What changed in this filing

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Item 1. Financial Statements

2024-08-07 compared with 2024-05-08 · 164 added, 67 removed, 626 unchanged (27% of the section changed)

3 unchanged sentences

(In thousands except par values, unless otherwise indicated)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Current assets

27 unchanged sentences

authorized 150,000 shares;

75,153 shares and 74,981 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively

75,473 shares and 74,981 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 221,612 218,845

7 unchanged sentences

(In thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2024 2023 2024 2023

Sales, net $ 22,739 $ 20,323 $ 44,892 $ 42,879

16 unchanged sentences

(In thousands, unless otherwise indicated)

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Common Stock Additional Paid-in Capital Accumulated Deficit Cumulative Translation Adjustments Total Stockholders' Equity

Shares Amount

Balance, January 1, 2024 74,981 $ 75 $ 218,845 $ ( 190,460 ) $ ( 4 ) $ 28,456

Balance, April 1, 2024 75,153 $ 75 $ 219,829 $ ( 190,952 ) $ ( 1 ) $ 28,951

Issuance of common stock resulting from the exercise of stock options 257 — 598 — — 598

Issuance of restricted stock 63 — — — — —

2 unchanged sentences

Net loss — — — ( 15 ) — ( 15 )

Balance, March 31, 2024 75,153 $ 75 $ 219,829 $ ( 190,952 ) $ ( 1 ) $ 28,951

Three Months Ended March 31, 2023

Balance, June 30, 2024 75,473 $ 75 $ 221,612 $ ( 190,967 ) $ ( 2 ) $ 30,718

Three Months Ended June 30, 2023

Common Stock Additional Paid-in Capital Accumulated Deficit Cumulative Translation Adjustments Total Stockholders' Equity

Shares Amount

Balance, April 1, 2023 74,666 $ 74 $ 215,367 $ ( 187,424 ) $ — $ 28,017

Issuance of restricted stock 190 1 — — — 1

Share-based compensation — — 1,324 — — 1,324

Translation adjustment — — — — ( 1 ) ( 1 )

Net loss — — — ( 2,191 ) — ( 2,191 )

Balance, June 30, 2023 74,856 $ 75 $ 216,691 $ ( 189,615 ) $ ( 1 ) $ 27,150

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

ChromaDex Corporation and Subsidiaries

Unaudited Condensed Consolidated Statements of Stockholders' Equity Continued

(In thousands, unless otherwise indicated)

Six Months Ended June 30, 2024

Common Stock Additional

Paid-in Capital Accumulated

Deficit Cumulative

Adjustments Total

Stockholders'

Shares Amount

Balance, January 1, 2024 74,981 $ 75 $ 218,845 $ ( 190,460 ) $ ( 4 ) $ 28,456

Exercise of stock options 257 — 598 — — 598

Issuance of restricted stock 210 — — — — —

1 unchanged sentence

Translation adjustment — — — — 2 2

Net loss — — — ( 507 ) — ( 507 )

Balance, June 30, 2024 75,473 $ 75 $ 221,612 $ ( 190,967 ) $ ( 2 ) $ 30,718

Six Months Ended June 30, 2023

Common Stock Additional

Paid-in Capital Accumulated Deficit Cumulative Translation Adjustments Total Stockholders' Equity

Shares Amount

Balance, January 1, 2023 74,567 $ 74 $ 214,094 $ ( 185,493 ) $ ( 3 ) $ 28,672

Issuance of restricted stock 289 1 — — — 1

Share-based compensation — — 2,597 — — 2,597

Translation adjustment — — — — 2 2

Adjustment to retained earnings, cumulative effect of initially adopting ASC 326 — — — ( 29 ) — ( 29 )

Net loss — — — ( 4,093 ) — ( 4,093 )

Balance, March 31, 2023 74,666 $ 74 $ 215,367 $ ( 187,424 ) $ — $ 28,017

Balance, June 30, 2023 74,856 $ 75 $ 216,691 $ ( 189,615 ) $ ( 1 ) $ 27,150

See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows From Operating Activities

