Niagen Bioscience, Inc. 10-K

Item 8. Financial Statements and Supplementary Data Index to Consolidated Financial Statements Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 173 ) 51 Report of Independent Registered Public Accounting Firm (PCAOB ID: 688 ) 52 Consolidated Balance Sheets at December 31, 2024 and December 31, 2023 53 Consolidated Statements of Operations for the Years Ended December 31, 2024 and December 31, 2023 54 Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2024 and December 31, 2023 55 Consolidated Statements of Cash Flows for the Years Ended December 31, 2024 and December 31, 2023 56 Notes to Consolidated Financial Statements 57 50 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of ChromaDex Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of ChromaDex Corporation and Subsidiaries (the "Company") as of December 31, 2024, the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Retrospective Application of a Change in Accounting Principle We have also audited the retrospective adjustments to the 2023 financial statements for the adoption of Accounting Standards Update 2023-07, “Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures,” as discussed in Note 2 and reflected in Note 5. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to audit, review, or apply any procedures to the 2023 financial statements of the Company other than with respect to the adjustments and, accordingly, we do not express an opinion or any other form of assurance on the 2023 financial statements taken as a whole. 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 financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in 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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to 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 audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matters C ritical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ Crowe LLP Crowe LLP We have served as the Company’s auditor since 2024. Costa Mesa, California March 4, 2025 51 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Board of Directors of ChromaDex Corporation Opinion on the Financial Statements We have audited, before the effects of the retrospective adjustments to the disclosures for the adoption of ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”) discussed in Note 2 and Note 5, the accompanying consolidated balance sheet of ChromaDex Corporation and Subsidiaries (the “Company”) as of December 31, 2023, the related consolidated statements of operations, stockholders’ equity and cash flow for the year ended December 31, 2023 and the related notes (collectively referred to as the “financial statements”). In our opinion, before the effects of the retrospective adjustments to the disclosures for the adoption of ASU 2023-07 discussed in Note 2 and Note 5, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America. We were not engaged to audit, review, or apply any procedures to the retrospective adjustments to the disclosures for the adoption of ASU 2023-07 discussed in Note 2 and Note 5 to the consolidated financial statements, and accordingly, we do not express an opinion or any other form of assurance about whether such retrospective adjustments are appropriate and have been properly applied. Those retrospective adjustments were audited by other auditors. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in 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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to 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 audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ Marcum LLP Marcum LLP We have served as the Company’s auditor from 2013 to 2024. New York, NY March 6, 2024 52 Table of Contents ChromaDex Corporation and Subsidiaries Consolidated Balance Sheets (In thousands, except par values, unless otherwise indicated) December 31, 2024 2023 Assets Current assets Cash and cash equivalents, including restricted cash of $ 152 for both periods presented $ 44,660 $ 27,325 Trade receivables, net of allowances of $ 95 and $ 68 , respectively; including receivables from Related Party of zero and $ 2.8 million, respectively. 7,768 5,234 Inventories 9,192 14,525 Prepaid expenses and other assets 2,482 2,450 Total current assets 64,102 49,534 Leasehold improvements and equipment, net 1,719 2,137 Intangible assets, net 359 510 Right-of-use assets 1,730 2,400 Other long-term assets 368 383 Total assets $ 68,278 $ 54,964 Liabilities and Stockholders' Equity Current liabilities Accounts payable $ 8,526 $ 10,232 Accrued expenses 7,817 9,493 Current maturities of operating lease obligations 982 691 Current maturities of finance lease obligations 12 11 Customer deposits 611 195 Total current liabilities 17,948 20,622 Deferred revenue 2,579 3,311 Operating lease obligations, less current maturities 1,657 2,563 Finance lease obligations, less current maturities — 12 Total liabilities 22,184 26,508 Commitments and Contingencies (Notes 10 and 16) Stockholders' Equity Common stock, $ 0.001 par value; authorized 150,000 shares; 77,330 shares and 74,981 shares issued and outstanding at December 31, 2024 and December 31, 2023, respectively. 77 75 Additional paid-in capital 227,931 218,845 Accumulated deficit ( 181,910 ) ( 190,460 ) Cumulative translation adjustments ( 4 ) ( 4 ) Total stockholders' equity 46,094 28,456 Total liabilities and stockholders' equity $ 68,278 $ 54,964 See accompanying notes to consolidated financial statements. 53 Table of Contents ChromaDex Corporation and Subsidiaries Consolidated Statements of Operations (In thousands, except per share data) Year Ended December 31, 2024 2023 Sales, net $ 99,597 $ 83,570 Cost of sales 38,011 32,790 Gross profit 61,586 50,780 Operating expenses: Sales and marketing 29,469 26,438 Research and development 6,016 4,958 General and administrative 18,375 24,983 Total operating expenses 53,860 56,379 Operating income (loss) 7,726 ( 5,599 ) Nonoperating income: Interest income, net 1,129 661 Income before provision for income taxes 8,855 ( 4,938 ) Provision for income taxes 305 0 — Net income (loss) $ 8,550 $ ( 4,938 ) Net income (loss) per share attributable to common stockholders: Basic $ 0.11 $ ( 0.07 ) Diluted $ 0.11 $ ( 0.07 ) Weighted average common shares outstanding: Basic 75,929 74,985 Diluted 78,125 74,985 See accompanying notes to consolidated financial statements. 54 Table of Contents ChromaDex Corporation and Subsidiaries Consolidated Statements of Stockholders’ Equity (In thousands, unless otherwise indicated) 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 414 1 — — — 1 Share-based compensation — — 4,751 — — 4,751 Adjustment to retained earnings: Cumulative effect of initially adopting ASC 326 — — — ( 29 ) — ( 29 ) Translation adjustment — — — — ( 1 ) ( 1 ) Net loss — — — ( 4,938 ) — ( 4,938 ) Balance, December 31, 2023 74,981 $ 75 $ 218,845 $ ( 190,460 ) $ ( 4 ) $ 28,456 Issuance of restricted stock 271 — — — — — Exercise of stock options 2,053 2 5,430 — — 5,432 Share-based compensation 25 — 3,656 — — 3,656 Net income — — — 8,550 — 8,550 Balance, December 31, 2024 77,330 $ 77 $ 227,931 $ ( 181,910 ) $ ( 4 ) $ 46,094 See accompanying notes to consolidated financial statements. 55 Table of Contents ChromaDex Corporation and Subsidiaries Consolidated Statements of Cash Flows (In thousands, unless otherwise indicated) Year Ended December 31, 2024 2023 Cash Flows From Operating Activities Net income (loss) $ 8,550 $ ( 4,938 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation of leasehold improvements and equipment 663 870 Amortization of intangibles 151 158 Noncash lease expense 670 677 Share-based compensation expense 3,656 4,751 Gain on sale or disposal of leasehold improvements and equipment ( 19 ) ( 5 ) Allowance for (Recovery of) credit losses ( 1,255 ) 964 Reversal of previously accrued royalties and license maintenance fees ( 3,521 ) — Loss from impairment of intangibles — 3 Non-cash financing costs 80 75 Changes in operating assets and liabilities: Trade receivables ( 1,279 ) 2,255 Inventories 5,333 152 Implementation costs for cloud computing arrangement ( 83 ) ( 60 ) Prepaid expenses and other assets ( 45 ) 631 Accounts payable ( 1,067 ) 553 Accrued expenses 1,206 2,156 Deferred revenue ( 732 ) ( 644 ) Customer deposits and other 416 38 Operating lease liabilities ( 615 ) ( 519 ) Net cash provided by operating activities 12,109 7,117 Cash Flows From Investing Activities Purchases of leasehold improvements and equipment ( 163 ) ( 148 ) Proceeds from the sale of leasehold improvements and equipment, net 20 5 Net cash used in investing activities ( 143 ) ( 143 ) Cash Flows From Financing Activities Proceeds from exercise of stock options 5,432 — Payment of debt issuance costs ( 52 ) ( 75 ) Principal payments on finance leases ( 11 ) ( 15 ) Net cash provided by (used in) financing activities 5,369 ( 90 ) Net increase in cash and cash equivalents 17,335 6,884 Cash and cash equivalents, including restricted cash of $ 152 for both periods - beginning of year 27,325 20,441 Cash and cash equivalents, including restricted cash of $ 152 for both periods - end of year $ 44,660 $ 27,325 Supplemental Disclosures of Cash Flow Information Cash payments for interest on finance leases $ 1 $ 2 Cash payments for principal on operating lease liabilities $ 600 $ 610 Supplemental Schedule of Noncash Operating Activity Adjustment to retained earnings, cumulative effect of initially adopting ASC 326 $ — $ 29 Right-of-use assets and operating lease obligations reduced for entering into lease amendment $ — $ 446 See accompanying notes to consolidated financial statements. 56 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements Note 1. Nature of Business ChromaDex Corporation and its wholly owned subsidiaries, ChromaDex, Inc., ChromaDex International, Inc., ChromaDex Analytics, Inc., ChromaDex Asia Limited, Asia Pacific Scientific, Inc., ChromaDex Asia Pacific Ventures Limited, ChromaDex Europa B.V., ChromaDex Trading (Shanghai) Co., Ltd. and ChromaDex Sağlik Ürünleri Anonim Şirketi (collectively, “ChromaDex” or the “Company”) 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+), an essential coenzyme that is a key regulator of cellular metabolism and is found in every cell of the human body. NAD+ levels in humans have been shown to decline with age, among other factors, and may be increased through administration of NAD+ precursors. 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. Note 2. Summary of Significant Accounting Policies Basis of Presentation: The financial statements and accompanying notes have been prepared on a consolidated basis and reflect the consolidated financial position of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated from these financial statements. Use of Accounting Estimates : The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported 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 when the performance obligations are satisfied. The performance obligations are typically satisfied upon shipment of physical goods or as the services are performed over time. In addition to the satisfaction of the performance obligations, the following conditions are required for revenue recognition: an arrangement exists, there is a fixed price, and collectability is reasonably assured. Discounts, returns and allowances related to sales, including an estimated reserve for the returns and allowances, are recorded as reduction of revenue. Whenever the Company determines that goods or services promised in a contract should be accounted for as a combined performance obligation over time, the Company determines the period over which the performance obligations will be performed and revenue will be recognized. If the Company determines that the performance obligation is satisfied over time, any upfront payment received is initially recorded as deferred revenue on its consolidated balance sheets. Revenue is then recognized utilizing the output method based on an estimated rate to allocate the transaction price for this performance obligation as products are supplied over the duration of the contract. Certain judgments affect the application of the Company’s revenue recognition policy. For example, when utilizing the output method, the Company estimates total delivery volume based on the Company’s current operating plan, forecast inputs for expected purchases received from the customer, minimum purchase commitments by the customer and historical experience with similar customer contracts. Accordingly, the Company may recognize a different amount of deferred revenue over the next 12-month period if the Company’s plan changes