrictions set forth herein, and only with prior written disclosure to and consent of the Board, Executive may engage in othertypes of business or public activities. The Board may rescind such consent, if the Board determines, in its sole discretion, that such activities compromise orthreaten to compromise the Company’s or its affiliates’ business interests or conflict or compete with Executive’s duties to the Company or its affiliates. 6.2 Non-Competition During Employment. Except as otherwise provided in this Agreement, during Executive’s employment with theCompany, Executive will not, without the prior written consent of the Board, directly or indirectly serve as an officer, director, stockholder, employee,partner, proprietor, investor, joint venturer, associate, representative or consultant of any person or entity engaged in, or planning or preparing to engage in,business activity competitive with any line of business engaged in (or planned to be engaged in) by the Company; provided, however, that Executive maypurchase or otherwise acquire up to (but not more than) one percent (1%) of any class of securities of any enterprise (without participating in the activities ofsuch enterprise) if such securities are listed on any national or regional securities exchange. 7. Termination of Employment; Severance. 7.1 At-Will Employment. Executive’s employment relationship is at-will. Either Executive or the Company may terminate theemployment relationship at any time, with or without Cause (as defined below) or advance notice (other than the notice requirements expressly set forth inSection 12). 7.2 Termination Without Cause or Resignation for Good Reason. In the event Executive’s employment with the Company is terminatedby the Company without Cause (and other than as a result of Executive’s death or Disability (as defined below)) or Executive resigns his employment forGood Reason, then provided such termination or resignation constitutes a “separation from service” (as defined under Treasury Regulation Section 1.409A-1(h), without regard to any alternative definition thereunder, a “Separation from Service”), and provided that Executive satisfies the Release Requirement inSection 8 below, the Company shall provide Executive with the following “Severance Benefits”: 7.2.1 Severance Payments. Severance pay in the form of continuation of Executive’s Base Salary for a periodof twelve (12) months following termination, subject to required payroll deductions and tax withholdings (the “Severance Payments”). Subject to Section 8below, the Severance Payments shall be made on the Company’s regular payroll schedule in effect following Executive’s termination date; provided,however that any such payments that are otherwise scheduled to be made prior to the Release Effective Date (as defined below) shall instead accrue and bemade on the first administratively practicable payroll date following the Release Effective Date. For such purposes, Executive’s final Base Salary will becalculated prior to giving effect to any reduction in Base Salary that would give rise to Executive’s right to resign for Good Reason. -4- 7.2.2 Health Care Continuation Coverage Payments. (i) COBRA Premiums. If Executive timely elects continued coverage under COBRA, the Company will payExecutive’s COBRA premiums to continue Executive’s coverage (including coverage for Executive’s eligible dependents, if applicable) (“COBRAPremiums”) through the period starting on the termination date and ending twelve (12) months after the termination date (the “COBRA Premium Period”);provided, however, that the Company’s provision of such COBRA Premium benefits will immediately cease if during the COBRA Premium Period Executivebecomes eligible for group health insurance coverage through a new employer or Executive ceases to be eligible for COBRA continuation coverage for anyreason, including plan termination. In the event Executive becomes covered under another employer’s group health plan or otherwise ceases to be eligible forCOBRA during the COBRA Premium Period, Executive must immediately notify the Company of such event. (ii) Special Cash Payments in Lieu of COBRA Premiums. Notwithstanding the foregoing, if the Companydetermines, in its sole discretion, that it cannot pay the COBRA Premiums without potentially incurring financial costs or penalties under applicable law(including, without limitation, 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 the termination date, a fullytaxable cash payment equal to the applicable COBRA premiums for that month (including the amount of COBRA premiums for Executive’s eligibledependents), subject to applicable tax withholdings (such amount, the “Special Cash Payment”), for the remainder of the COBRA Premium Period.Executive may, but is not obligated to, use such Special Cash Payments toward the cost of COBRA premiums. 7.2.3 Equity Acceleration upon Termination. Notwithstanding anything to the contrary set forth in the Plan or any awardagreement, effective as of Executive’s employment termination date, the vesting and exercisability of the then unvested time-based vesting equity awardsthat would have otherwise become vested had Executive performed Continuous Service through the one year anniversary of Executive’s employmenttermination date then held by Executive shall accelerate and become immediately vested and exercisable, if applicable, by Executive upon such terminationand shall remain exercisable, if applicable, following Executive’s termination as set forth in the applicable equity award documents. With respect to anyperformance-based vesting equity award, such award shall continue to be governed in all respects by the terms of the applicable equity award documents.Upon any such termination, Executive shall have three (3) years to exercise any options or stock appreciation rights, but no later than ten (10) years from thedate of grant or the date when the options or stock appreciation rights would otherwise terminate under the Plan other than as a result of termination ofemployment (e.g., if all of the Company’s options are accelerated and terminate if not exercised in connection with a Change in Control (as that term isdefined in the Plan), then Executive’s options will also terminate if not exercised in connection with the Change in Control). 