5 unchanged sentences

Share-based compensation expense 2,169 2,597

(Gain) Loss on disposal of leasehold improvements and equipment 1 ( 5 )

Allowance for credit losses 47 751

7 unchanged sentences

Accrued expenses ( 872 ) 742

Deferred revenue — ( 149 )

Customer deposits and other ( 37 ) 11

3 unchanged sentences

Purchases of leasehold improvements and equipment ( 53 ) ( 101 )

Proceeds from the sale of leasehold improvements and equipment, net — 5

Net cash used in investing activities ( 53 ) ( 96 )

Cash Flows From Financing Activities

Proceeds from exercise of stock options 598 —

Payment of debt issuance costs ( 11 ) —

Principal payments on finance leases ( 5 ) ( 11 )

Net cash used in financing activities ( 14 ) ( 1 )

Net cash provided by (used in) financing activities 582 ( 11 )

Net increase in cash and cash equivalents 560 5,965

15 unchanged sentences

NAD+ levels in humans have been shown to decline with age, among other factors, and may be increased through supplementation with NAD+ precursors.

ChromaDex is the innovator behind the NAD+ precursor nicotinamide riboside (NR), commercialized as the flagship ingredient Niagen®.

Nicotinamide riboside and other NAD+ precursors are protected by ChromaDex’s patent and/or licensed rights portfolio.

The Company delivers Niagen® as the sole active ingredient in its dietary supplement consumer product Tru Niagen®.

The Company further develops and commercializes proprietary-based ingredient technologies and supplies these ingredients as raw materials to the manufacturers of food and supplement consumer products.

Additionally, the Company offers natural product fine chemicals, known as phytochemicals, and related research and development services.

ChromaDex is the innovator behind the NAD+ precursor nicotinamide riboside chloride (“NRC”, commonly referred to as “NR”), commercialized as the flagship ingredient Niagen®, available in both food and pharmaceutical grades.

Nicotinamide riboside chloride and other NAD+ precursors are protected by ChromaDex’s patent and/or licensed rights portfolio.

The Company delivers food-grade Niagen® as the sole or principal dietary ingredient in its dietary supplement consumer product line, Tru Niagen®.

As part of its consumer product offerings, the Company offers NAD+ test kits exclusively to healthcare practitioners.

Furthermore, the Company develops and commercializes proprietary ingredient technologies, including food-grade Niagen® and pharmaceutical-grade Niagen®, and supplies these ingredients as raw materials to the manufacturers of consumer products and U.S.

FDA-registered 503B outsourcing facilities, respectively.

Additionally, the Company provides natural product fine chemicals, known as phytochemicals, and related research and development services.

Basis of Presentation and Significant Accounting Policies

34 unchanged sentences

Evaluation of Ability to Maintain Current Level of Operations

In connection with the preparation of these U naudited C ondensed Consolidated Financial Statements for the three months ended March 31, 2024, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Company’s ability to meet its obligations as they became due over the next twelve months from the date of issuance of the Company’s first quarter of 2024 interim U naudited C ondensed Consolidated Financial Statements.

In connection with the preparation of these U naudited C ondensed Consolidated Financial Statements for the six months ended June 30, 2024, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Company’s ability to meet its obligations as they became due over the next twelve months from the date of issuance of the Company’s second quarter of 2024 interim U naudited C ondensed Consolidated Financial Statements.

Management assessed that there were such conditions and events, including a history of recurring operating losses and a history of negative cash flows from operating activities.

For the three months ended March 31, 2024, t he Company incurred a net loss of $ 0.5 million, however, during the same period the Company’s operating activities provided cash of $ 0.3 million.

As of March 31, 2024, the Company had unrestricted cash and cash equivalents of $ 27.4 million which consists of bank deposits and short-term investments, including highly liquid investment-grade debt instruments with an original maturity of three months or less.