in the future or if the customer informs the Company of changes to their expected purchases. As of December 31, 2024 and 2023, the Company held deferred revenue balances of $ 2.6 million and $ 3.3 million, respectively. Net sales include revenue generated from shipping and handling charges billed to customers. The costs directly associated with shipping and handling are integrated as a component of cost of goods sold. Shipping and handling fees billed to customers and included in net sales for the years indicated are as follows: Year Ended December 31, (In thousands) 2024 2023 Shipping and handling fees billed $ 642 $ 567 57 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements Taxes collected from customers and remitted to governmental authorities are excluded from revenue, which is presented on a net basis in the consolidated statements of operations. Cash, Cash Equivalents and Restricted Cash : All highly liquid interest-bearing investments with short terms are classified as cash equivalents. The Company’s investments primarily include investments in money market funds managed by banks. The carrying value of these cash equivalents approximate their fair value. As of December 31, 2024 and 2023, the Company had cash equivalents of $ 37.3 million and $ 17.7 million, respectively, concentrated in money market funds. The Company classifies cash as restricted when its withdrawal or usage is constrained for a period exceeding three months. As of December 31, 2024 and 2023, $ 152,000 of cash was classified as restricted, serving as collateral for letters of credit related to the Company’s office space in Los Angeles, California. The lease for the Los Angeles, California office currently expires in March 2027. Trade Receivables, net : Trade receivables are stated at their net realizable value, net of a sales allowance, an allowance for doubtful trade receivables and expected credit losses. Credit is extended to customers based on an evaluation of their financial condition and other factors. The Company establishes a sales allowance at the time of revenue recognition based on its history of adjustments and credits provided to customers. In determining the necessary allowance for doubtful trade receivables, the Company considers the current aging and financial condition of its customers, the amount of trade receivables in dispute, and current payment patterns. Trade receivables are written off against the allowance when management determines a balance is uncollectible and the Company no longer actively pursues collection of the receivable. Expected credit losses are estimated based upon historical information, current conditions and reasonable and supportable forecasts. Credit Risk : Financial instruments that potentially expose the Company to concentration of credit risk consist primarily of cash and cash equivalents and trade receivables. Cash and cash equivalents, consist of bank deposits and money market funds managed by banks . The Company maintains several bank accounts for its operations primarily at three financial institutions in the U.S. and one financial institution in Hong Kong. The Company’s U.S. bank accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 at each institution. As of December 31, 2024, the Company had approximately $ 43.0 million in uninsured cash deposits in U.S. bank accounts. All uninsured bank deposits are held at high quality credit institutions and management believes the Company is not exposed to significant credit risk due to the financial position of the depository institutions. The Company’s trade receivables are derived from sales to its customers. The Company assesses credit risk of its customers through quantitative and qualitative analysis. From this analysis, the Company establishes credit limits and manages the risk exposure. The Company, however, may from time-to-time incur credit losses due to bankruptcy or other failures from its customers to pay. Inventories : Inventories are comprised of work-in-process and finished goods. Inventories are stated at the lower of cost, determined by the first-in, first-out method, or net realizable value. The inventory on the balance sheet is recorded net of valuation allowances. Labor and overhead has been added to inventory that was manufactured or characterized by the Company. The Company’s normal operating cycle for reference standards is currently longer than one year. The Company regularly reviews inventories on hand and reduces the carrying value for slow-moving and obsolete inventory, inventory not meeting quality standards and inventory subject to expiration. The reduction of the carrying value for slow-moving and obsolete inventory is based on current estimates of future product demand, market conditions and related management judgment. Any significant unanticipated changes in future product demand or market conditions that vary from current expectations could have an impact on the value of inventories. Leasehold Improvements and Equipment, net : Leasehold improvements and equipment are comprised of leasehold improvements, laboratory equipment, furniture and fixtures, computer equipment, construction in progress and implementations costs for cloud computing arrangements. Leasehold improvements and equipment are carried at cost and depreciated on the straight-line method over the lesser of the estimated useful life of each asset or lease term. Implementation costs related to a cloud computing arrangement are deferred or expensed as incurred, in accordance with the Accounting Standards Update (ASU) 2018-15. Depreciation on equipment under finance lease is included with depreciation on owned assets. Maintenance and repairs are charged to operating expenses as incurred. Improvements and betterments, which extend the lives of the assets, are capitalized . 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 net assets 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), whichever is shorter. The useful lives of subsequent milestone payments that are capitalized are the remaining useful life of the initial licensing payment that was capitalized. 58 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements The Company’s long-lived assets are reviewed for impairment on a periodic basis or when changes in circumstances indicate the possibility that the carrying amount may not be recoverable. Long-lived assets are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets. 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 the carrying 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 cash flow methodology. During the year ended December 31, 2023, the Company identified intangible assets which were impaired. For further discussion, see Note 8, Intangible Assets, Net. No assets were impaired during the year ended December 31, 2024. Customer Deposits : Customer deposits represent cash received from customers in advance of product shipment or delivery of services. Income Taxes : Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the 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 about the timing of such deductibility. The Company files tax returns in all appropriate jurisdictions, which include a U.S. federal tax return and various state tax returns. Open tax years for these jurisdictions are 2021 to 2024, which statutes expire in 2025 to 2028, respectively. When and if applicable, potential interest and penalty costs are accrued as incurred, with expenses recognized in general and administrative expenses in the statements of operations. As of December 31, 2024, 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 clinical trials, product development and process development expenses. 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 years ended December 31, 2024 and 2023 was approximately $ 11.1 million and $ 10.3 million, respectively, recorded within sales and marketing in the Company’s Consolidated Statements of Operations. Share-based Compensation : The Company grants equity awards to recipients through its 2017 Equity Incentive Plan, as amended (the “2017 Plan”), which was approved by stockholders and the Board of Directors. Under the 2017 Plan, the Board of Directors may grant restricted stock or stock options to employees and non-employees. The accounting treatment for share-based payments to employees and non-employees is substantially equivalent. The Company accounts for all share-based compensation costs under the fair value method. The fair value of the Company’s stock options is estimated at the date of grant using the Black-Scholes option valuation model. For the expected term, the Company uses SEC Staff Accounting Bulletin No. 107 simplified method for “plain vanilla” options with following characteristics: (i) the share options are granted 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, the employee would forfeit the share options; (iv) if an employee terminates service after vesting, the employee would have 30 to 90 days to exercise the share options; and (v) the share options are nontransferable and non-hedgeable. The volatility assumption is based on the historical volatility of the Company’s common stock with an equivalent remaining expected term. The dividend yield assumption is based on the Company’s history and expectation 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-coupon issues with an equivalent remaining expected term. 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 be complex and consideration needs to be given for how the market condition should be incorporated into the valuation of the award. The Company considers using other valuation techniques, such as Monte Carlo simulations based on a lattice approach, to value awards with market conditions. The fair-value of restricted stock unit awards is determined at the grant date and is based on the market price on the grant date. 59 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements For option grants and restricted stock unit awards without performance conditions, the Company recognizes compensation expense over the requisite vesting period ratably, recognizing expense for each tranche of each grant starting on the grant date. For stock options that have both service and performance conditions, the Company recognizes compensation expense using the graded attribution method. Compensation expense for stock options with performance conditions is recognized only for those awards expected to vest. The Company recognizes forfeitures when they occur. Fair Value Measurement: The Company follows the provisions of the accounting standard which defines fair value, establishes a framework for measuring fair value and enhances fair value measurement disclosure. Fair value measurements are based on a three-tier hierarchy that prioritizes the use of observable inputs and minimizes the use on unobservable inputs. These tiers include: Level 1, defined as observable inputs such as quoted market prices in active markets; Level 2, defined as inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly; and Level 3, defined as unobservable inputs for which little or no market data exists, therefore requiring an entity to develop its own assumptions. The fair value hierarchy gives the highest priority to Level 1 inputs and lowest priority to Level 3 inputs. As of December 31, 2024 and 2023, the Company did not have any Level 2 or Level 3 assets or liabilities. Financial instruments : The estimated fair value of financial instruments has been determined based on the Company’s assessment of available market information and appropriate valuation methodologies. The fair value of the Company’s financial instruments that are included in current assets and current liabilities approximates their carrying value due to their short-term nature. The carrying amounts reported in the balance sheet for finance lease obligations are present values of the obligations, excluding the interest portion. Loss and Gain Contingencies: The Company is periodically involved in routine litigation. As of the date the financial statements are issued, certain unresolved litigation matters may result in a loss or gain, depending on the occurrence or non-occurrence of future events. Management and legal counsel evaluate these matters to assess potential contingent liabilities and contingent gains. Loss Contingencies - The Company continuously reviews pending litigation matters and assesses whether developments require updates to prior disclosures or previously recognized liabilities. If it is probable that a material loss has been incurred and the amount can be reasonably estimated, the Company accrues the estimated liability in its financial statements. If a potential material loss is reasonably possible but not probable, or if it is probable but cannot be reasonably estimated, the Company discloses the nature of the contingency and, if determinable and material, an estimate of the possible loss range. Assessing the likelihood and amount of potential losses requires significant judgment. If actual outcomes exceed management’s estimates, the Company’s financial condition and results of operations could be materially adversely affected. Gain Contingencies - Potential litigation settlement gains are considered gain contingencies and are not recognized in the financial statements until they are realized. A gain is considered realized when the Company receives cash or readily convertible assets. For further information on litigation matters, see Note 16, Commitments and Contingencies — Legal Proceedings . Recent Accounting Standards Adopted by the Company: In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, "Segment Reporting – Improvements to Reportable Segments Disclosures" (ASU 2023-07), which requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items to reconcile to segment profit or loss, and the title and position of the entity's CODM. The amendments in ASU 2023-07 also expand the interim segment disclosure requirements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 for its annual period ended December 31, 2024 and will adopt for its interim periods beginning in fiscal year 2025. The adoption of ASU 2023-07 did not have a material impact on the Company’s results. 