7.2.4 Pro Rata Bonus. Executive shall be eligible to receive, based on the good faith determination of the Board or the CompensationCommittee thereof, a pro rata Performance Bonus based on actual results and Executive’s period of employment during the fiscalyear in which termination occurred (the “Pro Rata Bonus”), on the date when other bonuses are paid for the fiscal year. 7.2.5 No Mitigation or Offset. The Executive shall have no obligation to mitigate the obligations hereunder, and the amounts duehereunder shall not be offset by any amounts otherwise earned by Executive. -5- 7.3 Termination for Cause; Resignation Without Good Reason; Death or Disability. Executive will not be eligible for, or entitled to anyseverance benefits, including (without limitation) the Severance Benefits listed in Section 7.2 above, if the Company terminates Executive’s employment forCause, Executive resigns Executive’s employment without Good Reason, or Executive’s employment terminates due to Executive’s death or Disability,provided that the Executive, in the case of death or Disability termination, shall be eligible to receive a Pro Rata Bonus. 8. Conditions to Receipt of Severance Benefits. To be eligible for any of the Severance Benefits pursuant to Section 7.2 above, Executive mustsatisfy the following release requirement (the “Release Requirement”): return to the Company a signed and dated Release within the applicable deadline setforth therein, but in no event later than forty-five (45) calendar days following Executive’s termination date, and permit the Release to become effective andirrevocable in accordance with its terms (such effective date of the Release, the “Release Effective Date”). No Severance Benefits will be provided hereunderprior to the Release Effective Date. Accordingly, if Executive refuses to sign and deliver to the Company an executed Release or signs and delivers to theCompany the Release but exercises Executive’s right, if any, under applicable law to revoke the Release (or any portion thereof), then Executive will not beentitled to any severance, payment or benefit under this Agreement. 9. Accrued Amounts. On any termination, the Executive shall promptly receive earned but unpaid Base Salary, accrued but unused vacations andunreimbursed expenses (in accordance with the Company’s applicable expense reimbursement policies), and shall be entitled to any amounts due under anybenefit or fringe plan or program in accordance with the provisions of the plan or program. 10. Section 409A. It is intended that all of the severance benefits and other payments payable under this Agreement satisfy, to the greatest extentpossible, the exemptions from the application of Code Section 409A provided under Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9), and this Agreement will be construed to the greatest extent possible as consistent with those provisions, and to the extent not so exempt, this Agreement(and any definitions hereunder) will be construed in a manner that complies with Section 409A. For purposes of Code Section 409A (including, withoutlimitation, for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), Executive’s right to receive any installment payments under this Agreement(whether severance payments, reimbursements or otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, eachinstallment payment hereunder shall at all times be considered a separate and distinct payment. Any reference to termination or similar words shall mean aseparation from service under the meaning of Code Section 409A. Notwithstanding any provision to the contrary in this Agreement, if Executive is deemedby the Company at the time of Executive’s Separation from Service to be a “specified employee” for purposes of Code Section 409A(a)(2)(B)(i), and if any ofthe payments upon Separation from Service set forth herein and/or under any other agreement with the Company are deemed to be “deferred compensation”,then to the extent delayed commencement of any portion of such payments is required in order to avoid a prohibited distribution under Code Section409A(a)(2)(B)(i) and the related adverse taxation under Section 409A, such payments shall not be provided to Executive prior to the earliest of (i) theexpiration of the six-month and one day period measured from the date of Executive’s Separation from Service with the Company, (ii) the date of Executive’sdeath or (iii) such earlier date as permitted under Section 409A without the imposition of adverse taxation. Upon the first business day following theexpiration of such applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this Section 10 shall be paid in a lump sum toExecutive, and any remaining payments due shall be paid as otherwise provided herein or in the applicable agreement. No interest shall be due on anyamounts so deferred. If any severance benefits provided under this Agreement constitutes “deferred compensation” under Section 409A, for