For the six months ended June 30, 2024, t he Company incurred a net loss of $ 0.5 million and the Company’s operating activities provided cash of $ 31,000 .

As of June 30, 2024, the Company had unrestricted cash and cash equivalents of $ 27.7 million which consists of bank deposits and short-term investments, including highly liquid investment-grade debt instruments with an original maturity of three months or less.

The fair value of the Company’s cash and cash equivalents is derived using Level 1 inputs.

4 unchanged sentences

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 three months ended March 31, 2024 and 2023:

Three Months Ended March 31,

The following table sets forth the computations of loss per share amounts applicable to common stockholders for the three and six months ended June 30, 2024 and 2023:

Three Months Ended June 30, Six Months Ended June 30,

(In thousands, except per share data) 2024 2023 2024 2023

6 unchanged sentences

Restricted stock units 784 774 784 774

(1) Includes a weighted average of approximately 167,000 and 183,000 nonvested shares of restricted stock for the three months ended March 31, 2024 and 2023, respectively, which are participating securities that feature voting and dividend rights.

(1) Includes a weighted average of approximately 167,000 nonvested shares of restricted stock for each of the three and six months ended June 30, 2024 and 181,000 and 182,000 nonvested shares of restricted stock for the three and six months ended June 30, 2023, 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.

2 unchanged sentences

• Consumer Products segment:

provides finished dietary supplement products that contain the Company's proprietary ingredients directly to consumers as well as to distributors;

provides finished dietary supplement products that contain the Company's proprietary ingredients directly to consumers and distributors and offers NAD+ test kits exclusively to healthcare practitioners;

• Ingredients segment :

develops and commercializes proprietary-based ingredient technologies and supplies these ingredients as raw materials to the manufacturers of consumer products;

develops and commercializes proprietary-based ingredient technologies, including food-grade Niagen® and pharmaceutical-grade Niagen®, and supplies these ingredients as raw materials to the manufacturers of consumer products and U.S.

FDA-registered 503B outsourcing facilities, respectively;

• Analytical Reference Standards and Services segment:

10 unchanged sentences

The following tables set forth financial information by segment:

Three Months Ended March 31, 2024 Consumer Products segment Ingredients segment Analytical Reference Standards and Services segment Corporate and other Total

Three months ended June 30, 2024 Consumer Products segment Ingredients segment Analytical Reference Standards and Services segment Corporate and other Total

(In thousands)

8 unchanged sentences

Operating income (loss) $ 3,950 $ 1,509 $ ( 51 ) $ ( 5,664 ) $ ( 256 )

Three Months Ended March 31, 2023 Consumer Products segment Ingredients segment Analytical Reference Standards and Services segment Corporate and other Total

Three months ended June 30, 2023 Consumer Products segment Ingredients segment Analytical Reference Standards and Services segment Corporate and other Total

(In thousands)

1 unchanged sentence

Cost of sales 5,959 1,232 776 — 7,967

Gross profit (loss) 10,932 1,472 ( 48 ) — 12,356

Operating expenses:

Sales and marketing 5,892 19 98 — 6,009

Research and development 1,169 196 — — 1,365

General and administrative — — — 7,298 7,298

Operating expenses 7,061 215 98 7,298 14,672

Operating income (loss) $ 3,871 $ 1,257 $ ( 146 ) $ ( 7,298 ) $ ( 2,316 )

Six Months Ended June 30, 2024 Consumer Products segment Ingredients segment Analytical Reference Standards and Services segment Corporate and other Total

(In thousands)

Net sales $ 35,998 $ 7,389 $ 1,505 $ — $ 44,892

Cost of sales 12,939 3,382 1,422 — 17,743

Gross profit 23,059 4,007 83 — 27,149

7 unchanged sentences

Notes to the Unaudited Condensed Consolidated Financial Statements

Six Months Ended June 30, 2023 Consumer Products segment Ingredients segment Analytical Reference Standards and Services segment Corporate and other Total