60 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements Accounting Standards Recently Issued but Not Yet Adopted by the Company: In October 2023, the FASB issued ASU 2023-06, “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative,” to amend certain disclosure and presentation requirements for a variety of topics within the ASC. These amendments align the requirements in the ASC to the removal of certain disclosure requirements set out in Regulation S-X and Regulation S-K, announced by the SEC. The effective date for each amended topic in the ASC is either the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or on June 30, 2027, if the SEC has not removed the requirements by that date. Early adoption is prohibited. The Company is currently evaluating the impact that the adoption of ASU 2023-06 may have on its consolidated financial statements and disclosures. In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. A public entity should apply the amendments in ASU 2023-09 prospectively to all annual periods beginning after December 15, 2024. Early adoption and retrospective application are permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures. In March 2024, the FASB issued ASU 2024-02, "Codification Improvements." ASU 2024-02 amends the Codification to remove references to various concepts statements and impacts a variety of topics in the Codification. The amendments apply to all reporting entities within the scope of the affected accounting guidance, but in most instances the references removed are extraneous and not required to understand or apply the guidance. ASU 2024-02 is effective for annual periods beginning after December 15, 2024, with early adoption permitted. While the Company is currently evaluating the impact of this standard, it is not expected to have a significant impact on the Company’s financial statements and disclosures. In November 2024, the FASB issued ASU 2024-03, “Income Statement (Topic 220): Reporting Comprehensive Income - Expense Disaggregation Disclosures, Disaggregation of Income Statement Expenses." ASU 2024-03 requires public companies to disclose additional information about certain expense categories, including purchases of inventory, employee compensation, depreciation, amortization, and depletion, in both interim and annual financial statements. The amendments in this ASU will be effective for annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted and is effective on either a prospective basis or retrospective basis. The Company is currently evaluating the impact of this standard. Note 3. Liquidity Evaluation of Ability to Maintain Current Level of Operations In connection with the preparation of these financial statements for the year ended December 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 these financial statements for the year ended December 31, 2024. Management assessed that there were such conditions and events, including a history of recurring operating losses, a history of negative cash flows from operating activities and inflationary pressures. For the year ended December 31, 2024, the Company recorded a net income of approximately $ 8.6 million and the Company’s operating activities provided cash of $ 12.1 million. As of December 31, 2024, the Company had unrestricted cash and cash equivalents of $ 44.5 million which consists of bank deposits and money market funds. Management evaluated these conditions and anticipates that its current unrestricted cash and cash equivalents and cash to be generated from net sales will be sufficient to meet its financial obligations as they become due over at least the next twelve months from the issuance date of these financial statements. The Company may, however, seek additional capital within the next twelve months, both to fund its projected operating plans after the next twelve months and/or to fund the Company’s longer-term strategic objectives. 61 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements Note 4. Income (Loss) Per Share Applicable to Common Stockholders The following table sets forth the computations of income (loss) per share amounts applicable to common stockholders for the years indicated. Year Ended December 31, (In thousands, except per share data) 2024 2023 Numerator: Net income (loss) 8,550 ( 4,938 ) Denominator: Weighted average common shares outstanding for basic earnings per share (1) 75,929 74,985 Plus: incremental shares from assumed exercise of options and assumed vesting of restricted stock (2) 2,196 — Adjusted weighted average common shares outstanding for diluted earnings per share 78,125 74,985 Earnings (Loss) Per Share: Basic net income (loss) per common share $ 0.11 $ ( 0.07 ) Diluted net income (loss) per common share $ 0.11 $ ( 0.07 ) (1) Includes a weighted average of approximately 167,000 and 174,000 nonvested shares of restricted stock for the years ended December 31, 2024 and 2023, respectively, which are participating securities that feature voting and dividend rights. (2) Options and restricted stock outstanding, which are anti-dilutive and therefore not factored into the weighted average common shares amount above, for the years ended December 31, 2024 and 2023 were as follows: Year Ended December 31, (In thousands) 2024 2023 Stock options 4,087 11,622 Restricted stock units — 589 Note 5. Business Segments and Concentrations The Company has the following three reportable segments for the years ended December 31, 2024 and 2023: • Consumer Products segment: 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, 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; and • Analytical Reference Standards and Services segment: offers the supply of phytochemical reference standards and other research and development services. The Company’s reportable segments are significant operating segments that offer differentiated services. This structure reflects the Company’s current operational and financial management and provides the best structure to maximize the Company's objectives and investment strategy, while maintaining financial discipline. The Company's Chief Executive Officer, who is its chief operating decision maker (CODM), reviews financial information for each operating segment to evaluate performance and allocate resources. The Company evaluates performance and allocates resources based on reviewing net sales, gross profit (loss) and operating income (loss) by reportable segment. The Company's CODM does not review assets by segment in his evaluation and therefore assets by segment are not disclosed below. There are no intersegment sales that require elimination. The “Corporate and other” classification includes corporate items not allocated by the Company to each reportable segment. 62 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements The following tables set forth financial information by segment: Year Ended December 31, 2024 Consumer Products segment Ingredients segment Analytical Reference Standards and Services segment Corporate and other Total (In thousands) Net sales $ 76,772 $ 19,814 $ 3,011 $ — $ 99,597 Cost of sales 27,478 7,808 2,725 — 38,011 Gross profit 49,294 12,006 286 — 61,586 Operating expenses: Sales and marketing: Advertising 11,102 — — — 11,102 Marketing 8,346 195 4 — 8,545 Selling 9,285 40 497 — 9,822 Research and development 4,782 1,234 — — 6,016 General and administrative — — — 18,375 18,375 Operating expenses 33,515 1,469 501 18,375 53,860 Operating income (loss) $ 15,779 $ 10,537 $ ( 215 ) $ ( 18,375 ) $ 7,726 Year Ended December 31, 2023 Consumer Products segment Ingredients segment Analytical Reference Standards and Services segment Corporate and other Total (In thousands) Net sales $ 69,528 $ 11,137 $ 2,905 $ — $ 83,570 Cost of sales 24,755 4,980 3,055 — 32,790 Gross profit (loss) 44,773 6,157 ( 150 ) — 50,780 Operating expenses: Sales and marketing: Advertising 10,259 — — — 10,259 Marketing 7,354 — 10 — 7,364 Selling 8,401 52 362 — 8,815 Research and development 4,273 685 — — 4,958 General and administrative — — — 24,983 24,983 Operating expenses 30,287 737 372 24,983 56,379 Operating income (loss) $ 14,486 $ 5,420 $ ( 522 ) $ ( 24,983 ) $ ( 5,599 ) 63 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements Disaggregation of revenue The Company disaggregates its revenue from contracts with customers by type of goods or services for each of its segments, as the Company believes it best depicts how the nature, amount, timing and uncertainty of its revenue and cash flows are affected by economic factors. Disaggregated revenues are as follows: Year Ended December 31, 2024 Consumer Products Segment Ingredients Segment Analytical Reference Standards and Services Segment Total (In thousands) Tru Niagen®, Consumer Product $ 76,772 $ — $ — $ 76,772 Food-grade Niagen® — 17,540 — 17,540 Pharmaceutical-grade Niagen® — 1,700 — 1,700 Subtotal Niagen® Related 76,772 19,240 — 96,012 Other Ingredients — 574 — 574 Reference Standards — — 2,891 2,891 Consulting and Other — — 120 120 Subtotal Other Goods and Services — 574 3,011 3,585 Total Net Sales $ 76,772 $ 19,814 $ 3,011 $ 99,597 Year Ended December 31, 2023 Consumer Products Segment Ingredients Segment Analytical Reference Standards and Services Segment Total (In thousands) Tru Niagen®, Consumer Product $ 69,528 $ — $ — $ 69,528 Food-grade Niagen® — 10,550 — 10,550 Pharmaceutical-grade Niagen® — — — — Subtotal Niagen® Related 69,528 10,550 — 80,078 Other Ingredients — 587 — 587 Reference Standards — — 2,804 2,804 Consulting and Other — — 101 101 Subtotal Other Goods and Services — 587 2,905 3,492 Total Net Sales $ 69,528 $ 11,137 $ 2,905 $ 83,570 Geographical Concentrations Net sales from international sources The Company's net sales are predominantly generated in the United States, however, international sources collectively represent more than 10% of both total net sales and net sales for each business segment. These international sources span across Europe, North America, South America, Asia, and Oceania. Net sales from international sources detailed by each business segment are as follows: Year Ended December 31, (In millions) 2024 2023 Consumer Products Segment $ 19.8 $ 21.3 Ingredients Segment 3.6 $ 2.7 Analytical Reference Standards and Services Segment 0.9 $ 1.0 Total net sales from international sources $ 24.3 $ 25.0 64 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements Long-lived assets The Company’s long-lived assets are located within the United States. Concentrations of Major Customers and Vendors Disclosure of major customers Major customers are defined as customers whose sales or accounts receivables individually consist of more than 10% of total sales or total trade receivables, respectively. Percentage of revenues from major customers of the Company’s consumer products segment for the years indicated were as follows: Year Ended December 31, Major Customers 2024 2023 A.S. Watson Group (1) 12.5 % 15.4 % Life Extension 11.7 % * * Represents less than 10% (1) Customer was classified as a related party for part of the year. See Note 6, Related Party Transactions for further details. The percentage of the amounts due from major customers to total accounts