purposes ofdetermining the schedule for payment of the severance benefits, the effective date of the Release will be the sixtieth (60th) date following the SeparationFrom Service, regardless of when the Release actually becomes effective. To the extent required to avoid accelerated taxation and/or tax penalties underCode Section 409A, amounts reimbursable to Executive under this Agreement shall be paid to Executive on or before the last day of the year following theyear in which the expense was incurred, amounts shall not be subject to liquidation or exchange for another benefit, and the amount of expenses eligible forreimbursement (and in-kind benefits provided to Executive) during any one year may not effect amounts reimbursable or provided in any subsequent year.The Company makes no representation that any or all of the payments described in this Agreement will be exempt from or comply with Code Section 409A. -6- 11. Section 280G; Limitations on Payment. 11.1 If any payment or benefit Executive will or may receive from the Company or otherwise (a “280G Payment”) would (i) constitute a“parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 ofthe Code (the “Excise Tax”), then any such 280G Payment provided pursuant to this Agreement (a “Payment”) shall be equal to the Reduced Amount. The“Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to theExcise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount (i.e., the amount determined by clause (x) or by clause(y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highestapplicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of thePayment may be subject to the Excise Tax. If a reduction in a Payment is required pursuant to the preceding sentence, the reduction shall occur in the manner(the “Reduction Method”) that results in the greatest after tax economic benefit for Executive. If more than one method of reduction will result in the sameafter tax economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”). 11.2 Notwithstanding any provision of Section 11.1 to the contrary, if the Reduction Method or the Pro Rata Reduction Method wouldresult in any portion of the Payment being subject to taxes pursuant to Section 409A that would not otherwise be subject to taxes pursuant to Section 409A,then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be modified so as to avoid the imposition of taxes pursuant toSection 409A as follows: (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest after tax economic benefit forExecutive as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events (e.g., being terminated without Cause),shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are “deferredcompensation” within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaningof Section 409A. 11.3 Unless Executive and the Company agree on an alternative accounting firm or law firm, the accounting firm engaged by the Companyfor general tax compliance purposes as of the day prior to the effective date of the Change in Control transaction shall perform the foregoing calculations. Ifthe accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Controltransaction, the Company shall appoint a nationally recognized accounting or law firm to make the determinations required by this Section 11. TheCompany shall bear all expenses with respect to the determinations by such accounting or law firm required to be made hereunder. The Company shall usecommercially reasonable efforts to cause the accounting or law firm engaged to make the determinations hereunder to provide its calculations, together withdetailed supporting documentation, to Executive and the Company within fifteen (15) calendar days after the date on which Executive’s right to a 280GPayment becomes reasonably likely to occur (if requested at that time by Executive or the Company) or such other time as requested by Executive or theCompany. 11.4 If Executive receives a Payment for which the Reduced Amount was determined pursuant to clause (x) of Section 11.1 and the InternalRevenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, Executive agrees, to the extent not in violation of theSarbanes-Oxley Act, to promptly return to the Company a sufficient amount of the Payment (after reduction pursuant to clause (x) of Section 11.1) so that noportion of the remaining Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y) ofSection 11.1, Executive shall have no obligation to return any portion of the Payment pursuant to the preceding sentence. -7- 12. Definitions. 12.1 Cause. For the purposes of this Agreement, “Cause” means the occurrence of any one or more of the following: (i) Executive’sconviction of or plea of guilty or nolo contendere to any felony; (ii) Executive’s willful and continued failure or refusal to follow lawful and reasonableinstructions of the Company or the Board or lawful, reasonable, material and internally published policies and regulations of the Company; (iii) Executive’swillful and continued failure to faithfully and diligently perform the assigned duties of Executive’s employment with the Company (other than on account ofillness or excused absence); (iv) unethical or fraudulent conduct by Executive that materially discredits the Company or is materially detrimental to thereputation, character and standing of the Company; or (v) Executive’s material breach of this Agreement or the Proprietary Information Agreement. An eventdescribed in Section 12.1(ii) through Section 12.1(v) herein shall not be treated as “Cause” until after Executive has been given written notice of such event,failure, conduct or breach and Executive fails to cure such event, failure, conduct or breach within 30 calendar days from such written notice; provided,however, that such 30 calendar day cure period shall not be required if the event, failure, conduct or breach is incapable of being cured. 12.2 Good Reason. For purposes of this Agreement, Executive shall have “Good Reason” for resignation from employment with theCompany if any of the following actions are taken by the Company without Executive’s prior written consent: (i) a reduction in Executive’s Base Salary,other than a reduction by less than ten percent (10%) of the Executive’s highest Base Salary pursuant to a salary reduction program applicable generally tothe Company’s senior executives; (ii) a material reduction in Executive’s duties (including responsibilities and/or authorities) or reporting lines; (iii) arelocation of Executive’s principal place of employment to a place that increases Executive’s one-way commute by more than thirty (30) miles as comparedto Executive’s then-current principal place of employment immediately prior to such relocation (excluding any relocation to the Company’s Irvine,California office); or (iv) a material breach of this Agreement. In order for Executive to resign for Good Reason, each of the following requirements must bemet: (w) Executive must provide written notice to the Company’s Board within 30 days after the first occurrence of the event giving rise to Good Reasonsetting forth the basis for Executive’s resignation, (x) Executive must allow the Company at least calendar 30 days from receipt of such written notice to curesuch event, (y) such event is not reasonably cured by the Company within such 30 calendar day period (the “Cure Period”), and (z) Executive must resignfrom all positions Executive then holds with the Company not later than calendar 30 days after the expiration of the Cure Period. 12.3 Disability. For purposes of this Agreement, “Disability” means that Executive is unable to perform the essential functions of hisposition (notwithstanding the provision of any reasonable accommodation) by reason of any medically determinable physical or mental impairment whichhas lasted for a period of one hundred and twenty (120) days during any consecutive six (6) month period. 13. Dispute Resolution. To ensure the rapid and economical resolution of disputes that may arise in connection with Executive’s employment withthe Company, Executive and the Company agree that any and all disputes, claims, or causes of action, in law or equity, including but not limited to statutoryclaims, arising from or relating to the enforcement, breach, performance, or interpretation of this Agreement, Executive’s employment with the Company, orthe termination of Executive’s employment with the Company, will be resolved pursuant to the Federal Arbitration Act, 9 U.S.C. §1-16, and to the fullestextent permitted by law, by final, binding and confidential arbitration conducted in Irvine, California by JAMS, Inc. (“JAMS”) or its successors by a singlearbitrator. Both Executive and the Company acknowledge that by agreeing to this arbitration procedure, they each waive the right to resolve any suchdispute through a trial by jury or judge or administrative proceeding. Any such arbitration proceeding will be governed by JAMS’ then applicable rules andprocedures for employment disputes, which will be provided to Executive upon request. In any such proceeding, the arbitrator shall: (i) have the authority tocompel adequate discovery for the resolution of the dispute and to award such relief as would otherwise be permitted by law; and (ii) issue a writtenarbitration decision including the arbitrator’s essential findings and conclusions and a statement of the award. Executive and the Company each shall beentitled to all rights and remedies that either would be entitled to pursue in a court of law. Nothing in this Agreement is intended to prevent either theCompany or Executive from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration pursuant toapplicable law. The Company shall pay all filing fees in excess of those which would be required if the dispute were decided in a court of law, and shall paythe arbitrator’s fees and any other fees or costs unique to arbitration. The parties shall pay their own legal fees. Any awards or orders in such arbitrations maybe entered and enforced as judgments in the federal and state courts of any competent jurisdiction. -8- 14. General Provisions. 14.1 Notices. Any notices provided must be in writing and will be deemed effective upon the earlier of personal delivery (includingpersonal delivery by fax) or the next day after sending by overnight carrier, to the Company at its primary office location and to Executive at the address aslisted on the Company payroll. 14.2 Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and validunder applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule inany jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will bereformed, construed and enforced in such jurisdiction to the extent possible in keeping with the intent of the parties. 14.3 Waiver. Any waiver of any breach of any provisions of this Agreement must be in writing to be effective, and it shall not thereby bedeemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement. 14.4 Complete Agreement. This Agreement, together with the Proprietary Information Agreement, the Indemnity Agreement (as definedbelow) and to the extent referenced in this Agreement, the Plan and applicable award agreement, constitutes the entire agreement between Executive and theCompany with regard to the subject matter hereof and is the complete, final, and exclusive embodiment of the Company’s and Executive’s agreement withregard to this subject matter. This Agreement is entered into without reliance on any promise or representation, written or oral, other than those expresslycontained herein, and it supersedes and replaces any other agreements or promises made to Executive by anyone concerning Executive’s employment terms,compensation or benefits, whether oral or written (including but not limited any agreements or promises with or from the Company or any of its affiliates orpredecessors). It cannot be modified or amended except in a writing signed by a duly authorized officer of the Company, with the exception of those changesexpressly reserved to the Company’s discretion in this Agreement. 14.5 Counterparts. This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more thanone party, but both of which taken together will constitute one and the same Agreement. 14.6 Headings. The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereofnor to affect the meaning thereof. 14.7 Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and theCompany, and their respective successors, assigns, heirs, executors and administrators, except that Executive may not assign any of Executive’s dutieshereunder, Executive may not assign any of Executive’s rights hereunder without the written consent of the Company, which shall not be withheldunreasonably, and the Company may not assign this Agreement, except to an Affiliate (as defined in the Plan) or to a successor in connection with a Changein Control. 14.8 Tax Withholding. All payments and awards contemplated or made pursuant to this Agreement will be subject to withholdings ofapplicable taxes in compliance with all relevant laws and regulations of all appropriate government authorities. Executive acknowledges and agrees that theCompany has neither made any assurances nor any guarantees concerning the tax treatment of any payments or awards contemplated by or made pursuant tothis Agreement. Executive has had the opportunity to retain a tax and financial advisor and fully understands the tax and economic consequences of allpayments and awards made pursuant to this Agreement. -9- 14.9 Choice of Law. All questions concerning the construction, validity and interpretation of this Agreement will be governed by the lawsof the State of California. 14.10 Indemnification Agreement. Executive will become a party to the Company’s standard form of indemnity agreement for directorsand officers as filed as an exhibit to the Company’s most recent Annual Report on Form 10-K (the “Indemnity Agreement”). -10- In Witness Whereof, this Agreement shall be effective as of the Effective Date. ChromaDex Corporation By: /s/ ROBERT FRIED ROBERT FRIED President and Chief Operating Officer Executive By: /s/ MARK FRIEDMAN MARK FRIEDMAN -11- Exhibit 21.1 Subsidiaries of ChromaDex Corporation – As of December 30, 2017  Exhibit 23.1 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM’S CONSENT We consent to the incorporation by reference in the Registration Statement of ChromaDex Corporation and Subsidiaries on Form S-3 and as amended [FileNo. 333-222064, File No. 333-221245, File No. 333-218634 and File No. 333-203204] and on Form S-8 [File No. 333-221247, File No. 333-221246, File No.333-196434, File No. 333-168029, File No. 333-154403 and File No. 333-154402] of our report dated March 15, 2018, with respect to our audits of theconsolidated financial statements of ChromaDex Corporation and Subsidiaries as of December 30, 2017 and December 31, 2016 and for the years endedDecember 30, 2017, December 31, 2016 and January 2, 2016 and our report dated March 15, 2018 with respect to our audit of the effectiveness of internalcontrol over financial reporting of ChromaDex Corporation and Subsidiaries as of December 30, 2017, which reports are included in this Annual Report onForm 10-K of ChromaDex Corporation and Subsidiaries for the year ended December 30, 2017. /s/ Marcum LLP Marcum LLPNew York, NYMarch 15, 2018  Exhibit 31.1 Certification 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 the registrant’s board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which 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 15, 2018/s/ FRANK L. JAKSCH JR.Frank L. Jaksch Jr.Chief Executive Officer(Principal Executive Officer)  Exhibit 31.2 Certification of the Principal Financial OfficerPursuant to§240.13a−14 or §240.15d−14 of the Securities Exchange Act of 1934, as amended I, Kevin Farr, 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 the registrant’s board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which 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 15, 2018/s/ KEVIN FARRKevin FarrChief Financial Officer(Principal Accounting Officer)  Exhibit 32.1 Certification Pursuant to 18 U.S.C. Section 1350(as adopted pursuant to Section 906 of the Sarbanes−Oxley Act of 2002) In connection with this annual report of ChromaDex Corporation (the “Company”) on Form 10−K for the year ending December 30, 2017 as filedwith the Securities and Exchange Commission on the date hereof (the “Report”), we, Frank L. Jaksch Jr., Chief Executive Officer of the Company, and KevinFarr, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes−Oxley Act of 2002,that, to our knowledge: 1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; 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 15, 2018/s/ FRANK L. JAKSCH JR.Frank L. Jaksch Jr.Chief Executive Officer /s/ KEVIN FARRKevin FarrChief Financial 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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