(In thousands)

Net sales $ 34,524 $ 6,828 $ 1,527 $ — $ 42,879

Cost of sales 12,363 3,113 1,529 — 17,005

Gross profit (loss) 22,161 3,715 ( 2 ) — 25,874

Operating expenses:

Sales and marketing 13,665 37 181 — 13,883

Research and development 2,136 422 — — 2,558

General and administrative — — — 13,717 13,717

Operating expenses 15,801 459 181 13,717 30,158

Operating income (loss) $ 6,360 $ 3,256 $ ( 183 ) $ ( 13,717 ) $ ( 4,284 )

Disaggregation of Revenue

1 unchanged sentence

Disaggregated revenues are as follows:

Three Months Ended March 31, 2024 Consumer Products Segment Ingredients Segment Analytical Reference Standards and Services Segment Total

Three Months Ended June 30, 2024 Consumer Products Segment Ingredients Segment Analytical Reference Standards and Services Segment Total

(In thousands)

8 unchanged sentences

Total Net Sales $ 18,647 $ 3,301 $ 791 $ 22,739

Three Months Ended March 31, 2023 Consumer Products Segment Ingredients Segment Analytical Reference Standards and Services Segment Total

Three Months Ended June 30, 2023 Consumer Products Segment Ingredients Segment Analytical Reference Standards and Services Segment Total

(In thousands)

8 unchanged sentences

Total Net Sales $ 16,891 $ 2,704 $ 728 $ 20,323

ChromaDex Corporation and Subsidiaries

Notes to the Unaudited Condensed Consolidated Financial Statements

Six Months Ended June 30, 2024 Consumer Products Segment Ingredients Segment Analytical Reference Standards and Services Segment Total

(In thousands)

Tru Niagen®, Consumer Product $ 35,998 $ — $ — $ 35,998

Niagen® Ingredient

— 7,232 — 7,232

Subtotal Niagen® Related 35,998 7,232 — 43,230

Other Ingredients — 157 — 157

Reference Standards — — 1,436 1,436

Consulting and Other — — 69 69

Subtotal Other Goods and Services — 157 1,505 1,662

Total Net Sales $ 35,998 $ 7,389 $ 1,505 $ 44,892

Six Months Ended June 30, 2023 Consumer Products Segment Ingredients Segment Analytical Reference Standards and Services Segment Total

(In thousands)

Tru Niagen®, Consumer Product $ 34,524 $ — $ — $ 34,524

Niagen® Ingredient

— 6,398 — 6,398

Subtotal Niagen® Related 34,524 6,398 — 40,922

Other Ingredients — 430 — 430

Reference Standards — — 1,468 1,468

Consulting and Other — — 59 59

Subtotal Other Goods and Services — 430 1,527 1,957

Total Net Sales $ 34,524 $ 6,828 $ 1,527 $ 42,879

Disclosure of Major Customers

1 unchanged sentence

Percentage of net sales from major customers of the Company’s consumer products segment and ingredients segment for the periods indicated were as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Major Customers 2024 2023 2024 2023

Watson Group - Related Party 16.4 % 14.7 % 14.9 % 15.6 %

Life Extension * 10.0 % 11.4 % *

* Represents less than 10%

ChromaDex Corporation and Subsidiaries

2 unchanged sentences

Percentage of the Company's Total Trade Receivables

Major Customers At March 31, 2024 At December 31, 2023

Major Customers At June 30, 2024 At December 31, 2023

Watson Group - Related Party 44.7 % 52.7 %

1 unchanged sentence

Life Extension 16.6 % 16.1 %

As of March 31, 2024, concentration for the Company's outstanding trade receivables is significant, with approximately 80 % of the total outstanding trade receivables aggregated among three customers.

* Represents less than 10%

As of June 30, 2024, concentration for the Company's outstanding trade receivables is significant, with approximately 61 % of the total outstanding trade receivables aggregated among two customers.