receivable, net as of the periods indicated were as follows: As of December 31, Major Customers 2024 2023 A.S. Watson Group (1) 47.6 % 52.7 % Life Extension * 16.1 % Amazon Marketplaces 14.3 % 12.2 % Wells Pharma of Houston 10.3 % * * Represents less than 10% (1) Customer was classified as a related party for part of the year. See Note 6, Related Party Transactions for further details. During the year ended December 31, 2023, the Company recorded an allowance for credit loss of approximately $ 964,000 . The higher provision was primarily a result of the Chapter 11 bankruptcy filing by iMedia Brands, Inc., which owns ShopHQ, a multiplatform interactive television network, which has been a sales channel for Tru Niagen®. As of December 31, 2023, the Company determined the balance to be uncollectible and wrote off the full provision. For the year ended December 31, 2024, the Company recorded a recovery of credit losses of approximately $ 1.3 million, associated with a settlement in connection with litigation. See Note 16, Commitments and Contingencies — Legal Proceedings, 1. Elysium Health, LLC, (A) California Action for further information. As of December 31, 2024, concentration for the Company's outstanding trade receivables is significant, with approximately 72 % of the total outstanding trade receivables aggregated among three 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. The Company has determined that the current concentration is primarily due to the timing of purchases, and the Company does not consider the concentration of its trade receivables to be a significant risk. Nevertheless, to ensure prudence and safeguard against potential challenges arising from this concentration, the Company remains vigilant in monitoring the creditworthiness and payment behavior of these major customers. Furthermore, the Company continues to pursue new partnerships and business opportunities which helps to diversify its customer base and minimize the risk of an overreliance on any particular trade receivable. Despite the Company’s risk mitigation efforts, there is no assurance that the Company will not experience delays or defaults in payment from its customers, which could result in an increase in the Company's bad debt expense, a reduction in cash flows, and a negative impact on its financial performance. 65 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements Disclosure of major vendor The Company’s major vendor who accounted for more than 10% of the Company’s total accounts payable is as follows: Major Vendor As of December 31, 2024 2023 Vendor A 47.2 % 64.3 % Additionally, the Company has an exclusive manufacturer for the supply of food-grade NRC, W.R. Grace & Co. -Conn. (Grace). Effective January 1, 2025, the Company entered into a Tenth Amendment to the Manufacturing and Supply Agreement (the "Grace Manufacturing Agreement"), initially effective in January 2016. In January 2019, Grace was issued patents related to the crystalline form of NR chloride which limit the Company’s ability to find alternatives for supply (Grace Patents). Pursuant to the Tenth Amendment and the manufacturing and supply agreement with the aforementioned third party, the Company is committed to purchase approximately $ 4.8 million of total inventory between January 1, 2025 and March 31, 2025. The Grace Manufacturing Agreement is set to expire on March 31, 2025, subject to further renewal of the Agreement to be negotiated by the parties. Additionally, under the Tenth Amendment, the Company and Grace maintain a binding six-month rolling forecast, which is updated monthly. As of December 31, 2024, this forecast obligates the Company to purchase approximately $ 11.2 million of total inventory between January 1, 2025 and June 30, 2025. Any failure to extend the Grace Manufacturing Agreement on satisfactory terms could potentially have a material adverse impact on the Company’s financial results and strategic position, as outlined in Item 1A. Risk Factors of this Annual Report on Form 10-K, "We rely on a single supplier, W.R. Grace, for NRC and a limited number of third-party suppliers for the raw materials required to produce our products." Note 6. Related Party Transactions Prior to August 20, 2024, A.S. Watson Group was considered a related party due to common ownership by an entity that beneficially owned more than 10% of the Company’s common stock. On August 20, 2024, this entity sold its ownership in the Company, and A.S. Watson Group ceased to be a related party as of that date. The sale of consumer products and corresponding trade receivables to related parties during and as of the periods indicated are as follows: Net Sales Trade Receivable as of Year Ended December 31, December 31, 2024 2023 2024 2023 A.S. Watson Group (1) $ 8.7 million $ 12.8 million $— million $ 2.8 million (1) Due to the change in ownership of A.S. Watson Group in 2024, sales and related trade receivables after August 20, 2024, are excluded from the amounts presented above. However, the Company has maintained its relationship with A.S. Watson Group. Note 7. Inventories The Company's major classes of inventory and corresponding balances as of the periods indicated are as follows: As of December 31, (In thousands) 2024 2023 Consumer Products - Finished goods $ 5,811 $ 5,962 Consumer Products - Work-in-process 2,130 3,537 Bulk ingredients 757 4,478 Reference standards 494 548 Inventories $ 9,192 $ 14,525 66 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements Note 8. Intangible Assets, Net Intangible assets as of the periods indicated consisted of the following: As of December 31, (In thousands, except years) Weighted Average Life (Years) 2024 2023 Healthspan Research LLC Acquisition 10 $ 1,346 $ 1,346 License agreements and other 9 1,013 1,013 Less: Accumulated amortization ( 2,000 ) ( 1,849 ) Intangible assets, net $ 359 $ 510 During the years ended December 31, 2024 and 2023, amortization expense was approximately $ 151,000 and $ 158,000 , respectively. During the year ended December 31, 2023, the Company identified intangible assets which were impaired due to the cessation of use of certain intellectual properties, resulting in an impairment charge of $ 3,000 and the removal of the intangible balances from the gross asset and accumulated amortization amounts approximating $ 630,000 and $ 627,000 , respectively. Estimated amortization expense for each of the years ended December 31 is as follows: (In thousands) Year Amount 2025 $ 151 2026 151 2027 42 2028 12 2029 2 Thereafter 1 $ 359 Note 9. Leasehold Improvements and Equipment, Net Leasehold improvements and equipment as of the periods indicated consisted of the following: As of December 31, (In thousands) 2024 2023 Laboratory equipment $ 3,076 $ 3,272 Leasehold improvements 2,209 2,148 Computer equipment 574 665 Implementation costs - cloud computing arrangements 1,218 1,135 Furniture and fixtures 320 322 Construction in progress 86 5 7,483 7,547 Less: Accumulated depreciation ( 5,764 ) ( 5,410 ) Leasehold improvements and equipment, net $ 1,719 $ 2,137 Depreciation expense on leasehold improvements and equipment for the years ended December 31, 2024 and 2023 was approximately $ 663,000 and $ 870,000 , respectively. Depreciation is computed using the straight-line method over the estimated useful lives of the depreciable assets (ranging from three to ten years ). Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the remaining lease term. 67 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements During the years ended December 31, 2024 and 2023, the Company sold or disposed of certain leasehold improvements and equipment resulting in a gain of $ 19,000 and $ 5,000 , respectively. At the time of sale or disposal, the related cost and accumulated depreciation were removed from the respective accounts. Note 10. Leases Operating Leases The Company leases office space facilities and a research and development laboratory under non-cancelable operating leases with varying expirations extending through fiscal year 2029. The lease agreements provide for renewal options and rent escalation over the lease term as well as require the Company to pay maintenance, insurance and property taxes. On October 11, 2023, the Company amended its existing office space lease in Los Angeles, California. In accordance with Accounting Standards Codification (ASC) 842, the amended lease agreement is considered modified and subject to lease modification guidance. The right-of-use (ROU) asset and lease liability related to the lease agreement were remeasured based on the change in the lease conditions, which included rent abatement totaling approximately $ 355,000 . The reassessed value of the ROU asset and lease liability as of the modification date was $ 1.0 million and $ 1.2 million, respectively. The lease term remained unchanged and extends through March 31, 2027 and provides one option to extend for an additional five years . As of December 31, 2024 and 2023, the Company had ROU assets of $ 1.7 million and $ 2.4 million, respectively, and corresponding operating lease liabilities of $ 2.6 million and $ 3.3 million, respectively. The components of operating lease expense for the years indicated are as follows: Year Ended December 31, (In thousands) 2024 2023 Operating leases Operating lease expense $ 886 $ 905 Variable lease expense (1) 411 293 Operating lease expense 1,297 1,198 Short-term lease rent expense 17 16 Total expense $ 1,314 $ 1,214 1) Variable lease costs, including property taxes and insurance and common area maintenance fees, are classified in cost of services in the Company's Consolidated Statements of Operations. As of December 31, 2024, the weighted average remaining lease term for operating leases is 3.3 years and the weighted average discount rate used to determine the operating lease liabilities is 7.1 %. Future minimum lease payments under operating leases as of December 31, 2024 are as follows: (In thousands) Year Amount 2025 $ 1,135 2026 901 2027 491 2028 357 2029 30 Thereafter — Total 2,914 Less: Present value discount ( 275 ) Present value of total operating lease liabilities 2,639 Less: Current portion ( 982 ) Long-term obligations under operating leases $ 1,657 68 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements Note 11. Share-Based Compensation Equity Plans The Company grants awards to recipients through the 2017 Equity Incentive Plan, as amended (the “2017 Plan”), which was approved by stockholders and the Board of Directors. In June 2023, stockholders approved an amendment to the Company’s 2017 Equity Incentive Plan to increase the number of shares available for issuance by 3.65 million shares of common stock. Pursuant to the latest amendment, the 2017 Plan provides for the issuance of shares that total no more than the sum of (i) 18,150,000 new shares, (ii) any returning shares such as forfeited, cancelled, or expired shares granted under either the 2017 Plan or the Second Amended and Restated 2007 Equity Incentive Plan and (iii) 500,000 shares pursuant to an inducement award. 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 December 31, 2024, there were approximately 4.7 million remaining shares available for issuance under this plan. Options expire 10 years from the date of grant. General Vesting Conditions The Company’s stock options and restricted stock unit awards are generally subject to a one-year cliff vesting period after which 1/3rd of the shares vest with the remaining shares vesting ratably each month over a two-year period subject to the passage of time. Beginning in the second quarter of 2022, newly granted restricted stock units are generally subject to a three-year vesting period with 1/3rd vesting per year on the anniversary of the grant date. Certain stock option awards are market or performance based and vest based on certain triggering events established by the Compensation Committee. Certain executive and board member equity awards provide for accelerated vesting if there is a change in control or termination without cause. Stock Options The fair value of the Company’s stock options that are not market or performance based was estimated at the date of grant using the Black-Scholes based option valuation model. The table below outlines the weighted average assumptions for options granted during the years indicated: Year Ended December 31, Weighted Average: 2024 2023 Expected term (years) 6.4 6.2 Volatility 74.4 % 75.4 % Risk-free rate 4.3 % 3.6 % Dividend Yield 0 % 0 % 69 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements Service Period Based Stock Options The majority of options granted by the Company are comprised of service based options. These options vest ratably over the requisite service period of the award. The following table summarizes activity of service period-based stock options during the years indicated: (In thousands except per-share data and remaining contractual term) Number of Options Weighted Average Aggregate Intrinsic Value Exercise Price Remaining Contractual Term (Years) Outstanding at December 31, 2022 9,397 $ 4.21 6.2 $ 44 Options Granted 2,764 1.78 Options Exercised — — — Options Forfeited / Expired ( 1,580 ) 3.84 Outstanding at December 31, 2023 10,581 $ 3.63 5.9 $ 4 Options Granted 3,425 1.83 Options Exercised ( 2,053 ) 2.65 4,326 Options Forfeited / Expired ( 2,576 ) 3.70 Outstanding at December 31, 2024 9,377 $ 3.17 6.1 $ 22,988 * Exercisable at December 31, 2024 5,873 $ 3.93 4.4 $ 10,959 * *The aggregate intrinsic values in the table above are based on the Company’s stock price of $ 5.31 , which is the closing price of the Company’s stock on the last day of business for the year ended December 31, 2024 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 by the Compensation Committee. The related performance criteria has passed for these performance based stock options and no further stock options are pending performance determinations. For performance criteria met, the applicable stock options vested and expense was recognized. For performance criteria not met, the compensation expense was not recognized and the applicable stock options were forfeited. The following table summarizes activity of performance based stock options during the years indicated: (In thousands except per-share data and remaining contractual term) Number of Shares Weighted Average Aggregate Intrinsic Value Exercise Price Remaining Contractual Term (Years) Outstanding at December 31, 2022 41 $ 4.34 1.1 $ — Options Granted — — Options Exercised — — — Options Forfeited — — Outstanding at December 31, 2023 41 $ 4.34 0.1 $ — Options Granted — — Options Exercised — — — Options Forfeited ( 41 ) 4.34 Outstanding and Exercisable at December 31, 2024 — $ — — $ — 70 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements Market Based Stock Options The Company grants stock option awards that are market based which have vesting conditions associated with a service condition as well as performance of the Company’s stock price. The following table summarizes activity of market based stock options during the years indicated: (In thousands except per-share data and remaining contractual term) Number of Shares Weighted Average Aggregate Intrinsic Value Exercise Price Remaining Contractual Term (Years) Outstanding at December 31, 2022 1,000 $ 4.24 4.8 $ — Options Granted — — Options Exercised — — — Options Forfeited — — Outstanding at December 31, 2023 1,000 $ 4.24 3.8 $ — Options Granted — — Options Exercised — — — Options Forfeited — — Outstanding and Exercisable at December 31, 2024 1,000 $ 4.24 2.8 $ 1,070 * *The aggregate intrinsic values in the table above are based on the Company’s stock price of $ 5.31 , which is the closing price of the Company’s stock on the last day of business for the year ended December 31, 2024 . Restricted Stock Units The following table summarizes activity of restricted stock units during the years indicated: (In thousands except per share fair value) Number of Units Weighted Average Fair Value Unvested shares at December 31, 2022 650 $ 2.77 Granted 429 1.82 Vested ( 398 ) 2.86 Forfeited ( 92 ) 2.36 Unvested shares at December 31, 2023 589 $ 2.08 Granted 479 1.52 Vested ( 271 ) 2.34 Forfeited ( 188 ) 1.70 Unvested shares at December 31, 2024 609 $ 1.64 Expected to vest as of December 31, 2024 609 $ 1.64 71 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements Restricted Stock Awards The following table summarizes activity of restricted stock awards during the years indicated: (In thousands except per share fair value) Number of Awards Weighted Average Fair Value Unvested shares at December 31, 2022 183 $ 3.25 Granted — — Vested ( 16 ) 4 Forfeited — — Unvested shares at December 31, 2023 167 $ 3.15 Granted — — Vested — — Forfeited — — Unvested shares at December 31, 2024 167 $ 3.15 Expected to vest as of December 31, 2024 167 $ 3.15 Share-based Compensation Share-based compensation expenses for the years ended December 31, 2024 and December 31, 2023 were as follows: Year Ended December 31, (In thousands) 2024 2023 Share-based compensation expense Cost of sales $ 319 $ 330 Sales and marketing 745 1,075 Research and development 718 993 General and administrative 1,874 2,353 Total $ 3,656 $ 4,751 In future periods, the Company expects to recognize approximately $ 3.6 million and $ 0.7 million in share-based compensation expense for unvested options and unvested restricted stock units, respectively, that were outstanding as of December 31, 2024. Future share-based compensation expense will be recognized over 1.9 and 1.7 weighted average years for unvested options and restricted stock units, respectively. 72 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements Note 12. NHSc Revenue On October 10, 2022, the Company and Société des Produits Nestlé SA, a société anonyme organized under the laws of Switzerland (NHSc), as successor-in-interest to NESTEC Ltd., entered into an amended and restated supply agreement (the “Supply Agreement”), which amends and restates the supply agreement, dated December 19, 2018, entered into by the Company and NESTEC Ltd. Pursuant to the Supply Agreement, NHSc and its affiliates will exclusively purchase nicotinamide riboside chloride (NRCL) from the Company and NHSc and its affiliates will have the non-exclusive right to manufacture, market, distribute, and sell products using NRCL for human use in the (i) medical nutritional, (ii) functional food and beverage and (iii) multi-ingredient dietary supplements categories sold under one of the NHSc brands (the “Approved Products”) world-wide, but excluding certain countries and ingredient combinations. The term of the Supply Agreement is five years , unless earlier terminated, and is subject to automatic extensions provided certain minimum purchases by NHSc are met. In exchange for the rights granted in the Supply Agreement, NHSc committed to an initial purchase of NRCL totaling approximately $ 2.0 million. NHSc fulfilled this commitment during the fourth quarter of 2022 , with $ 1.7 million involving a bill-and-hold arrangement. The Supply Agreement also provides for NHSc to pay a royalty to the Company at tiered percentage rates in the low-single digits based on worldwide annual net sales of the Approved Products, subject to certain deductions. Furthermore, the Supply Agreement provides for NHSc to pay the Company two separate one-time milestone payments in the low seven figures depending on whether NHSc achieves certain net sales targets in any contract year. During the years ended December 31, 2024 and December 31, 2023, no royalty or milestone payments were earned. Under the Supply Agreement, the Company will continue to recognize the deferred revenue balance received in connection with the original Nestec Ltd. agreement utilizing the output method. The Company initially recorded $ 5.0 million in deferred revenue under the original agreement, which was received in connection with an upfront payment and a product launch fee. Deferred revenue will be recognized by the Company based on the percentage of NRCL kilograms delivered to-date compared to the total forecasted NRCL kilograms to be delivered for the duration of the contract term including renewal options as estimated by the Company. Revenue recognized from deferred revenue and the corresponding deferred revenue balance for the years indicated is as follows: (In thousands) Year Ended December 31, At December 31, 2024 2023 2024 2023 Revenue recognized from deferred revenue $ 732 $ 644 Deferred revenue balance $ 2,579 $ 3,311 Note 13. Income Taxes The provision for income taxes for the years ended December 31, 2024 and 2023 is summarized as follows: Year Ended December 31, (In thousands) 2024 2023 Current: Federal $ — $ — State 305 — $ 305 $ — Deferred: Federal — — State — — $ — $ — Total $ 305 $ — 73 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements A reconciliation of income taxes computed at the statutory federal income tax rate to income taxes as reflected in the financial statements is summarized as follows: Year Ended December 31, 2024 2023 Federal income tax expense at statutory rate ( 21.0 ) % ( 21.0 ) % State income tax, net of federal benefit ( 5.2 ) ( 5.5 ) Permanent differences 2.3 10.8 Change in state tax rate ( 1.3 ) ( 0.3 ) Changes of state net operating losses — 0.3 Change in stock options and restricted stock — 12.7 Change in valuation allowance 23.9 2.7 Federal to state differences ( 1.7 ) — Other ( 0.5 ) 0.3 Effective tax rate ( 3.5 ) % 0.0 % The Company's deferred tax assets and liabilities for the years indicated are summarized below: December 31, (In thousands) 2024 2023 Deferred tax assets: Net operating loss carryforward $ 35,224 $ 36,735 Stock options and restricted stock 3,849 4,484 Inventory reserve 185 343 Allowance for doubtful accounts 25 18 Accrued expenses 1,746 2,194 Research and development expense 2,507 1,666 Deferred revenue 676 878 Leasehold improvements and equipment 124 99 Intangibles 102 105 Operating leases 238 227 44,676 46,749 Less: Valuation allowance ( 44,290 ) ( 46,391 ) Total deferred tax assets 386 358 Deferred tax liabilities: Prepaid expenses ( 386 ) ( 358 ) Total deferred tax liabilities ( 386 ) ( 358 ) Net deferred tax assets (liabilities) $ — $ — For the year ended December 31, 2024, the Company’s effective tax rate was 3.5 %. The Company reduced its valuation allowance by approximately $ 2.1 million, to $ 44.3 million as of December 31, 2024 from $ 46.4 million as of December 31, 2023. For the year ended December 31, 2023, the Company maintained a full valuation allowance against the entire deferred income tax balance which resulted in an effective tax rate of 0 %. For the years ended December 31, 2024 and 2023, the Company identified $ 36,750 and $ 106,000 , respectively, in U.S. taxable income on global intangible low-taxed income (GILTI). 74 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements As of December 31, 2024, the Company’s net operating loss (NOL) carryforwards for federal and state income tax purposes are approximately $ 133.3 million and $ 107.9 million, respectively, portions of which were reduced in the year ended December 31, 2024 for both federal and state. During the year ended December 31, 2024, $ 7.6 million of federal NOL carryforwards and $ 1.7 million of state NOL carryforwards were reduced against taxable income. The Company’s federal NOL carryforward of $ 103.6 million generated in tax years beginning after December 31, 2017 may be carried forward indefinitely but the deductibility of such NOL carryforwards in taxable years beginning after December 31, 2017, is limited to 80% of taxable income. Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”), generally imposes an annual limitation on the amount of NOL carryforwards and associated built-in losses that may be used to offset taxable income when a corporation has undergone certain changes in stock ownership. The Company’s ability to utilize NOL carryforwards and built-in losses may be limited, under this section or otherwise, by the Company’s issuance of common stock or by other changes in stock ownership. The Company has not performed an analysis of IRC Section 382 recently due to net operating losses, dating back to 2004. The Company will continue to analyze the potential impact of any additional transactions undertaken upon the utilization of the net operating losses on a go forward basis. To the extent the Company’s use of NOL carryforwards and associated built-in losses is significantly limited in the future due to additional changes in stock ownership, the Company’s income could be subject to U.S. corporate income tax earlier than it would if the Company were able to use NOL carryforwards and built-in losses without such annual limitation, which could result in lower profits and the loss of the majority of the benefits from these attributes. 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 examination was completed in the third quarter of 2024, with no changes recommended. The Company is currently not under examination by the Internal Revenue Service or any other major income tax jurisdiction. The Company has not identified any material uncertain tax positions requiring a reserve as of December 31, 2024 and December 31, 2023. Note 14. Line of Credit and Other Available Sources of Financing Line of Credit On November 12, 2019, the Company entered into a business financing agreement with Western Alliance Bank (Credit Agreement), to establish a formula based revolving credit line. On December 8, 2023, the Company entered into a fifth amendment to the Credit Agreement. Pursuant to such amendment, the Credit Agreement provides for a revolving credit line of up to $ 10.0 million subject to the terms and conditions of the agreement, as amended, and extended the maturity date to November 12, 2025. The amendment also modified the interest rate to be calculated at a floating rate per month equal to (a) the greater of (i) 8.25 % per year (previously 3.25 % per year) or (ii) the Prime Rate published by The Wall Street Journal, or such other rate of interest publicly announced by the Lender as its Prime Rate , plus (b) 1.00 % (previously 1.50 %), plus an additional 5.00 % during any period that an event of default has occurred and is continuing. In addition, the amendment modified certain financial covenants, including (a) the amount of the Borrowers’ cash maintained at Lender (b) revising how quick ratio is calculated for purposes of the quick ratio covenant, and (c) Borrowers’ minimum liquidity requirements. On November 18, 2024, the Company entered into a sixth amendment to the Credit Agreement. The amendment revised a letter of credit sublimit, under which the lender may issue letters of credit on behalf of the Company up to a maximum of $ 3.0 million. The issuance or renewal fee for letters of credit is 2.00 % per annum of the face amount, with additional fees applicable for amendments, transfers, and cancellations. The amendment further provided that any letter of credit obligations will be treated as advances for purposes of determining availability under the credit limit. On November 21, 2024, a letter of credit for approximately $ 2.1 million was issued on behalf of the Company. See Note 16, Commitments and Contingencies - Royalties for further information. As of December 31, 2024, the Company had no outstanding debt under this line of credit arrangement. If the Company draws from the line of credit, the Company’s obligations under the Credit Agreement are secured by a security interest in substantially all of the Company’s current and future personal property assets, including intellectual property. Any borrowings, interest or other fees or obligations that the Company owes will become due and payable on the maturity date. The Credit Agreement includes quick ratio financial covenants. If the Company draws from the line of credit, the Company is also subject to a number of affirmative and restrictive covenants, including covenants regarding delivery of financial statements, the amount of the Company’s cash maintained at Western Alliance Bank, maintenance of inventory, payment of taxes, maintenance of insurance, dispositions of property, business combinations or acquisitions and incurrence of additional indebtedness, among other customary covenants. As the Company had no borrowings under the line of credit as of December 31, 2024, the Company was in compliance with the covenants of this agreement. 75 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements Debt Issuance Costs For the years ended December 31, 2024 and 2023, the Company incurred debt issuance costs of approximately $ 52,000 and $ 75,000 , respectively, in connection with this line of credit arrangement and had an unamortized balance of approximately $ 39,000 and $ 68,000 as of December 31, 2024 and 2023, respectively. For the line of credit arrangement, the Company elected a policy to keep the debt issuance costs as an asset, regardless of whether an amount is drawn. The remaining unamortized deferred asset will be amortized over the remaining life of the line of credit arrangement. Other Available Sources of Financing In June 2023, the Company filed a new $ 125 million registration statement on Form S-3 with the SEC, utilizing a “shelf” registration process. Under this shelf registration process, the Company may sell securities from time to time, including up to $ 47.8 million pursuant to the At Market Issuance Sales Agreement, dated as of June 12, 2020, with B. Riley FBR, Inc. and Raymond James & Associates, Inc. (ATM Facility). On November 20, 2024, the Company entered into an amendment (the “Amendment”) to the ATM Facility in order to (i) revise the list of sales agents under the program to include Roth Capital Partners, LLC, (ii) remove B. Riley Securities, Inc. (formerly B. Riley FBR, Inc.) as sales agent, (iii) update the provisions regarding notice accordingly, and (iv) make other conforming changes. As a result of the Amendment, Raymond James & Associates, Inc. and Roth Capital Partners , LLC will continue as the sales agents. As of December 31, 2024, approximately $ 47.8 million remains available under the ATM Facility. The Company’s potential use of the ATM facility is subject to the satisfaction of various conditions in the ATM Facility agreement as well as market conditions. As a result, the Company’s ability to rely on the ATM Facility to raise liquidity is limited. Note 15. Joint Venture On September 30, 2022, Asia Pacific Scientific, Inc., an indirect wholly owned subsidiary of the Company, and Hong Kong (China) Taikuk Group Ltd (Taikuk) entered into a shareholders agreement (the “Shareholders Agreement”) pursuant to which Taikuk had agreed to contribute $ 1.0 million (the “Subscription Price”) in exchange for an 11 % non-voting equity interest in ChromaDex Asia Pacific Ventures Limited, a subsidiary of Asia Pacific Scientific, Inc. (the “Joint Venture” or “JV”). Additionally, the Company was to pay $ 1.0 million in cash to Taikuk (the “Taikuk Fee”) upon the closing of the Shareholders Agreement (the “Closing”). The Company and Taikuk had mutually agreed that no exchange of funds for the Taikuk Fee and Subscription Price was necessary and, accordingly, no cash has or will exchange hands related to these provisions of the Shareholders Agreement. The articles of association of the JV were amended and restated simultaneously with the Closing. The purpose of the JV was to commercialize Tru Niagen® and other products containing nicotinamide riboside to be developed by the Company in the ordinary course (the “Products”) in Mainland China and its territories, excluding Hong Kong, Macau and Taiwan (the “Territory”). The Shareholders Agreement has an initial term of 20 years, unless earlier terminated. Under the Shareholders Agreement, the Company indirectly owned an 89 % equity interest (and all of the voting interests) in the JV and had the right to elect all three directors of the JV. Prior to being able to commercialize the Products in the Territory, the JV was to obtain all applicable regulatory approvals, including “Blue Hat” or health food registration with the Peoples Republic of China State Administration for Market Regulation for Products in the name of the Company or its designee (collectively, the “Blue Hat Registration”). Upon completion of Blue Hat Registration, the Company would make a payment of $ 1.0 million in cash to Taikuk (the “Blue Hat Registration Fee”). If the Blue Hat Registration was not obtained within 24 months of the Closing (which could have been extended by an additional 12 months upon mutual consent of the parties), the JV had an option to repurchase the 11 % non-voting interest purchased by Taikuk for $ 1 (the “Right of Repurchase”). The Right of Repurchase functions as a performance vesting condition under ASC 718 and the 11 % non-voting equity interest is accounted for as nonemployee share-based compensation. The equity interest would have only vested if Blue Hat Registration was achieved, at which time the minority interest would have been recorded. On September 27, 2024, the Company sent a notification of non-extension to Taikuk providing that the Registration Period was due to expire on October 1, 2024 and that the Company did not elect to extend the Registration Period. As a result, Blue Hat Registration under the JV is no longer possible, and no amounts related to the Blue Hat Registration Fee or the 11 % non-voting interest have been or will be recognized. On December 16, 2024, the Company exercised its Right of Repurchase and bought back the 11 % non-voting interest from Taikuk for $ 1 , effectively terminating the Shareholders Agreement and joint venture. As of December 31, 2024, ChromaDex Asia Pacific Ventures Limited is a wholly owned subsidiary. 76 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements Note 16. Commitments and Contingencies Purchase obligations The Company uses contract manufacturers to provide manufacturing services for its products. During the normal course of business, in order to manage manufacturing lead times and help ensure adequate supply, the Company enters into agreements with its contract manufacturers that either allow them to procure inventory based on criteria as defined by the Company or that establish the parameters defining the Company’s requirements. A portion of the Company’s purchase commitments arising from these agreements consist of firm, non-cancelable and unconditional purchase commitments. In certain instances, these agreements allow the Company the option to cancel, reschedule or adjust the Company’s requirements based on its business needs prior to firm orders being placed. Future minimum payments under inventory purchase obligations as of December 31, 2024 are as follows: (In thousands) Year Amount 2025 $ 11,163 $ 11,163 Royalties The Company has various licensing agreements with leading research universities and other patent holders, pursuant to which the Company acquired patents related to certain products the Company offers to its customers. These agreements afford for royalty payments based on contractual minimums and expire at various dates ranging from 2025 through 2037, often correlated to the expiration date of each patent. In addition, the Company is required to pay a range of 1 % to 5 % of sales related to the licensed products under these agreements. On November 27, 2024, ChromaDex entered into a Supplemental Agreement (the “Supplemental Agreement”) with the Trustees of Dartmouth College (“Dartmouth,” and together with ChromaDex, the “Parties”). The Supplemental Agreement supplements the exclusive license agreements entered into between the Parties dated July 13, 2012 (as amended and restated as of March 13, 2017 and December 29, 2020, the “2012 Agreement”) and May 16, 2014 (together with the 2012 Agreement, the “Exclusive License Agreements”) pursuant to which ChromaDex received an exclusive license under Dartmouth-owned U.S. patents (the “Dartmouth Patents”). Under the Supplemental Agreement, Dartmouth agreed, subject to certain conditions specified in the Supplemental Agreement and the fulfillment of ChromaDex’s obligations under the Agreement, (i) to waive certain accrued but unpaid royalties, license fees, and maintenance expenses owed by ChromaDex under the Exclusive License Agreements, which totaled an aggregate of $ 3.5 million, and (ii) that no additional royalties, license fees, maintenance or other expenses or other payments will be assessed by Dartmouth or payable by the Company to Dartmouth for the Dartmouth Patents after the effective date of the Agreement. The waiver was contingent upon ChromaDex securing a bond (the “Appeal Bond”) for the amount of the fee judgement, if any, related to the Delaware patent infringement case against Elysium Health, Inc. filed by the Company and Dartmouth relating to the Dartmouth Patents. On November 21, 2024, the Appeal Bond was secured through a letter of credit issued on behalf of the Company, which was supported by the Company's line of credit. See Note 14, Line of Credit and Other Available Sources of Financing for more information regarding the letter of credit issuance and its connection to the line of credit. As a result, for the year ended December 31, 2024, the Company reversed $ 3.5 million of previously accrued royalties, license fees, and maintenance expenses under accrued expenses in its Consolidated Balance Sheets and recorded a reduction in royalty expense, license fees, and maintenance expenses in general and administrative expenses in its Consolidated Statements of Operations. For information regarding the Delaware patent infringement case against Elysium Health, Inc. see Legal Proceedings below. Excluding the reversed royalties, total royalty expense including license maintenance fees for the years ended December 31, 2024 and 2023 was approximately $ 1.2 million and $ 2.1 million, respectively. 77 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements As of December 31, 2024, future minimum royalties including license maintenance fees for the next five years are as follows: (In thousands) Year Amount 2025 $ 202 2026 197 2027 176 2028 124 2029 94 $ 793 L egal proceedings 1. Elysium Health, LLC (A) California Action On December 29, 2016, ChromaDex filed a complaint in the United States District Court for the Central District of California, naming Elysium Health, Inc. (together with Elysium Health, LLC, “Elysium”) as defendant (Complaint). On January 25, 2017, Elysium filed an answer and counterclaims in response to the Complaint (together with the Complaint, the “California Action”). Over the course of the California Action, the parties have each filed amended pleadings several times and have each engaged in several rounds of motions to dismiss and one round of motion for judgment on the pleadings with respect to various claims. Most recently, on November 27, 2018, ChromaDex filed a fifth amended complaint that added an individual, Mark Morris, as a defendant. Elysium and Morris (Defendants) moved to dismiss on December 21, 2018. The court denied Defendants’ motion on February 4, 2019. Defendants filed their answer to ChromaDex’s fifth amended complaint on February 19, 2019. ChromaDex filed an answer to Elysium’s restated counterclaims on March 5, 2019. Discovery closed on August 9, 2019. On August 16, 2019, the parties filed motions for partial summary judgment as to certain claims and counterclaims. On January 16, 2020, the court granted both parties’ motions for summary judgment in part and denied both in part. Following the court’s January 16, 2020 order, ChromaDex’s claims asserted in the California Action, among other allegations, were that (i) Elysium breached the Supply Agreement, dated June 26, 2014, by and between ChromaDex and Elysium (pTeroPure® Supply Agreement), (ii) Elysium breached the Supply Agreement, dated February 3, 2014, by and between ChromaDex and Elysium, as amended (“Niagen® Supply Agreement”), (iii) Defendants misappropriated ChromaDex trade secrets, (iv) Morris breached two confidentiality agreements, (v) Morris breached his fiduciary duty to ChromaDex, and (vi) Elysium aided and abetted Morris’s breach of fiduciary duty. ChromaDex sought damages, interest, and other relief. Elysium’s claims alleged in the California Action were that (i) ChromaDex breached the Niagen® Supply Agreement, (ii) ChromaDex fraudulently induced Elysium into entering into the Trademark License and Royalty Agreement, dated February 3, 2014, by and between ChromaDex and Elysium (the “License Agreement”), (iv) ChromaDex misused its patent rights, and (v) ChromaDex was unjustly enriched by the royalties Elysium paid pursuant to the License Agreement. Elysium sought damages, restitution, a declaratory judgment, and other relief. On November 18, 2020, the court set trial to begin on September 21, 2021. The jury trial portion of the case commenced on September 21, 2021. The jury returned a verdict on September 27, 2021. The verdict found (i) Elysium liable for breaches of the Niagen® and pTeroPure® Supply Agreements for failing to pay for purchases of the ingredients totaling approximately $ 3.0 million, (ii) Mark Morris liable for breach of a confidentiality agreement, requiring him to disgorge approximately $ 17,307 , (iii) ChromaDex liable for breaching the Niagen® Supply Agreement for not issuing certain refunds or credits to Elysium in the amount of $ 625,000 , and (iv) ChromaDex liable for fraudulent inducement of the Licensing Agreement in the amount of $ 250,000 , along with $ 1,025,000 in punitive damages arising from the same counterclaim. On October 25, 2021, ChromaDex informed the court that it would request prejudgment interest on the approximately $ 3.0 million in damages awarded by the jury for Elysium’s breaches of the Niagen® and pTeroPure® Supply Agreements. On February 10, 2022, the court denied ChromaDex Inc.’s motion for prejudgment interest. 78 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements On February 18, 2022, ChromaDex and Elysium jointly filed a notice informing the court that ChromaDex had filed in the U.S. District Court for the Southern District of New York (SDNY Court) a motion to enforce a settlement agreement between ChromaDex and Elysium. On April 22, 2022, ChromaDex and Elysium jointly filed a notice informing the court that the SDNY Court had granted ChromaDex’s motion to enforce the settlement agreement. On August 22, 2022, ChromaDex filed a motion for entry of judgment pursuant to Federal Rule of Civil Procedure 54(b) on the basis that the settlement agreement was enforceable and resolved the claims and counterclaims tried to the jury in the California Action. On September 13, 2022, the court denied ChromaDex, Inc.’s motion for entry of judgment pursuant to Rule 54(b). On September 28, 2022, ChromaDex, Inc., Elysium, and Mark Morris filed a joint stipulation requesting that the court stay the California Action pending the final resolution of ChromaDex, Inc.’s appeal in the U.S. Court of Appeals for the Federal Circuit captioned ChromaDex, Inc. v. Elysium Health, Inc., No. 2022-1116 (the “Federal Circuit Appeal”). On September 28, 2022, the court issued an order staying the California Action pending the final resolution of the Federal Circuit Appeal. The California Action remained stayed until early 2024. On February 23, 2024, ChromaDex, Elysium, and Mark Morris filed a joint status report and stipulation requesting that the court approve a schedule for briefing concerning the judgment in the California Action. On February 26, 2024, the court approved the joint stipulation and adopted the parties’ proposed briefing schedule. On April 26, 2024, ChromaDex filed its motion for entry of final judgment. On August 13, 2024, the court granted ChromaDex’s motion for entry of final judgment and entered a judgment requiring Elysium to pay to ChromaDex the sum of $ 2,500,000 . On September 11, 2024, Elysium and Mark Morris filed a notice of appeal. On September 25, 2024, ChromaDex filed a notice of conditional cross-appeal. On September 3, 2024, ChromaDex filed with the district court a motion for attorney’s fees, costs, and interest. On October 8, 2024, the court issued an order granting ChromaDex’s request for interest and denying ChromaDex’s request for attorney’s fees and costs. In its October 8, 2024 order, the court awarded to ChromaDex pre-judgment interest in the amount of $ 21,768.82 and post-judgment interest accruing at the rate of 4.46 percent per annum until satisfaction of the $ 2,500,000 judgment. On November 7, 2024, ChromaDex filed a notice of appeal from the court’s order denying ChromaDex’s request for attorney’s fees and costs. On December 24, 2024, the parties reached a binding settlement agreement (the “Settlement Agreement”) to resolve the California Action, including any outstanding post-judgment matters, as well as each of the above-referenced appeals pending in the U.S. Court of Appeals for the Ninth Circuit (the “Appeals”). On December 26, 2024, pursuant to the Settlement Agreement, the parties filed with the district court a joint stipulation to amend the judgment, whereby the parties requested that the court vacate the August 13, 2024 judgment and enter an amended judgment consistent with the terms of the Settlement Agreement. On December 27, 2024, the court vacated the August 13, 2024 judgment and entered an amended judgment consistent with the terms of the parties’ Settlement Agreement as stated in the parties’ December 26, 2024 joint stipulation. Pursuant to the Settlement Agreement and the December 27, 2024 judgment: (i) Elysium must pay a total of $ 2,650,000 to ChromaDex to resolve the California Action and the Appeals (the “Settlement Payment”); (ii) the $ 2,650,000 Settlement Payment shall be paid in two equal installments of $ 1,325,000 each, the first of which was to be paid on or before December 31, 2024 (the “First Installment”), and the second of which is to be paid on or before March 31, 2025 (the “Second Installment”); (iii) if Elysium fails to timely pay either installment of the Settlement Payment, ChromaDex shall be entitled to recover from Elysium reasonable attorney’s fees and interest. The December 27, 2024 judgment also provides that the district court shall retain jurisdiction of the California Action until April 30, 2025 for the purposes of enforcing the terms of the December 27, 2024 judgment and the Settlement Agreement. On December 27, 2024, ChromaDex received from Elysium payment of the First Installment in the amount of $ 1,325,000 , which ChromaDex recorded as a recovery of credit losses within general and administrative expense in its Consolidated Statements of Operations. On December 30, 2024, pursuant to the Settlement Agreement, the parties filed with the Ninth Circuit a stipulated motion to voluntarily dismiss the pending Appeals, and on December 31, 2024, the Ninth Circuit dismissed the Appeals. 79 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements (B) Delaware - Patent Infringement Action On September 17, 2018, ChromaDex and Trustees of Dartmouth College filed a patent infringement complaint in the United States District Court for the District of Delaware against Elysium Health, Inc. The complaint alleges that Elysium’s BASIS® dietary supplement infringes U.S. Patent Nos. 8,197,807 (‘807 Patent) and 8,383,086 (‘086 Patent) that comprise compositions containing isolated nicotinamide riboside held by Dartmouth and licensed exclusively to ChromaDex On October 23, 2018, Elysium filed an answer to the complaint. The answer asserts various affirmative defenses and denies that Plaintiffs are entitled to any relief. On November 7, 2018, Elysium filed a motion to stay the patent infringement proceedings pending resolution of (1) the inter partes review of the ‘807 Patent and the ‘086 Patent before the Patent Trial and Appeal Board (PTAB) and (2) the outcome of the litigation in the California Action. ChromaDex filed an opposition brief on November 21, 2018 detailing the issues with Elysium’s motion to stay. In particular, ChromaDex argued that given claim 2 of the ‘086 Patent was only included in the PTAB’s inter partes review for procedural reasons the PTAB was unlikely to invalidate claim 2 and therefore litigation in Delaware would continue regardless. In addition, ChromaDex argued that the litigation in the California Action is unlikely to have a significant effect on the ongoing patent litigation. After the PTAB released its written decision upholding claim 2 of the ‘086 Patent, proving right ChromaDex’s prediction, ChromaDex informed the Delaware court of the PTAB’s decision on January 17, 2019. On June 19, 2019, the Delaware court granted in part and denied in part Elysium’s motion, ordering that the case was stayed pending the resolution of Elysium’s patent misuse counterclaim in the California Action. On November 1, 2019, ChromaDex filed a motion to lift the stay due to changed circumstances in the California Action, among other reasons. Briefing on the motion was completed on November 22, 2019. On January 6, 2020, the Delaware court issued an oral order instructing the parties to submit a joint status report after the January 13, 2020 motions hearing in the California Action. The joint status report was submitted on January 30, 2020. On February 4, 2020, the Delaware court issued an order granting ChromaDex’s motion to lift the stay and setting a scheduling conference for March 10, 2020. On March 19, 2020, the Delaware court entered a scheduling order, which, among other things, set the claim-construction hearing for December 17, 2020 and trial for the week of September 27, 2021. On April 17, 2020, ChromaDex served infringement contentions. Elysium filed a Second Amended Answer on July 10, 2020. On April 24, 2020, ChromaDex moved for leave to amend the complaint to add Healthspan Research, LLC as a plaintiff. On May 5, 2020, Elysium filed its opposition to ChromaDex’s motion for leave to amend and moved to dismiss ChromaDex for alleged lack of standing. ChromaDex filed its opposition to Elysium’s motion to dismiss and reply in support of its motion to amend on May 19, 2020. Elysium filed its reply in support of its motion to dismiss on May 26, 2020. The Court held a hearing on the motion for leave to amend the complaint and Elysium’s motion to dismiss on September 16, 2020. On December 15, 2020, the Court entered orders (i) granting in part and denying in part Elysium’s motion to dismiss ChromaDex for alleged lack of standing; and (ii) denying ChromaDex’s motion for leave to amend. ChromaDex filed a motion for reargument on December 29, 2020. Elysium filed a response to the motion for reargument on January 28, 2021. ChromaDex filed a motion for leave to file a reply on February 8, 2021. Elysium filed a response to the motion for leave to file a reply on February 12, 2021. ChromaDex filed a reply to the motion for leave to file a reply on February 19, 2021. The Court granted the motion for leave to file the reply on April 26, 2021, and denied the motion for reargument on April 27, 2021. On July 22, 2020 the parties filed a Joint Claim Construction Chart and respective motions for claim construction. The parties filed a Joint Claim Construction Brief on November 5, 2020. The Court held a Markman hearing on claim-construction issues on December 17, 2020. The Court entered a claim-construction ruling on January 5, 2021. Fact discovery closed on January 26, 2021. Opening expert reports were served on February 9, 2021. Responsive expert reports were served on March 9, 2021. Reply expert reports were served on March 30, 2021. Both parties filed dispositive and Daubert motions on April 27, 2021. On September 21, 2021, the Court granted Elysium’s motion for summary judgment that the claims of the ‘807 and ‘086 patents are invalid based on patent-ineligible subject matter. ChromaDex filed a notice of appeal on November 2, 2021. ChromaDex’s opening brief was filed on February 2, 2022. Elysium’s response brief was filed on April 11, 2022. ChromaDex’s reply brief was filed on May 9, 2022. Oral argument occurred on December 6, 2022. On February 13, 2023, the court of appeals issued a decision affirming the district court’s decision. On March 15, 2023, ChromaDex filed a petition for a panel rehearing and/or rehearing en banc. On April 10, 2023, the court of appeals invited Elysium to file a response to the petition and on April 24, 2023, Elysium filed a response to the petition. On May 10, 2023, the court of appeals denied the petition. On May 17, 2023, the court of appeals issued the mandate. On June 16, 2023, Elysium filed a bill of costs and a motion for attorneys’ fees and costs. On June 30, 2023, ChromaDex filed objections to Elysium’s bill of costs. On July 21, 2023, ChromaDex filed a response to Elysium’s motion for attorneys’ fees and costs. On July 28, 2023, ChromaDex filed an application for an extension of time to September 7, 2023 to file a petition for writ of certiorari . On August 1, 2023, the Supreme Court granted the requested 80 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements extension. On August 14, 2023, Elysium filed a reply in support of its motion for attorneys’ fees and costs. On September 7, 2023, ChromaDex filed a petition for writ of certiorari . On October 16, 2023, the Supreme Court denied the petition. On March 25, 2024, the Court granted Elysium’s motion for attorneys’ fees and costs. 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. On August 20, 2024, the Court issued a ruling on the parties’ disputes regarding the amount of fees and costs and instructed the parties to meet and confer about the next steps in light of the ruling. On October 1, 2024, the parties submitted a joint motion for entry of judgment. On October 28, 2024, the court issued its final judgement resolving the amount of fees and costs granting $ 9.2 million, plus judgment interest on this amount calculated at a rate of 5.02 % compounded annually on any unpaid balance for the period from March 25, 2024, until ChromaDex pays the total sum owed. On December 4, 2024, ChromaDex filed an unopposed motion in the district court to approve bond and stay enforcement under Rule 62. On December 6, 2024, the Court granted the motion. On November 25, 2024, ChromaDex appealed the final judgment to the U.S. Court of Appeals for the Federal Circuit. On February 26, 2025, ChromaDex filed its opening appeal brief. Elysium’s response brief is currently due on April 7, 2025. In connection with the Court's current ruling and the Company’s filed appeal, management has assessed that it is reasonably possible a contingent liability will be incurred. If the Company is successful in its appeal, no liability would be incurred. The Company believes the Court abused its discretion in granting the award. However, if the Company is not successful, the Company may be liable for the aggregate amount sought by Elysium, which, inclusive of ChromaDex’s estimates for post-judgment interest through the anticipated appeal, is approximately $ 10.4 million. As of December 31, 2024, the Company has not recorded an accrual for this matter, as the ultimate resolution remains uncertain. 2. Contingencies (A) In September 2019, the Company received a letter from a licensor stating that the Company owed the licensor $ 1.6 million plus interest for sublicense fees as a result of the Company entering into a supply agreement with a customer. After reviewing the relevant facts and circumstances, the Company believes that the Company does not owe any sublicense fees to the licensor and has corresponded with the licensor to resolve the matter. The Company does not believe that the ultimate resolution of this matter will be material to the Company’s results of operations, financial condition or cash flows. (B) On November 17, 2020, the Company received a warning letter (the Letter) from the United States Food and Drug Administration (FDA) and Federal Trade Commission (FTC). The Letter references statements issued by the Company relating to preclinical and clinical research results involving nicotinamide riboside and COVID-19. The statements were included in press releases and referenced in social media posts. On November 18, 2020, the Company provided a response to the Letter stating that the Company disagrees with the assertion in the Letter that the Company’s products are intended to mitigate, prevent, treat, diagnose or cure COVID-19 in violation of certain sections of the Federal Food, Drug, and Cosmetic Act or that they were unsubstantiated under the FTC Act, but rather accurately reflected the state of the science and the results of scientific research. Nonetheless, the Company also responded that it had deleted social media references to the studies and removed related press releases from its website. On April 30, 2021, the Company received an additional warning letter (the Second Letter) from only the FTC. The Second Letter references the original Letter, and cites additional statements issued by the Company and certain officers and advisors of the Company relating to nicotinamide riboside and scientific studies related to COVID-19. The Second Letter asserts that such statements contain coronavirus-related prevention or treatment claims and are deceptive in violation of the Federal Trade Commission Act. On May 4, 2021, the Company provided a response to the Second Letter stating that it had removed the social posts from its accounts identified in the Second Letter and requested that third parties remove the post from their accounts that were identified in the Second Letter. The Company stated that the press release identified in the Second Letter is appropriate and not a deceptive act or practice under applicable law. The Company affirmed its belief in the need to accurately report on the scientific results of its studies to its investors and welcomed the opportunity to discuss its research and development program with the FTC and receive guidance on future releases. The Company does not believe that the ultimate resolution of this matter will be material to the Company’s results of operations, financial condition or cash flows. 81 Table of Contents ChromaDex Corporation and Subsidiaries Notes to the Consolidated Financial Statements Note 17. Employee Retention Tax Credit In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law, providing numerous tax provisions and other stimulus measures, including the Employee Retention Tax Credit (ERTC): a refundable tax credit against certain employment taxes for qualifying businesses keeping employees on their payroll during the COVID-19 pandemic. The ERTC was subsequently amended by the Taxpayer Certainty and Disaster Tax Relief Act of 2020, the Consolidated Appropriation Act of 2021, and the American Rescue Plan Act of 2021, all of which amended and extended the ERTC availability and guidelines under the CARES Act. During the third quarter of 2022, the Company evaluated its eligibility for the ERTC and is eligible to claim a refundable tax credit against the employer share of Social Security taxes equal to fifty percent (50%) of the qualified wages paid to employees between March 27, 2020 and December 31, 2020 and seventy percent (70%) of the qualified wages paid to employees between January 1, 2021 and September 30, 2021. For fiscal year 2020, qualified wages are limited to $10,000 annually per employee for a maximum allowable ERTC per employee of $5,000 annually and qualified wages are limited to $10,000 per calendar quarter in 2021 for a maximum allowable ERTC per employee of $7,000 for each calendar quarter in 2021. The Company determined that it qualified for the ERTC in the last three quarters of 2020 and all three quarters of 2021 and filed a claim for the credit in August 2022. During the quarter ended September 30, 2022, the Company recorded an aggregate benefit of approximately $ 2.1 million to reflect the ERTC for all eligible quarters. During the year ended December 31, 2023, the Company collected $ 0.9 million related to the ERTC. No amounts related to the ERTC were collected during the year ended December 31, 2024. As of December 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. 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 2023, citing ongoing concerns about improper claims. The IRS guaranteed ongoing processing of existing claims, albeit at a reduced pace and with increased compliance scrutiny. The Company is diligently monitoring the situation to ensure continued compliance. Note 18. Subsequent Events Amendment to Amended and Restated Executive Employment Agreement On February 25, 2025, the Company and Robert Fried, the Chief Executive Officer of the Company and a member of the Company’s Board of Directors (the “Board”), entered into an amendment (the “Amendment”) to the Amended and Restated Executive Employment Agreement, dated June 22, 2018, by and between the Company and Mr. Fried (the “Employment Agreement”). The Amendment provides that (i) effective January 1, 2025, Mr. Fried will be entitled to receive a base salary of $ 650,000 , and (ii) commencing with fiscal year 2025, Mr. Fried’s target performance bonus opportunity will be 75 % of his base salary. The foregoing summary of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is attached as Exhibit 10.17 to this Annual Report on Form 10-K. Grant of Performance Stock Units On February 25, 2025, the Board of Directors, following the recommendation of its Compensation Committee, approved the grant of 1,518,600 performance stock units ("PSUs") to the Company's Chief Executive Officer under the 2017 Equity Incentive Plan. The PSUs vest based on the achievement of specified stock price performance thresholds over a seven-year period, with vesting occurring in increments upon acheiving and maintaining target volume-weighted average prices for a minimum period. Any unvested PSUs will be forfeited at the end of the performance period, and vested shares will be subject to transfer restrictions. In the event of a Change in Control (as defined in the PSU Award Agreement) or certain termination scenarios, modified vesting terms may apply. The foregoing summary of the PSUs does not purport to be complete and is qualified in its entirety by reference to the full text of the PSU Award Agreement, a copy of which is attached as Exhibit 10.18 to this Annual Report on Form 10-K. 82 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure On October 8, 2024, Marcum LLP (“Marcum”), the Company’s former independent registered public accounting firm, notified the Company of its resignation from its role as the Company’s independent registered public accounting firm, effective October 31, 2024. On December 13, 2024, the Company engaged Crowe LLP as its new independent registered public accounting firm. These changes were previously disclosed in the Company’s Current Reports on Form 8-K filed with the Securities and Exchange Commission on October 11, 2024 and December 16, 2024, respectively. The disclosures in those reports include the details required by Item 304 of Regulation S-K, including the absence of any (i) disagreements with Marcum on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure or (ii) or reportable events, each as defined in Item 304(a)(1)(iv) of Regulation S-K. A copy of Marcum's letter addressed to the SEC was filed as Exhibit 16.1 to the Company’s Current Report on Form 8-K filed on October 11, 2024.