Investor Presentation
Rob Fried Chief Executive Officer
Kevin Farr Chief Financial Officer
Nasdaq: CDXC | May 2021 1 WHO WE ARE
We are a global bioscience company dedicated to healthy aging.
The ChromaDex team, which includes world-renowned scientists, is pioneering research on nicotinamide adenine dinucleotide (NAD+), levels of which decline with age.
ChromaDex is the innovator behind NAD+ precursor nicotinamide riboside (NR), commercialized as the flagship ingredient Niagen®. Nicotinamide riboside and other NAD+ precursors are protected by ChromaDex’s patent portfolio. ChromaDex delivers Niagen® as the sole active ingredient in its consumer product Tru Niagen® available at www.truniagen.com and through partnerships with global retailers and distributors. This presentation and other written or oral statements made from time to time by representatives of ChromaDex contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements reflect the current view about future events. Statements that are not historical in nature, such as 2021 financial outlook, and which may be identified by the use of words like “expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,” “could be,” "future" or the negative of these terms and other words of similar meaning, are forward-looking statements. Such statements include, but are not limited to, statements contained in this presentation relating to our expected sales, cash flows and financial performance, business, business strategy, expansion, growth, products and services we may offer in the future and the timing of their development, sales and marketing strategy and capital outlook, and the timing and results of pre-clinical and clinical trials. Forward-looking statements are based on management’s current expectations and assumptions regarding our business, the economy and other future conditions and are subject to inherent risks, uncertainties and changes of circumstances that are difficult to predict and may cause actual results to differ materially from those contemplated or expressed. We caution you therefore against relying on any of these forward- looking statements. These risks and uncertainties include those risk factors discussed in Part I, “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities Exchange Commission (the “Commission”), and in our other periodic filings with the Commission. Any forward-looking statements are qualified in their entirety by reference to the factors discussed in these filings with the Commission. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those SAFE HARBOR anticipated, believed, estimated, expected, intended or planned. Important factors that could cause actual results to differ materially from those in the forward looking statements include: the effect of the COVID-19 pandemic on our business, results of operations, financial condition and cash flows; a decline in general STATEMENT economic conditions nationally and internationally; 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; inability to raise capital to fund continuing operations; changes in government regulation; and the ability to complete customer transactions and capital raising transactions.
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. We cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.
About Non-GAAP Financial Measures ChromaDex’s non-GAAP financial measures exclude interest, income tax, depreciation, amortization, non-cash share-based compensation costs, severance and restructuring expense, bad debt expense related to Elysium Health and total legal expense for adjusted EBITDA excluding total legal expense. ChromaDex used these non-GAAP measures when evaluating its financial results as well as for internal resource management, planning and forecasting purposes. These non-GAAP measures should not be viewed in isolation from or as a substitute for ChromaDex’s financial results in accordance with GAAP. Reconciliation of GAAP to non-GAAP measures are attached to this presentation.
FDA Disclaimer Statements made in this presentation have not been evaluated by the Food and Drug Administration. ChromaDex products are not intended to diagnose, treat, cure, or prevent any disease. The statements in this presentation are for investor relations and educational purposes only and not intended for consumers or vendors.
SAFE HARBOR STATEMENT 3 ChromaDex Investment Highlights
1 PROVEN & PROPRIETARY NAD+ 3 STEADY E-COMMERCE GROWTH BOOSTING SUPPLEMENT AND EXPANDING GLOBAL • Total 2020 net sales of $59 million with $47 DISTRIBUTION FOOTPRINT million of Tru Niagen® net sales • E-commerce represents ~60% of the business • Tru Niagen® is the most efficient way to today, including North America, Europe, and safely elevate NAD+ Asia • Safety profile backed by 11 clinical trials and • Expanded to UK and Australia in 2020 global regulatory approvals • Launching in Walmart U.S. in 2021 • Strong IP protection with 20+ owned or • Strong blue-chip partners include A.S. Watson, licensed patents Nestlé Health Science, W.R. Grace, and two new partners in 2021 in H&H Group and Ro
2 SIGNIFICANT OPPORTUNITY 4 STRONG MOMENTUM AND DRIVEN BY TRENDS IN HEALTH & FINANCIAL DISCIPLINE WELLNESS • Revenue CAGR of 44% and gross margin • Global anti-aging market of ~$410 billion with increase from 48% to 60%+ since strategic dietary supplements growing 6%(1) pivot to focus on consumer product, Tru • Tru Niagen® gaining share in healthy aging Niagen®(2) and fitness categories; potential to expand to • Approaching cash flow break-even, as larger addressable markets measured by Adjusted EBITDA excluding • Exploring adjacent categories for Niagen® total legal expense(3) such as pet and infant nutrition • Investing in brand building and R&D in 2021 given rapid growth in NAD+ market (1) ChromaDex estimates. See slide 23 for details (2) Period from Q1 2017 to Q1 2021. Quarterly sales. (3) Non-GAAP metric. See slide 37 for details.
4 The Science
The information contained in this documents is confidential, privileged and only for the information of the intended recipient and may not be used, published or redistributed without the prior written consent (2019) NAD+ declines by ~50% between the age of 40 and 60
6 What is NAD+ and Why is it Essential?
Nicotinamide Adenine Dinucleotide (NAD+)… ATP • Is the mission critical co-enzyme in NAD+ cellular metabolism that is constantly being consumed and created by Food cells
• Plays a vital role in: ADP + P • Cellular defense and repair CO2 NADH i • Energy production and the optimal function of our cells’ powerhouses (the mitochondria)
7 Basic Physiological Functions are NAD+ Dependent
INTRINSIC CAPACITY DOMAIN Based on World Health Organization’s definition
COGNITION LOCOMOTION VITALITY PSYCHOLOGICAL SENSORY
Memory Muscle strength Energy metabolism Mood Vision
Intelligence Balance Hormonal function Emotional vitality Hearing
Problem-solving Gait Cardio-respiratory function
8 NR Clinical Trial Pipeline Snapshot*
COGNITION LOCOMOTION VITALITY PSYCHOLOGICAL SENSORY
# of Active Studies 6 6 13 0 4
# of Studies Completed 1 3 8 0 0
* Source: Based on Niagen® NR trials registered on clinicaltrials.gov and/or ChromaDex Material Transfer Agreements. Used ChromaDex classification into intrinsic capacity domains. As of May 10, 2021. Chart does not include pharmacokinetic studies.
9 NAD+ Declines with Age, Physiological Stress & Disease
AGING NAD Muscle 30-85% NAD+ OVERNUTRITION Liver 40-90% Muscle 66-100% Adipose 55-75% Liver 25-100% Brain 35-90% Adipose 15-20% Pancreas 80-85% Blood Plasma 46% Spleen 35-40% Heart 30-70% NAD Kidney 15-98% Lung 20-25% AXONAL DEGENERATION Cerebrospinal fluid 86% Skin 40-50% Nerve 30% Blood plasma 15-92% Brain 53% Testes 100%
Decreases in tissue NAD levels by tissue type and condition (as a % of baseline) Observed in human tissue (otherwise, based on rodents). Not intervention studies but correlated NAD levels in tissues with age.
Based on Yoshino et al. (2018) Cell Metabolism
10 “With careful scientific evaluation, NAD+ replenishment strategies might serve as a promising multifunctional approach to improve the quality of life for an increasingly aged population.”
NAD+ in Aging: Molecular Mechanisms and Translational Implications
Fang EF et al. Trends Mol Med. 2017;23(10):899-916
Verdin E. Science 2015 Dec 4;350(6265):1208-13.
11 How is Nicotinamide Riboside (NR) Different than Other NAD+ Nicotinamide Riboside (NR)… Precursors?
• Novel form of Vitamin B3
• Specific pathway to convert NR into NAD+ (NRK pathway)
• More efficient NAD+ precursor than Tryptophan and Nicotinic Acid • NRK genes are activated under conditions of physiologic stress • Therefore, NR is the cell’s preferred Vitamin B3 when energy is low
• No side effects*
*In 11 published clinical trials on Niagen® there were no attributable side effects.
12 Our Solution:
The most efficient way to safely elevate NAD levels and the only patented form of nicotinamide riboside (Niagen®) available in the world.
13 Tru Niagen® is Scientifically Proven to Increase NAD+
14 Committed to Safety and Quality
15 Regulatory Approvals(1) and Health Claims for Niagen®
Country United States European Union(2) Canada Australia & NZ Food & Drug Therapeutic Goods Regulatory bodies European Commission Health Canada Administration Administration Regulatory approvals NDIN & GRAS Novel Food Ingredient Natural Health Product Complementary Medicine NAD levels ✓ ✓ ✓ Cellular energy ✓ ✓ ✓ ✓ Metabolism ✓ ✓ Nervous system ✓ Psychological & biological function ✓ ✓ Health Claims* Mitochondria ✓ for Niagen® Reduce tiredness & fatigue ✓ ✓ Skin ✓ Mucus membranes ✓ Healthy Aging ✓ *Notified or authorized claims. Terms are representative of the claim topics; fully notified or (1) Regulatory approval refers to acceptance of Niagen® for use in supplements by the regulatory bodies. authorized claim language can be (2) Received positive opinion from the European Food Safety Authority (EFSA) and approval from the European Commission (EC). Launched in retail in U.K. in 2020. provided upon request.
16 225+ Pre-Clinical & Clinical Studies on NR Represents $75MM+ of Third-Party Research
17 Most prominent human clinical research areas for Niagen® are vitality, locomotion, cognition, and sensory
VITALITY COGNITION (incl. Cardiovascular, LOCOMOTION SENSORY (Neurological) Metabolic)
Human Studies 59 % 20 % 14 % 7 %
Conditions Studied Type II Diabetes (Insulin Parkinson’s Disease Mild Concussion Neuropathies (e.g. Diabetic Sensitivity)* Neuropathy, Peripheral Ataxia Telangiectasia Mild Cognitive Impairment Neuropathy) Altered Glucose and Lipid Metabolism Exercise Capacity/Performance Alzheimer’s Disease Small Nerve Fiber Degeneration
Non-Alcoholic Fatty Liver* Muscle Function/Strength
Weight Loss Sarcopenia
Heart Failure
Hypertension
Arterial Stiffness*
Vascular Function*
Immunity/Inflammation*
Chronic Kidney Disease
Cystic Fibrosis
Note: Based on Niagen® NR trials listed on clinicaltrials.gov and ChromaDex Material Transfer Agreements – studies in progress or in planning.
18 NR Research Impact* is Accelerating
1600
1400 Vitality
1200
Vitality Locomotion Cognition 1000 Locomotion Cognition 800 Sensory Psychological 600 Pharmacokinetic/Safety Psychological Sensory
Basic Research Cumulative Impact Factor 400
200
0 *NR Research Impact by domains of Intrinsic Capacity. 2013 2014 2015 2016 2017 2018 2019 2020 2021 Chart data indexed to 2004.
19 Scientific Advisory Board
Charles Brenner, Ph.D. Roger Kornberg, Ph.D. Rudolph Tanzi, Ph.D. Alfred E Mann Family Chairman Kennedy Professor of Foundation Chair, Professor of Structural Neurology Department of Diabetes & Biology Harvard University Cancer Metabolism Stanford University City of Hope Leading Alzheimer's Nobel Prize Winner, Researcher, TIME 100 World's Foremost Authority Chemistry, 2006 Most Influential 2015 on NAD Metabolism
Dr. Bruce German Professor Sir John Brunie H. Felding, Ph.D. Chairman of Food, Nutrition, Walker, Ph.D. Associate Professor of & Health Emeritus Director, MRC Molecular Medicine University of Mitochondrial Biology Scripps Research California, Davis University of Cambridge Institute
Leader in Food, Nutrition, & Nobel Prize Winner, Renowned Breast Cancer Wellness Innovation Chemistry, 1997 Researcher focused on NAD+ supplementation
Dr. David Katz President of True Health Initiative CEO of Diet ID
World renowned physician & preventive medicine expert
20 Strong Intellectual Property Portfolio for Niagen®(1)
Patent ID (U.S.) Summary US 8114626 Manufacture of NR via recombinant microorganisms – Charles Brenner of Dartmouth College US 8197807 NR for increasing NAD biosynthesis – Charles Brenner of Dartmouth College US 8383086 Compositions comprising NR – Charles Brenner of Dartmouth College US 7776326 NR for treatment diseased and/or injured neurons by increasing Sirtuin activity – Jeffrey Milbrandt of Washington University US 9295688 NR for treatment diseased and/or injured neurons by increasing NAD activity – Jeffrey Milbrandt of Washington University US 10000519 Methods of preparing NR and derivatives thereof – Queen’s University Belfast US 10280190 NR for use in enhancing skin permeation in treating skin conditions – ChromaDex/Queen’s University Belfast US 10688118 NR for topical use in wound healing; cell motility - ChromaDex US 10857172 Method of use of NR for promoting gut health and decreasing gastrointestinal inflammation in an infant comprised in infant formula - ChromaDex
International Patent ID Country / Agency China 1964627, 105636973 Hong Kong 1218918 Europe 1755391, 3027635 Australia 2006238858, 2014342185, 2014298629, 2016233247 Canada 2609633 Japan 6208352, 6509844 South Africa 201603314, 201706918 Mexico 349969 (1) NR related patents only. ChromaDex owns or licenses additional patents related to other NAD precursors.
21 Market Opportunity Billions spent annually on looking and feeling younger
Global Addressable Market ~$410 billion (2019E)* *Rounded to nearest billion (1) (3) Personal Care, Beauty & Anti-Aging Market $154B $25B • Skin care market + cosmetic surgery + Beauty from Within supplements
Fitness / Sports Nutrition / Energy Market(2) (3) • Gym memberships + sports nutrition supplements + exercise equipment $136B
Dietary Supplements – Other(3) • E.g. Immune Health, Heart Health, Joint Health / Inflammation, General Health $98B
(3) Dietary Supplements – Meal Replacement / Weight Loss $17B • E.g. Slim Fast, Ensure, Boost (Nestlé) $9B ~2% est. share of global healthy aging (3) dietary supplements Dietary Supplements – Healthy Aging $2B category with a significant • E.g. CoQ10, DHEA, Vitamin A / Beta Carotene, Resveratrol, Homeopathics, Combination Herbs opportunity to expand into larger “anti-aging” markets (1) Statista, Skin Care Market, 2020 (face, body, sun protection, baby & child). iHealthcareanalyst.com, Global Cosmetic Surgery Procedures Market, January 2020. Nutrition Business Journal, 2020. (2) Wellness Creative Company, Fitness Market, November 2020. Nutrition Business Journal, 2019. Global Market Insights, Fitness Equipment Market, April 2020. ChromaDex estimates. (3) Nutrition Business Journal, 2019 and 2020 reports (U.S. market sizes) and ChromaDex estimates. Extrapolated global estimates assuming U.S. represents 1/3 of global sales in all categories.
23 Strategic Progress Evolution of ChromaDex
2017 Acquired Healthspan Research LLC, a 2021 consumer product Raised $25 million company offering with a new TRU Niagen® international investor branded products Partnered with Raised $48 million; Walmart to bring TRU 2012 led by Horizons Niagen® to 3,000 Acquired scientific Ventures stores in the U.S.(1) and regulatory 2019 Signed agreements consulting business Partnered with A.S. Raised $17 million; with H&H and Ro to 2000 Watson Group, Asia’s led by existing and supply Niagen® in Company formed; Licensed Dartmouth leading heath and new international specially-formulated Reference Standards patents on NR beauty retailer investors Swisse and Roman branded products
2003 2013 2018 2020 Provided analytical Commercialization of Global expansion Received EU and testing and contract NIAGEN® Australia regulatory services approval
In 2017, began strategic shift from ingredient and testing company with goal of building Tru Niagen® into a global brand
25 (1) Launching around June 2021. Management Team
Rob Fried Frank Jaksch Kevin Farr Chief Executive Officer Executive Chairman Chief Financial Officer
E-Commerce & Co-founded ChromaDex in Former CFO, Mattel entertainment industry 2000 PriceWaterhouse executive Licensed CPA Savoy Pictures, Columbia Pictures, Fried Films, FeeIn, WHN, Healthspan Research
Frank Fazio Lisa Harrington Fadi Karam SVP of Global Business General Counsel, Chief Marketing Officer Development & Sales Corporate Secretary Former Nestlé executive Over 25 years of Former Special Counsel, experience with leading Cooley LLP Deep brand building consumer brands in the experience, across healthcare industry Former General Counsel at traditional retail as well as ASICS Americas and Surf ZO Skin Health, Suneva e-commerce platforms Airlines Medical, Allergan/Inamed
26 Global Multi-Channel Distribution Strategy
CANADA(a) UK(b) Amazon Amazon CHINA Truniagen.ca Superdrug Truniagen.cn Selected Retailers April 2020 April 2019 Tmall JD.com FRANCE GERMANY Amazon Kaola JAPAN Amazon Amazon SPAIN Amazon ITALY Amazon
HONG KONG SINGAPORE Watsons Watsons January 2018 September 2017
AUSTRALIA Matakana Health Ltd. March 2020 NEW ZEALAND
Matakana Health Ltd. Cross September 2018 Retail border
Tru Niagen® now available in 13 countries. Launched in U.K. and Australia in 2020 following regulatory approval. Launching in Walmart U.S. in 2021. a) Tru Niagen® was launched on www.truniagen.ca and to health care practitioners at Fullscript Canada in December 2018. It was previously sold on www.amazon.ca. Expanded to WELL Health in April 2019 and Whole Foods Market Ontario in July 2019. 27 b) Tru Niagen® was launched on Amazon U.K. in June 2018. Launched Tru Niagen® with Superdrug in April 2020. E-Commerce Platform Drives Consumer Insights
28 Strong Global Partners
➢ World’s largest international health & beauty ➢ Announced global supply agreement in ➢ Announced that Tru Niagen® will be available in retailer (~15,000 stores)(1) December 2018 3,000 retail stores across the United States ➢ Europe ~9,000 stores beginning June 2021 ➢ Asia ~6,000 stores ➢ Exclusive rights in medical nutrition ➢ Two packaging options for customers at ➢ Extended partnership through mid-September ➢ Co-exclusive rights in certain protein-based different serving sizes and price points 2021 in Hong Kong, Macau, and Singapore beverages ➢ Same-day delivery for online orders and in-store ➢ Launched Celltrient™ Cellular Energy featuring pickup options for select locations Tru Niagen® in 2020
(1) Includes all stores owned by A.S. Watson Group. Statistics as of Q2 2018.
29 Nestlé Health Science Supply Agreement Market Size – 2018 Est. Key Terms of the Agreement ➢ Upfront payment: $4MM ➢ Cash received in Q1 2019 ➢ Amortized as revenue over term of the agreement (2036)(3) 61% ➢ Few major players ➢ Nestlé exclusivity: ~$2.0Bil(1) ➢ Nestlé Health Science ➢ Exclusive rights in medical nutrition has a significant share ➢ Co-exclusive rights in certain protein-based beverages 39% ➢ Nestlé territories: ➢ North America, Europe, Latin America, ANZ, Japan
➢ Product launch milestones: Up to an aggregate of $6MM ➢ U.S. launch milestone of $1MM - cash collected in Q4 2020, amortized as revenue over term of the agreement (2036) (3)
(2) 76% ➢ Few major players ~$16Bil ➢ Nestlé Health Science ➢ Other revenue: has a significant share ➢ Ingredient sales 24% ➢ Low to high single digit royalties on wholesale sales ➢ Near-term hurdles: U.S. International ➢ Technical feasibility, regulatory, market testing ➢ Nestlé had an exit clause if technical feasibility was not achieved by the end of 2019. This clause has expired. Long-term opportunity to grow the TRU NIAGEN business (1) Supplement Nutrition Drinks category per Euromonitor, in wholesale dollars. (2) Medical Nutrition category per Grand View Research, in wholesale dollars. 30 (3) Estimated based on ingredient shipments each quarter relative to estimated quantities over term of agreement. Estimates will be revised quarterly and revenue trued-up if necessary. For more information about Nestlé Health Science and its businesses, visit www.nestlehealthscience.com. Financial Highlights Steady Growth – Tru Niagen®
(In $ millions) Tru Niagen®Chart Sales Title by Quarter 5 YoY growth
4.5 +12% +22% +21% +34% $12.4 4 +50% $11.9 $12.3 $11.7 +57% $11.1 3.5 +86% +134% $10.2 $2.9 $2.8 $9.7 $3.3 3 +146% $8.7 $2.9 $3.6 $2.2 +143% $7.5 $2.6 2.5 $2.2 +97% $6.5 $1.5 2 $5.2 $1.2 +2528% $0.8 $9.5 $9.6 1.5 $3.7 $8.7 $7.9 $8.2 $8.1 $3.0 $0.3 $7.1 $2.6 $2.7 $5.9 $6.5 1 $5.2 $1.2 $4.4 $2.3 $1.9 $3.5 $1.80.5 $0.3 $0.8 Q3 2017 Q4 2017 Q1 20180 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Category 1 Category 2 Category 3 Category 4 Ecommerce Watsons/Other Tru Niagen® sales have steadily increased every quarter since inception, driven by continued growth in the e-Commerce and Watson’s businesses 32 Q1 2021 Net Sales Mix
Q1 2020 Q1 2021
e-Commerce 57% e-Commerce 65% Watson's & Other B2B Watson's & Other 20% B2B $14.3MM $14.7MM 20%
Niagen® Ingredient Niagen® Ingredient 8% 14%
Other Ingredients Analytical Reference 4% Standards & Services (1) Analytical Reference Other Ingredients 6% Standards & Services (1) 1% 5%
➢ Tru Niagen® net sales increased to 85% of net sales in Q1 2021 compared to 80% in Q4 2020 (2) ➢ Niagen®-related net sales decreased to 93% of net sales in Q1 2021 compared to 94% in Q4 2020 (3)
Higher mix of Tru Niagen® e-Commerce sales and lower Niagen® ingredient sales.
(1) Analytical Reference Standards and Services previously reported as Core (2) Tru Niagen® net sales include e-Commerce, Watson’s/Other B2B 33 (3) Niagen®-related sales include Tru Niagen® and Niagen® ingredient Q1 2021 vs Q4 2020 Key P&L Metrics
(in thousands) Q1 2021 Q4 2020 Notes Tru Niagen® business up 1% driven by global e-Commerce and recent international launches, largely offset by lower Watson’s sales Net Sales $ 14,683 $ 15,445 driven by COVID-19 supply chain disruptions. Niagen® ingredient sales lower since no longer selling to Thorne.
Gross Profit Up 190bps driven by product cost savings initiatives, overall scale 9,234 9,421 on supply chain overhead and favorable mix (higher e-commerce 62.9% 61.0% % of Net Sales sales) Selling and Marketing 6,258 6,319 Investments in digital marketing and brand building initiatives % of Net Sales 42.6% 40.9%
Research and Development 824 991 Down slightly due to timing of projects
Increased litigation activity. Excluding legal fees, severance & General and Administrative 9,514 8,192 restructuring, and equity compensation expense, G&A was down by $0.5MM.
Other 0 0 No other expenses in either quarter
Total Operating Expense 16,596 15,502 Higher G&A expense driven by legal, partially offset by lower R&D
Primarily driven by investments to protect our intellectual property Operating Loss $ (7,362) $ (6,081) against infringers
34 Q1 2021 vs Q1 2020 Key P&L Metrics
(in thousands) Q1 2021 Q1 2020 Notes Tru Niagen® business up 12% with growth in global e-commerce and recent international launches. Watson’s sales down slightly Net Sales $ 14,683 $ 14,345 driven by COVID-19 supply chain disruptions and challenging prior year comparison (initial ship-in for Tru Niagen® Beauty launch).
Gross Profit Up 500bps driven by product cost savings initiatives, overall scale 9,234 8,311 on supply chain overhead and favorable mix (higher e-commerce 62.9% 57.9% % of Net Sales sales) Selling and Marketing 6,258 4,447 Investments in digital marketing and brand building initiatives % of Net Sales 42.6% 31.0%
Research and Development 824 919 Down year-over-year due to timing of R&D projects
Increased litigation activity. Excluding legal fees, severance & General and Administrative 9,514 8,835 restructuring, and equity compensation expense, G&A was down by $0.2 million.
Other 0 0 No expenses in either quarter
Investments in selling and marketing and higher G&A expense Total Operating Expense 16,596 14,201 driven by legal, partially offset by lower R&D expense
Higher sales and gross margins and higher overall operating Operating Loss $ (7,362) $ (5,890) expense due to investments to grow the business and protect our IP
35 Adjusted EBITDA Summary
Reconciliation of Non-GAAP Financial Measures (In thousands)
Mar. 31, Jun. 30, Sep. 30, Dec. 31, Mar. 31, Jun. 30, Sep. 30, Dec. 31, Mar. 31, 2019 2019 2019 2019 2020 2020 2020 2020 2021
Net loss, as reported $ (8,337) $ (7,755) $ (7,202) $ (8,853) $ (5,902) $ (3,711) $ (4,215) $ (6,097) $ (7,381) Adjustments: Interest (income) expense (35) 575 314 (7) 12 24 19 16 19 Depreciation 173 190 196 203 214 218 220 219 221 Amortization of intangibles 61 61 62 62 62 60 60 61 60 Amortization of right of use assets 138 141 144 92 92 95 97 115 126 Share-based compensation 2,029 1,759 1,687 1,697 1,873 1,711 1,574 1,778 1,284 Severance and restructuring - - - 200 953 284 224 329 (10) Bad debt expense (1) - - - 2,233 - - - - - Adjusted EBITDA $ (5,971) $ (5,029) $ (4,799) $ (4,373) $ (2,696) $ (1,319) $ (2,021) $ (3,579) $ (5,681)
Total legal expense 3,250 2,926 2,944 2,226 2,380 1,844 1,896 2,468 5,010
Adjusted EBITDA excluding total legal expense $ (2,721) $ (2,103) $ (1,855) $ (2,147) $ (316) $ 525 $ (125) $ (1,111) $ (671)
Q1 2021 Adjusted EBITDA, excluding legal expenses was ($0.7) million, a decline of $0.4 million year-over-year driven by higher operating expenses to grow the business and protect our IP, partially offset by higher sales and gross margin 36 (1) Q4 2019 includes $2.2 million of bad debt expense related to the write-off of Elysium accounts receivable. Recent Capital Raise Further Strengthens Balance Sheet
Balance Sheet (in thousands) 3/31/2021 $25MM Cash $44,691 including Proceeds from Capital Raise in February 2021 Inventory 12,762
Accounts Receivable 4,647 Use of Proceeds
Accrued Liabilities 7,328 ✓Invest in R&D pipeline
Accounts Payable 11,693 ✓Invest in brand awareness campaigns Equity 43,832
With this incremental cash we have clear line of sight to cash flow break-even. 37 2021 Financial Outlook
(in thousands) 2019 Actual 2020 Actual 2021 Full Year Outlook Key Drivers
Continued, steady revenue growth, • Global e-Commerce business Net Sales $46,291 $59,257 with accelerated growth in Q2 2021 • Existing + new strategic partnerships
Gross Margin % 55.7% 59.5% Slightly better than 60% • Continued cost savings initiatives (as a % of net sales)
Selling, Marketing & Advertising • Increased investments and resources to drive Tru 39.4% 35.4% Up slightly as a % of net sales Niagen® brand awareness (as a % of net sales)
• Increased investments to accelerate R&D pipeline, Research & Development 9.5% 6.3% Roughly flat as a % of net sales including new NAD precursor development
• Investments in key personnel and infrastructure to General & Administrative(1) $20,529 $20,070 Up slightly in absolute dollars scale the business
• Higher sales and gross margins, largely offset by Modest improvement given Adjusted EBITDA excluding legal $(8,826) $(1,027) investments to scale the business in 2022 and reinvestment in the business beyond
Increased investments in 2021 to capitalize on growth in the NAD+ market globally. 38 (1) Excludes severance and restructuring expense, legal expense and Elysium-related bad debt expense (see details on slide 21). As reported, G&A was $34,308 in 2019 and $30,448 in 2020. “We are very close to achieving positive Adjusted EBITDA excluding total legal expense. As always, we will balance this near-term objective with the long-term opportunity to capitalize on growth in the NAD+ market globally.”
Kevin Farr, CFO Contact Info
Brianna Gerber Vice President of Finance and Investor Relations T: +1.949.419.0288 ext. 127 [email protected] www.chromadex.com
Where to buy Tru Niagen® www.truniagen.com www.amazon.com
40 Appendix Key Statistics
Trading Data (@ May 10, 2021) Financial Highlights (LTM ended Mar ’21)
Stock Price $7.16 Net Sales (LTM) $59.6M
52 Week High/Low $23.66/$3.82 EPS (LTM) ($0.34) Cash & Equiv. $44.7M Avg. Daily Vol. (50 day) 2,206,000 Total Assets $69.0M Shares Outstanding 67.9M Total Debt $0.0M Public Float (excl. >5% owners) 61% Total Liabilities $25.2M Insider Holdings 39% Equity $43.8M Valuation Measures
Market Cap $486M
Enterprise Value $441M
EV/Revenue (LTM) 7.4X
P/E (LTM) N/M
42 2018 – 2021 YTD Net Sales Summary
(In millions) 2018 2019 2020 2021 Description Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Ecommerce 1.8 3.5 4.4 5.2 15.0 5.9 6.5 7.1 7.9 27.5 8.2 8.1 8.7 9.5 34.5 9.6 Watsons 0.8 0.3 0.7 1.2 2.9 1.3 1.9 2.3 1.9 7.3 1.8 1.3 2.5 2.1 7.6 1.6 Other B2B 0.4 0.0 0.1 0.1 0.6 0.3 0.3 0.3 0.4 1.3 1.1 2.3 0.8 0.8 5.0 1.3 Total TRU NIAGEN 3.0 3.7 5.2 6.5 18.5 7.5 8.7 9.7 10.2 36.1 11.1 11.7 11.9 12.3 47.1 12.4 NIAGEN Ingredient 1.3 1.9 1.0 1.0 5.2 1.1 1.1 0.7 2.0 4.9 2.0 2.0 0.9 2.2 7.1 1.2 NIAGEN Related Revenues 4.3 5.7 6.2 7.4 23.6 8.6 9.8 10.5 12.1 41.0 13.1 13.7 12.8 14.6 54.2 13.6 Other Ingredients 1.1 0.9 0.9 0.5 3.4 0.4 0.3 0.5 0.1 1.3 0.5 0.9 0.6 0.1 2.1 0.1 Analytical Reference Standards & Services 1.2 1.2 1.0 1.1 4.5 1.1 1.0 1.1 0.9 4.0 0.7 0.7 0.8 0.8 3.0 0.9 Total Net Sales 6.6 7.8 8.1 9.1 31.6 10.0 11.1 12.1 13.1 46.3 14.3 15.3 14.2 15.4 59.3 14.7
TRU NIAGEN as % of Total Net Sales 46% 48% 64% 71% 58% 74% 79% 81% 78% 78% 78% 77% 84% 80% 79% 85% NIAGEN Related Revenues as % of Total Net Sales 65% 73% 77% 82% 75% 85% 88% 87% 93% 88% 91% 90% 90% 94% 91% 93%
YOY Growth Rate - Net Sales Total Company 95% 85% 33% 20% 49% 53% 42% 48% 44% 47% 43% 38% 18% 18% 28% 2% NIAGEN Related 337% 168% 40% 31% 79% 99% 73% 68% 63% 73% 53% 40% 22% 20% 32% 4% Total TRU NIAGEN NA 2528% 97% 143% 238% 146% 134% 86% 57% 96% 50% 34% 22% 21% 31% 12%
Sequential Growth Rate - Net Sales Total Company -13% 19% 4% 12% 11% 10% 9% 9% 10% 7% -7% 9% -5% NIAGEN Related -24% 32% 10% 19% 15% 15% 6% 16% 8% 5% -7% 14% -6% Total TRU NIAGEN 14% 23% 40% 24% 15% 17% 11% 4% 10% 5% 2% 4% 1%
Note – Other B2B previously referred to as International / Other
43 2020 Full Year Outlook Recap
(in thousands) 2019 Actual 2020 Outlook 2020 Actual Comments Achieved?
Total net sales grew by +28% Continued growth in sales of Net Sales $ 46,291 $ 59,257 and Tru Niagen® net sales Tru Niagen® grew by +31% year-over-year ✓
Gross Margin % Improved by +380bps year- 55.7% Continued improvement 59.5% over-year (as a % of net sales) ✓
Selling, Marketing 18,216 20,948 Up $3-5 million in absolute Up +$2.7 million and down & Advertising dollars and down as a % of -400bps as a % of net sales net sales year-over-year ✓ (as a % of net sales) 39.4% 35.4%
20,529 Up $1-2 million in absolute 20,070 Down -$0.5 million and down General & dollars and down as a % of -10,478 bps as a % of net Administrative(1) 44.3% net sales 33.2% sales year-over-year ✓
Adjusted EBITDA Improved by +$7.8 million $ (8,826) Continued improvement $ (1,027) excluding legal year-over-year ✓
Delivered on financial outlook across all metrics. Slightly better than target on selling & marketing and G&A expense.
44 (1) Excludes severance and restructuring expense, legal expense and Elysium-related bad debt expense (see details on slide 23). As reported, G&A was $34,308 in 2019 and $30,448 in 2020. FY 2020 vs FY 2019 Key P&L Metrics
(in thousands) FY 2020 FY 2019 Notes Total net sales up 28%. Tru Niagen® business up Net Sales $59,257 $46,291 31%. Diversified growth across global e-commerce platforms and with new, and existing, partners.
Gross Profit Up 390bps driven by favorable mix with growing Tru 35,274 25,769 Niagen® e-commerce business, supply chain cost 59.5% 55.7% % of Net Sales savings initiatives and overall scale
Selling and Marketing Marketing efficiency improved by 400bps driven by Tru 20,948 18,216 Niagen® business and overall scale. Invested in 35.4% 39.4% % of Net Sales initiatives to drive new customer growth.
Research and Development 3,732 4,420 Down year-over-year with focused R&D investments
Excluding legal fees, severance & restructuring, bad General and Administrative(1) 30,448 34,308 debt expense(1), and equity compensation expense, G&A was up by $0.4M
Other - 125 Miscellaneous expense
Primarily driven lower R&D and G&A expenses, Total Operating Expense 55,128 57,069 partially offset by higher selling and marketing investments
Driven by higher sales and gross margins and lower Operating Loss $ (19,854) $ (31,300) operating expense
(1) Q4 2019 includes $2.2 million of bad debt expense related to the write-off of Elysium accounts receivable. 45 Adjusted EBITDA 2020 vs 2019
ChromaDex Corporation and Subsidiaries Reconciliation of Non-GAAP Financial Measures (In thousands)
Year ended Year over Year Dec. 31, 2019 Dec. 31, 2020 Change
Net loss, as reported $ (32,147) $ (19,925) $ 12,222 Adjustments: Interest expense 847 71 (776) Depreciation 762 871 109 Amortization of intangibles 246 243 (3) Amortization of right of use assets 515 399 (116) Share-based compensation 7,172 6,936 (236) Severance and restructuring 200 1,790 1,590 Elysium-related bad debt expense 2,233 - (2,233) Adjusted EBITDA $ (20,172) $ (9,615) $ 10,557
Total legal expense 11,346 8,588 (2,758)
Adjusted EBITDA excluding total legal expense $ (8,826) $ (1,027) $ 7,799
2020 Adjusted EBITDA excluding legal expense was a loss of ($1.0) million, a $7.8 million improvement YoY. The YoY improvement was driven by higher sales and gross margins and marketing efficiency. 46 (1) 2019 includes $2.2 million of bad debt expense related to the write-off of Elysium accounts receivable.