Whenever a significant concentration is present it poses a potential risk to the Company's financial performance and cash flows, as any adverse changes in the payment behavior or financial health of these major customers could impact the Company's cash flows and financial results.

6 unchanged sentences

The sale of consumer products and corresponding trade receivables to related parties during the periods indicated are as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Net Sales 2024 2023 2024 2023

Watson Group - Related Party $ 3.0 million $ 3.7 million

Trade Receivable as of March 31, 2024 December 31, 2023

Watson Group - Related Party $ 3.7 million $ 3.0 million $ 6.7 million $ 6.7 million

Trade Receivable as of June 30, 2024 December 31, 2023

Watson Group - Related Party $ 3.5 million $ 2.8 million

The Company's major classes of inventory and corresponding balances as of March 31, 2024 and December 31, 2023 are as follows:

(In thousands) March 31, 2024 December 31, 2023

The Company's major classes of inventory and corresponding balances as of June 30, 2024 and December 31, 2023 are as follows:

(In thousands) June 30, 2024 December 31, 2023

Consumer Products - Finished Goods $ 5,123 $ 5,962

12 unchanged sentences

Operating Leases

As of March 31, 2024 and December 31, 2023, the Company had ROU assets of $ 2.2 million and $ 2.4 million, respectively, and corresponding operating lease liabilities of $ 3.2 million and $ 3.3 million, respectively.

For the three months ended March 31, 2024 and 2023, the components of operating lease expenses are as follows:

Three Months Ended March 31,

As of June 30, 2024 and December 31, 2023, the Company had ROU assets of $ 2.1 million and $ 2.4 million, respectively, and corresponding operating lease liabilities of $ 3.1 million and $ 3.3 million, respectively.

For the three and six months ended June 30, 2024 and 2023, the components of operating lease expenses are as follows:

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2024 2023 2024 2023

6 unchanged sentences

(1) Variable lease costs, including property taxes and insurance and common area maintenance fees, are classified in cost of services in the Company's Unaudited Condensed Consolidated Statements of Operations.

At March 31, 2024

At June 30, 2024

Weighted-average remaining lease term (years), operating leases 3.4

Weighted-average discount rate, operating leases 7.1 %

Future minimum lease payments under operating leases as of March 31, 2024 are as follows:

Future minimum lease payments under operating leases as of June 30, 2024 are as follows:

Year (In thousands)

10 unchanged sentences

The number of shares available to be issued under the 2017 Plan will be reduced by (i) one share for each share that relates to an option or stock appreciation right award and (ii) 1.5 shares for each share which relates to an award other than a stock option or stock appreciation right award (a full-value award).

As of March 31, 2024, there were approximately 3.1 million remaining shares available for issuance under the 2017 Plan.

As of June 30, 2024, there were approximately 3.9 million remaining shares available for issuance under the 2017 Plan.

Options expire 10 years from the date of grant.

9 unchanged sentences

Stock Options

The Company used the following weighted average assumptions for options granted during the three months ended March 31, 2024:

The Company used the following weighted average assumptions for options granted during the six months ended June 30, 2024:

Weighted Average:

Three Months Ended March 31, 2024

Six Months Ended June 30, 2024

Expected term 6.4 years

5 unchanged sentences

Service Period Based Stock Options

The following table summarizes activity of service period-based stock options during the three months ended March 31, 2024 :

The following table summarizes activity of service period-based stock options during the six months ended June 30, 2024 :

Weighted Average

7 unchanged sentences

Options Forfeited ( 1,546 ) 4.75

Outstanding at March 31, 2024 12,845 $ 3.14 6.6 $ 12,472 *

Exercisable at March 31, 2024 7,563 $ 4.08 4.6 $ 3,189 *

*The aggregate intrinsic values in the table above are based on the Company’s stock price of $ 3.48 , which is the closing price of the Company’s stock on the last trading day for the period ended March 31, 2024.

Outstanding at June 30, 2024 11,881 $ 2.99 6.7 $ 6,176 *

Exercisable at June 30, 2024 7,168 $ 3.81 4.9 $ 1,411 *

*The aggregate intrinsic values in the table above are based on the Company’s stock price of $ 2.73 , which is the closing price of the Company’s stock on the last trading day for the period ended June 30, 2024.

Performance Based Stock Options

1 unchanged sentence

If these performance criteria are not met, the compensation expenses are not recognized and the expenses that have been recognized will be reversed.

The following table summarizes performance based stock options activity during the three months ended March 31, 2024 :

The following table summarizes performance based stock options activity during the six months ended June 30, 2024 :

Weighted Average

7 unchanged sentences

Options Forfeited ( 41 ) 4.34

Outstanding at March 31, 2024 — $ — — $ — *

Exercisable at March 31, 2024 — $ — — $ — *

There were no activities related to market-based stock options or restricted stock awards during the three months ended March 31, 2024.

Outstanding at June 30, 2024 — $ — — $ — *

Exercisable at June 30, 2024 — $ — — $ — *

There were no activities related to market-based stock options or restricted stock awards during the six months ended June 30, 2024.

ChromaDex Corporation and Subsidiaries

1 unchanged sentence

Restricted Stock Units

The following table summarizes activity of RSUs during the three months ended March 31, 2024 :

The following table summarizes activity of RSUs during the six months ended June 30, 2024 :

(In thousands except per share fair value) Number of RSUs Weighted Average

3 unchanged sentences

Forfeited ( 74 ) 1.75

Unvested shares at March 31, 2024 894 $ 1.74

Expected to vest at March 31, 2024 894 $ 1.74

Unvested shares at June 30, 2024 784 $ 1.70

Expected to vest at June 30, 2024 784 $ 1.70

Total Share-Based Compensation

Total share-based compensation expense was as follows:

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2024 2023 2024 2023

4 unchanged sentences

General and administrative (1)

658 676 1,121 1,233

Total $ 1,185 $ 1,324 $ 2,169 $ 2,597

4 unchanged sentences

The Company relied on the exemption from the registration requirements of the Securities Act by virtue of Section 4(a)(2) thereof and Rule 506 of Regulation D thereunder.

In future periods, the Company expects to recognize approximately $ 5.7 million and $ 1.4 million in share-based compensation expense for unvested options and unvested RSUs, respectively, that were outstanding as of March 31, 2024.

In future periods, the Company expects to recognize approximately $ 5.0 million and $ 1.1 million in share-based compensation expense for unvested options and unvested RSUs, respectively, that were outstanding as of June 30, 2024.

Future share-based compensation expense will be recognized over 2.0 weighted average years for both unvested options and RSUs.

The Company also has total unrecognized share-based compensation expense of $ 1.0 million pertaining to the Joint Venture.

Such expense will only be recognized if Blue Hat Registration is achieved, the timing of which is uncertain as of March 31, 2024.

Such expense will only be recognized if Blue Hat Registration is achieved, the timing of which is uncertain as of June 30, 2024.

For additional discussion of the Joint Venture, see Note 12, Joint Venture Agreement .

83 unchanged sentences

On February 26, 2024, the court approved the joint stipulation and adopted the parties’ proposed briefing schedule.

ChromaDex filed its opening brief on April 26, 2024.

Defendants must file their opposition brief no later than June 25, 2024 and ChromaDex must file its reply brief no later than July 25, 2024.

The matter is scheduled to be heard on August 12, 2024.

On April 26, 2024, ChromaDex filed its opening brief in support of its motion for entry of final judgment.

On June 3, 2024, the California Action was reassigned to a different judge.

On June 25, 2024, Defendants filed their opposition to ChromaDex’s motion for entry of final judgment.

ChromaDex filed its reply brief on July 25, 2024.

The matter was previously scheduled to be heard on August 12, 2024, but, following the reassignment of the case, the hearing on this matter was rescheduled to August 15, 2024.

(B) Southern District of New York Action

48 unchanged sentences

All discovery closed on April 23, 2021.

The Court vacated a previously scheduled joint pretrial order and trial date because of COVID-19, and the Court has informed the Parties that trial date will be rescheduled in November or December 2021.

The Court vacated a previously scheduled joint pretrial order and trial date because of COVID-19, and the Court informed the Parties that trial date would be rescheduled in November or December 2021.

Both parties filed dispositive and Daubert motions on June 4, 2021.

83 unchanged sentences

On April 9, 2024, the Court entered a stipulated schedule and procedure for resolving the amount of fees and costs.

On May 23, 2024, Elysium filed its opening brief.

On June 6, 2024, ChromaDex filed its response brief.

On June 13, 2024, Elysium filed its reply brief.

The issue is now fully briefed and awaiting a ruling by the Court.

In connection with the Court's current ruling and the Company’s intention to appeal this decision, management has assessed that it is reasonably possible a contingent liability will be incurred.

26 unchanged sentences

During the years ended December 31, 2023 and December 31, 2022, the Company collected $ 0.9 million and $ 0.6 million, respectively, related to the ERTC.

On September 14, 2023, the IRS announced an immediate halt in processing new claims for the employee retention credit until at least the end of the year, citing ongoing concerns about improper claims.

On September 14, 2023, the Internal Revenue Services (IRS) announced a moratorium in processing new claims for the employee retention credit, citing ongoing concerns about improper claims.

The IRS guaranteed ongoing processing of existing claims, albeit at a reduced pace and with increased compliance scrutiny.

1 unchanged sentence

Nevertheless, the Company is diligently monitoring the situation to ensure continued compliance.

As of March 31, 2024, the Company's Consolidated Balance Sheets include an ERTC benefit of $ 0.9 million and associated commissions payable of $ 0.1 million recorded within prepaid expenses and other current assets and accrued expenses, respectively.

As of June 30, 2024, the Company's Consolidated Balance Sheets include an ERTC benefit of $ 0.9 million and associated commissions payable of $ 0.1 million recorded within prepaid expenses and other current assets and accrued expenses, respectively.

Joint Venture Agreement

12 unchanged sentences

The equity interest will only vest if Blue Hat Registration is achieved, at which time the minority interest will be recorded.

As of March 31, 2024, it is uncertain when Blue Hat Registration will be achieved.

Consequently, no amounts related to the Blue Hat Registration Fee or the 11 % non-voting interest have been recognized in the Unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2024.

As of June 30, 2024, it is uncertain when Blue Hat Registration will be achieved.

ChromaDex Corporation and Subsidiaries

3 unchanged sentences

Once Blue Hat Registration is complete and certain distribution agreements relating to the commercialization of the Products in the Territory are assigned and entered into (the “Distribution Agreements”), Taikuk would be entitled to certain royalty payments based on the Company’s and the JV’s net revenue for sales of the Products in the Territory under the Distribution Agreements.

Operating activity under the JV was not material during the three months ended March 31, 2024 and 2023.

During the first quarter of 2024, the Company was notified that it was selected for examination by the Internal Revenue Service (IRS) for its federal income tax return for the fiscal year 2021 period.

Operating activity under the JV was not material during the three and six months ended June 30, 2024 and 2023.

During the first quarter of 2024, the Company was notified that it was selected for examination by the IRS for its federal income tax return for the fiscal year 2021 period.

The Company is not currently under examination by any other major income tax jurisdiction.

Subsequent Events

Effective July 12, 2024, Brianna Gerber, the Company’s former Chief Financial Officer and Chief Accounting Officer, separated from the Company.

Gerber has entered into a Letter Agreement and Consulting Agreement, under which she will be available to consult on financial and accounting matters for the Company until August 12, 2024.

Effective July 13, 2024, the Board of Directors appointed James Lee, the Company’s current Controller, as the Company’s Interim Chief Financial Officer and Interim Principal Accounting Officer.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements