What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-05-06 compared with 2020-11-04 · 165 added, 225 removed, 423 unchanged (48% of the section changed)

2 unchanged sentences

Condensed Consolidated Balance Sheets

September 30, 2020 and December 31, 2019

March 31, 2021 and December 31, 2020

(In thousands, except per share data)

26 unchanged sentences

authorized 150,000 shares;

issued and outstanding September 30, 2020 61,587 shares and

December 31, 2019 59,562 shares

issued and outstanding March 31, 2021 67,702 shares and December 31, 2020 61,881 shares

Additional paid-in capital

6 unchanged sentences

Condensed Consolidated Statements of Operations

For the Three and the Nine Month Periods Ended September 30, 2020 and September 30, 2019

For the Three Month Periods Ended March 31, 2021 and March 31, 2020

(In thousands, except per share data)

Three Months Ended

Nine Months Ended

Cost of sales

9 unchanged sentences

Basic and diluted loss per common share

Basic and diluted weighted average

common shares outstanding

Basic and diluted weighted average common shares outstanding

See Notes to Consolidated Financial Statements.

1 unchanged sentence

Condensed Consolidated Statement of Stockholders' Equity

For the Three Month Periods Ended September 30, 2020 and September 30, 2019

For the Three Month Periods Ended March 31, 2021 and March 31, 2020

(In thousands)

Stockholders'

Balance, June 30, 2020

Exercise of stock options

Share-based compensation

Balance, September 30, 2020

$ ( 135,728 )

Paid-in Capital

Stockholders'

Balance, June 30, 2019

Balance, January 1, 2021

$ ( 141,825 )

Issuance of common stock, net of offering costs of $0.1 million

Issuance of common stock for conversion of debt and accrued interest

Debt discount to convertible notes

Exercise of stock options

Exercise of warrants

Share-based compensation

Balance, September 30, 2019

Balance, March 31, 2021

$ ( 149,206 )

See Notes to Consolidated Financial Statements.

ChromaDex Corporation and Subsidiaries

Condensed Consolidated Statement of Stockholders' Equity

For the Nine Month Periods Ended September 30, 2020 and September 30, 2019

(In thousands)

Paid-in Capital

Stockholders'

Balance, December 31, 2019

$ ( 121,900 )

Issuance of common stock, net of offering costs of $0.1 million

Exercise of stock options

Share-based compensation

Translation adjustment

Balance, September 30, 2020

Balance, January 1, 2020

$ ( 121,900 )

Stockholders'

Balance, December 31, 2018

Issuance of common stock, net of offering costs of $0.2 million

Issuance of common stock for conversion of debt and accrued interest

Debt discount to convertible notes

Exercise of stock options

Exercise of warrants

Share-based compensation

Balance, September 30, 2019

Balance, March 31, 2020

$ ( 127,802 )

2 unchanged sentences

Condensed Consolidated Statements of Cash Flows

For the Nine Month Periods Ended September 30, 2020 and September 30, 2019

For the Three Month Periods Ended March 31, 2021 and March 31, 2020

(In thousands)

6 unchanged sentences

Allowance for doubtful trade receivables

Amortization of convertible notes issuance costs

Non-cash financing costs

1 unchanged sentence

Trade receivables

Implementation costs for cloud computing arrangement

Prepaid expenses and other assets

1 unchanged sentence

Accrued expenses

Deferred revenue

Customer deposits and other

3 unchanged sentences

Purchases of leasehold improvements and equipment

Purchases of intangible assets

Investment in other long-term assets

2 unchanged sentences

Proceeds from issuance of common stock, net

Proceeds from sale of convertible notes

Payment of convertible notes issuance costs

Proceeds from exercise of stock options

2 unchanged sentences

Net cash provided by financing activities

Net decrease in cash

Net increase (decrease) in cash

Cash Beginning of Period, including restricted cash of $0.2 million for both 2021 and 2020

2 unchanged sentences

Cash payments for interest on finance leases

Supplemental Schedule of Noncash Operating Activity

Financing lease obligation incurred for prepayment of licensing fees

Operating lease obligation incurred for entering into lease amendment

Supplemental Schedule of Noncash Investing Activity

Financing lease obligation incurred for purchase of computer equipment and software

Operating lease obligation incurred for tenant improvement credit received

Supplemental Schedule of Noncash Financing Activity

Issuance of common stock for conversion of debt and accrued interest

See Notes to Consolidated Financial Statements.

Interim Financial Statements

The accompanying financial statements of ChromaDex Corporation and its wholly owned subsidiaries, ChromaDex, Inc., Healthspan Research, LLC, ChromaDex Analytics, Inc.

and ChromaDex Asia Limited (collectively referred to herein as “ChromaDex” or the “Company” or, in the first person as “we”, “us” and “our”) include all adjustments, consisting of normal recurring adjustments and accruals, that, in the opinion of the management of the Company, are necessary for a fair presentation of the Company’s financial position as of September 30, 2020 and results of operations and cash flows for the three and the nine months ended September 30, 2020 and September 30, 2019.

These unaudited interim financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended December 31, 2019 appearing in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “Commission”) on March 10, 2020, as amended on May 18, 2020.

Operating results for the nine months ended September 30, 2020 are not necessarily indicative of the results to be achieved for the full year ending on December 31, 2020.

The accompanying financial statements of ChromaDex Corporation and its wholly owned subsidiaries, ChromaDex, Inc., ChromaDex Analytics, Inc., ChromaDex Asia Limited and ChromaDex Europa B.V.

(collectively referred to herein as “ChromaDex” or the “Company” or, in the first person as “we”, “us” and “our”) include all adjustments, consisting of normal recurring adjustments and accruals, that, in the opinion of the management of the Company, are necessary for a fair presentation of the Company’s financial position as of March 31, 2021 and results of operations and cash flows for the three months ended March 31, 2021 and March 31, 2020.

These unaudited interim financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the year ended December 31, 2020 appearing in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “Commission”) on March 12, 2021.

Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results to be achieved for the full year ending on December 31, 2021.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period.

2 unchanged sentences

Nature of Business

ChromaDex is a science-based integrated nutraceutical company devoted to improving the way people age.

ChromaDex scientists partner with leading universities and research institutions worldwide to discover, develop and create solutions to deliver the full potential of nicotinamide adenine dinucleotide and its impact on human health.

Its flagship ingredient, NIAGEN® nicotinamide riboside, sold directly to consumers as TRU NIAGEN®, is backed with clinical and scientific research, as well as extensive intellectual property protection.

ChromaDex is a global bioscience company dedicated to healthy aging.

The ChromaDex team, which includes world-renowned scientists, is pioneering research on nicotinamide adenine dinucleotide (“NAD+”), levels of which decline with age.

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

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

ChromaDex delivers NIAGEN® as the sole active ingredient in its consumer product TRU NIAGEN®.

The Company also has analytical reference standards and services segment, which focuses on natural product fine chemicals (known as “phytochemicals”) and related chemistry services.

The Company's net cash outflow from operating activities was approximately $10.6 million for the nine-month period ended September 30, 2020.

As of September 30, 2020, cash and cash equivalents totaled approximately $ 15.5 million, which includes restricted cash of approximately $ 0.2 million.

The Company anticipates that its current cash, cash equivalents, cash to be generated from operations and available line of credit up to $ 7.0 million from Western Alliance Bank will be sufficient to meet its projected operating plans through at least the next twelve months from the issuance date of this report.

The Company's net cash outflow from operating activities was approximately $ 5.4 million for the three-month period ended March 31, 2021.

As of March 31, 2021, cash and cash equivalents totaled approximately $ 44.7 million, which includes restricted cash of approximately $ 0.2 million.

The Company anticipates that its current cash, cash equivalents, and available line of credit up to $ 7.0 million from Western Alliance Bank will be sufficient to meet its projected operating plans through 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 meet its projected operating plans within the next twelve months and/or to fund its longer-term strategic objectives.

In June 2020, we filed a $ 125.0 million registration statement on Form S-3 with the Commission, utilizing a “shelf” registration process.

Under this shelf registration process, we may sell securities from time to time, including up to $ 50.0 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.

(the “ATM Facility”).

As of March 31, 2021, we have not sold any securities pursuant to the ATM Facility.

Significant Accounting Policies

15 unchanged sentences

ASU 2016-13 is effective for public entities for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years.

The Company can elect to defer compliance effective for fiscal years beginning after December 15, 2022.

Public entities that qualify as a smaller reporting company can elect to defer compliance effective for fiscal years beginning after December 15, 2022.

We are currently evaluating the impact of our pending adoption of ASU 2016-13 on our consolidated financial statements.

Earnings Per Share Applicable to Common Stockholders

The following table sets forth the computations of earnings per share amounts applicable to common stockholders for the three and the nine months ended September 30, 2020 and September 30, 2019:

The following table sets forth the computations of earnings per share amounts applicable to common stockholders for the three months ended March 31, 2021 and March 31, 2020:

Three Months Ended

Nine Months Ended

(In thousands, except per share data)

Basic and diluted loss per common share

Basic and diluted weighted average

common shares outstanding (1):

Basic and diluted weighted average common shares outstanding (1):

Potentially dilutive securities (2):

Stock options

Restricted stock units

______________

Includes approximately 0.2 million and 0.2 million nonvested restricted stock for the periods ending Sep.

30, 2020and Sep.

(1) Includes approximately 0.2 million and 0.2 million nonvested shares of restricted stock for the periods ending Mar.

31, 2021 and Mar.

31, 2020, respectively, which are participating securities that feature voting and dividend rights.

4 unchanged sentences

Three months ended

Nine months ended

Trade receivable at

4 unchanged sentences

$ 0.9 million

$ 1.0 million

$ 0.8 million

Horizon Ventures (1)

$ 1.6 million

$ 2.5 million

$ 2.3 million

$ 7.2 million

$ 5.5 million

$ 1.0 million

$ 0.8 million

_______________

Watson Group and Horizon Ventures are related parties through common ownership of an enterprise that beneficially owns more than 10% of the common stock of the Company.

(1) For the nine months ended September 30, 2020, Horizon Ventures made purchases to donate to the healthcare workers in Hong Kong hospitals.

The amounts of major classes of inventory as of September 30, 2020 and December 31, 2019 are as follows:

Watson Group is a related party through common ownership of an enterprise that beneficially owns more than 10% of the common stock of the Company.

The amounts of major classes of inventory as of March 31, 2021 and December 31, 2020 are as follows:

(In thousands)

4 unchanged sentences

Stock Issuance

On April 27, 2020, the Company entered into a Securities Purchase Agreement with related parties pursuant to which the Company agreed to sell and issue approximately 1.2 million shares for $ 5.0 million, or $ 4.08 per share.

The selling price was determined by the average closing price over the ten trading days immediately preceding the date of Securities Purchase Agreement (the “Financing”).

On May 7, 2020, the Company closed the Financing and received proceeds of $ 4.9 million, net of offering costs.

On February 20, 2021, the Company entered into a Securities Purchase Agreement with EverFund (the "Financing”) pursuant to which the Company agreed to sell and issue approximately 3.8 million of common stock at a price of $ 6.50 per share.

On February 23, 2021, the Company closed the Financing and received proceeds of $ 24.9 million, net of offering costs.

Operating Leases

On August 3, 2020, the Company entered into a lease amendment to lease additional space located in Longmont, Colorado.

The lease amendment extends the expiration of the lease period from February 2024 to December 2025.

Pursuant to the lease amendment, the Company will make additional total lease payments of approximately $ 0.9 million during the term of the lease.

As of September 30, 2020, the Company had operating lease assets in right of use assets of approximately $ 1.3 million and corresponding operating lease liabilities of approximately $ 1.7 million.

For the three and the nine months ended September 30, 2020 and September 30, 2019, the following were expenses incurred in connection with our operating leases:

As of March 31, 2021, the Company had right of use assets stemming from operating leases of approximately $ 1.1 million, and corresponding operating lease liabilities of approximately $ 1.4 million.

For the three months ended March 31, 2021 and March 31, 2020, the following were expenses incurred in connection with our operating leases:

(In thousands)

For the Three Months Ended Sep.

For the Nine Months Ended Sep.

Operating leases

6 unchanged sentences

Weighted-average discount rate operating leases

Minimum future lease payments under operating leases as of September 30, 2020 are as follows:

Minimum future lease payments under operating leases as of March 31, 2021 are as follows:

(In thousands)

4 unchanged sentences

Year Ending December 31, 2025

Less present value discount

2 unchanged sentences

Long-term obligations under operating leases

Finance Leases

As of September 30, 2020, the Company had finance lease assets in equipment assets of approximately $ 0.4 million and corresponding finance lease liabilities of approximately $ 0.1 million.

For the three and the nine months ended September 30, 2020 and September 30, 2019, the following were expenses incurred in connection with our finance leases:

(In thousands)

For the Three Months Ended Sep.

For the Nine Months Ended Sep.

Finance leases

Amortization of equipment assets

Interest on lease liabilities

Total expenses

Weighted-average remaining lease term (years) – finance leases

Weighted-average discount rate – finance leases

Minimum future lease payments under finance leases as of September 30, 2020 are as follows:

(In thousands)

Three Months Ending December 31, 2020

Year Ending December 31, 2021

Year Ending December 31, 2022

Less present value discount

Finance lease liabilities

Less current portion

Long-term obligations under finance leases

Share-Based Compensation

On June 20, 2017, the stockholders of the Company approved the ChromaDex Corporation 2017 Equity Incentive Plan (the "2017 Plan").

The Company's Board of Directors amended the 2017 Plan in January 2018 and the stockholders of the Company approved amendments to the 2017 Plan in June 2018 and June 2020.

The 2017 Plan is the successor to the ChromaDex Corporation Second Amended and Restated 2007 Equity Incentive Plan (the "2007 Plan").

As of September 30, 2020, under the 2017 Plan, the Company is authorized to issue shares subject to awards that total no more than the sum of (i) 14,500,000 new shares, (ii) approximately 384,000 unallocated shares remaining available for the grant of new awards under the 2007 Plan, (iii) any returning shares from the 2007 Plan or the 2017 Plan, such as forfeited, cancelled, or expired shares and (iv) 500,000 shares pursuant to an inducement award.

The remaining number of shares available for issuance under the 2017 Plan totaled approximately 6.7 million shares at September 30, 2020.

At the discretion of the compensation committee of the Board of Directors (the “Compensation Committee”), the Company may grant options to purchase the Company’s common stock, restricted stock units and other equity awards to certain individuals from time to time.

Management and the Compensation Committee determine the terms of awards which include the exercise price, vesting conditions and expiration dates at the time of grant.

Expiration dates for stock options are not to exceed 10 years from their date of issuance.

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.

As of March 31, 2021, under the 2017 Plan, the Company is authorized to issue shares subject to awards that total no more than the sum of (i) 14,500,000 new shares, (ii) approximately 384,000 unallocated shares remaining available for the grant of new awards under the Second Amended and Restated 2007 Equity Incentive Plan, (iii) any returning shares such as forfeited, cancelled, or expired shares and (iv) 500,000 shares pursuant to an inducement award.

The remaining number of shares available for issuance under the 2017 Plan totaled approximately 5.6 million shares at March 31, 2021.

General Vesting Conditions

The stock option awards generally vest ratably over a three-year period following grant date after a passage of time.

However, some stock option awards are market or performance based and vest based on certain triggering events established by the Compensation Committee of the Board of Directors.

The stock option and restricted stock unit awards are generally subject to a one-year cliff vesting period after which 1/3 of the shares vest with the remaining shares vesting ratably over a two-year period subject to the passage of time.

However, some stock option awards are market or performance based and vest based on certain triggering events established by the Compensation Committee.

The fair value of the Company’s stock options that are not market based is estimated at the date of grant using the Black-Scholes option pricing model.

The table below outlines the weighted average assumptions for options granted during the nine months ended September 30, 2020.

Nine months Ended September 30, 2020

The table below outlines the weighted average assumptions for options granted during the three months ended March 31, 2021.

Three months Ended March 31, 2021

Expected term

3 unchanged sentences

Service Period Based Stock Options

The following table summarizes activity of service period-based stock options at September 30, 2020 and changes during the nine months then ended (in thousands except per-share data and remaining contractual term):

The following table summarizes activity of service period-based stock options at March 31, 2021 and changes during the three months then ended (in thousands except per-share data and remaining contractual term):

Weighted Average

2 unchanged sentences

Options Exercised

Options Expired

Options Forfeited

Outstanding at Sep.

Exercisable at Sep.

*The aggregate intrinsic values in the table above are based on the Company’s stock price of $ 4.01 , which is the closing price of the Company’s stock on the last day of business for the period ended September 30, 2020.

Outstanding at Mar.

Exercisable at Mar.

*The aggregate intrinsic values in the table above are based on the Company’s stock price of $ 9.34 , which is the closing price of the Company’s stock on the last day of business for the period ended March 31, 2021.

Performance Based Stock Options

The Company also grants stock option awards that are performance based and vest based on the achievement of certain criteria established from time to time by the Compensation Committee of the Board of Directors.

The Company also grants stock option awards that are performance based and vest based on the achievement of certain criteria established from time to time by the Compensation Committee.

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

The following table summarizes performance based stock options activity at September 30, 2020 and changes during the nine months then ended (in thousands except per share data and remaining contractual term):

The following table summarizes performance based stock options activity at March 31, 2021 and changes during the three months then ended (in thousands except per share data and remaining contractual term):

Weighted Average

3 unchanged sentences

Options Forfeited

Outstanding at Sep.

Exercisable at Sep.

*The aggregate intrinsic values in the table above are based on the Company’s stock price of $4.01, which is the closing price of the Company’s stock on the last day of business for the period ended September 30, 2020.

Outstanding at Mar.

Exercisable at Mar.

*The aggregate intrinsic values in the table above are based on the Company’s stock price of $9.34, which is the closing price of the Company’s stock on the last day of business for the period ended March 31, 2021.

Total Remaining Unamortized Compensation for Stock Options

As of September 30, 2020, there was approximately $ 7.8 million of total unrecognized compensation expense related to non-vested share-based compensation arrangements granted under the plans for employee stock options.

As of March 31, 2021, there was approximately $ 10.0 million of total unrecognized compensation expense related to non-vested stock options granted under the plans.

That cost is expected to be recognized over a weighted average period of 2 years.

Share-Based Compensation

Share-based compensation expenses were as follows:

Restricted Stock Units

Restricted stock unit awards are generally subject to a one-year cliff vesting period after which 1/3 of the shares vest with the remaining shares vesting ratably over a two-year period subject to the passage of time.

The following table summarizes activity of restricted stock unit awards granted at March 31, 2021 and changes during the three months then ended (in thousands except per share fair value):

Unvested shares at Dec.

Unvested shares at Mar.

Expected to Vest as of Mar.

Total Share-Based Compensation

Total share-based compensation expenses were as follows:

Three months ending

Nine months ending

(In thousands)

5 unchanged sentences

Business Segments

The Company has the following three reportable segments for the three- and nine-month periods ended September 30, 2020:

The Company has the following three reportable segments for the three-month period ended March 31, 2021:

Consumer products segment:

9 unchanged sentences

Analytical Reference

September 30, 2020

March 31, 2021

Standards and

10 unchanged sentences

Analytical Reference

September 30, 2019

Standards and

(In thousands)

Services segment

Cost of sales

Operating expenses:

Sales and marketing

Research and development

General and administrative

Operating expenses

Operating income (loss)

Nine months ended

Analytical Reference

September 30, 2020

Standards and

(In thousands)

Services segment

Cost of sales

Operating expenses:

Sales and marketing

Research and development

General and administrative

Operating expenses

Operating income (loss)

Nine months ended

Analytical Reference

September 30, 2019

March 31, 2020

Standards and

9 unchanged sentences

Analytical Reference

At September 30, 2020

At March 31, 2021

Standards and

9 unchanged sentences

See details in the tables below.

Three Months Ended September 30, 2020

(In thousands)

Analytical Reference Standards

TRU NIAGEN®, Consumer Product

NIAGEN® Ingredient

Subtotal NIAGEN Related

Other Ingredients

Reference Standards

Consulting and Other

Subtotal Other Goods and Services

Total Net Sales

Three Months Ended September 30, 2019

(In thousands)

Analytical Reference Standards

TRU NIAGEN®, Consumer Product

NIAGEN® Ingredient

Subtotal NIAGEN Related

Other Ingredients

Reference Standards

Consulting and Other

Subtotal Other Goods and Services

Total Net Sales

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

(In thousands)

8 unchanged sentences

Total Net Sales

Nine Months Ended September 30, 2019

Three Months Ended March 31, 2020

(In thousands)

11 unchanged sentences

Three months ended

Nine months ended

Major Customers

Watson Group - Related Party

Life Extension

* Represents less than 10%.

Major accounts which had more than 10% of the Company’s total trade receivables were as follows:

Percentage of the Company's Total Trade Receivables

Major Accounts

At September 30, 2020

Major Customers

At December 31, 2020

Watson Group - Related Party

Amazon Marketplaces

Life Extension

Matakana Health

Life Extension

Amazon Marketplaces

* Represents less than 10%.

Commitments and Contingencies

Inventory Purchase Obligations

In the third quarter of 2020, the Company entered into an amended manufacturing and supply agreement whereby the Company is obligated to purchase approximately $ 18.3 million of total inventory through December 31, 2021.

The Company’s remaining purchase obligations as of September 30, 2020 were as follows:

Three Months Ending December 31, 2020

$ 3.7 Million

Twelve Months Ending December 31, 2021

$ 14.6 Million

$ 18.3 Million

Legal proceedings - Elysium Health, LLC

Legal proceedings

Elysium Health, LLC

(A) California Action

48 unchanged sentences

The court held a telephonic status conference on June 9, 2020, during which the court indicated that it will reschedule the jury trial as soon as conditions permit.

On October 21, 2020, the court ordered the parties to confer and submit by no later than November 4, 2020, a joint status report that includes a proposed trial date.

On November 4, 2020, the parties submitted a joint status report indicating that they will propose a new trial date as soon as the court announces that it will resume jury trials.

On November 18, 2020, the court set trial to begin on September 21, 2021.

On December 11, 2020, Elysium filed a “Notice of Correction of Depositions” related to the depositions of its chief executive officer, Eric Marcotulli, and chief operating officer, Daniel Alminana, both taken in March 2019.

On March 8, 2021, based in part on information that Elysium submitted under seal with that notice, ChromaDex, Inc.

filed a motion for sanctions or, in the alternative, reconsideration of the court’s January 16, 2020 order regarding summary judgment, in which ChromaDex, Inc.

moved to dismiss Elysium’s third, fourth, and fifth counterclaims.

Elysium’s opposition brief was filed on March 22, 2021.

ChromaDex, Inc.

filed its reply brief on March 29, 2021.

On April 27, 2021, the court denied ChromaDex, Inc’s motion for terminating sanctions, but concluded that the evidence at issue in the motion will be admissible at trial.

(B) Southern District of New York Action

2 unchanged sentences

(the “Elysium SDNY Complaint”).

Elysium Health alleges in the Elysium SDNY Complaint that ChromaDex, Inc.

Elysium Health alleged in the Elysium SDNY Complaint that ChromaDex, Inc.

made false and misleading statements in a citizen petition to the Food and Drug Administration it filed on or about August 18, 2017.

Among other allegations, Elysium Health avers that the citizen petition made Elysium Health’s product appear dangerous, while casting ChromaDex, Inc.’s own product as safe.

The Elysium SDNY Complaint asserts four claims for relief:

Among other allegations, Elysium Health averred that the citizen petition made Elysium Health’s product appear dangerous, while casting ChromaDex, Inc.’s own product as safe.

The Elysium SDNY Complaint asserted four claims for relief:

(i) false advertising under the Lanham Act, 15 U.S.C.

2 unchanged sentences

and (iv) tortious interference with prospective economic relations.

ChromaDex, Inc.

denies the claims in the Elysium SDNY Complaint and intends to defend against them vigorously.

On October 26, 2017, ChromaDex, Inc.

40 unchanged sentences

filed an answer and objection to Elysium Health’s third amended counterclaims.

On December 14, 2020, Elysium Health filed a motion to supplement and amend its counterclaims to add claims regarding alleged advertising related to COVID, to add an allegation about a change to the ChromaDex website, and to remove its copyright infringement claim under the Copyright Act.

On January 19, 2021, the Court denied Elysium Health’s motion to add claims regarding alleged advertising related to COVID.

The Court granted the unopposed requests to add an allegation about a change to ChromaDex’s website and to remove Elysium’s Copyright Act claim.

Pursuant to the Court’s order, Elysium filed fourth amended counterclaims on April 21, 2021.

All discovery closed on April 23, 2021 and the deadline to submit the Joint Pretrial Report is June 22, 2021.

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

The Company is unable to predict the outcome of these matters and, at this time, cannot reasonably estimate the possible loss or range of loss with respect to the legal proceedings discussed herein.

As of September 30, 2020, ChromaDex, Inc.

As of March 31, 2021, ChromaDex, Inc.

did not accrue a potential loss for the California Action or the Elysium SDNY Complaint because ChromaDex, Inc.

26 unchanged sentences

served infringement contentions.

Elysium filed a Second Amended Answer on July 10, 2020.

On April 24, 2020, ChromaDex, Inc.

5 unchanged sentences

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, but has not yet issued a ruling.

Elysium filed a Second Amended Answer on July 10, 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, Inc.

for alleged lack of standing;

and (ii) denying ChromaDex, Inc.’s motion for leave to amend.

ChromaDex, Inc.

filed a motion for reargument on December 29, 2020.

Elysium filed a response to the motion for reargument on January 28, 2021.

ChromaDex, Inc.

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, Inc.

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’ Joint Claim Construction Brief is due on November 5, 2020.

The Court will hold a Markman hearing on claim-construction issues on December 17, 2020.

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.

Trial is scheduled for September 27-30, 2021.

(A) Employee Dispute

On September 25, 2020, the Company received a demand letter from a former employee, alleging a series of employment-related claims against the Company after the employee was laid off as part of a company restructuring.

The employee alleges she was harassed and, ultimately, terminated in retaliation for taking intermittent leave, under the Family and Medical Leave Act.

No lawsuit has been filed to date.

The Company believes these claims are without merit and is seeking to amicably resolve the matter pre-lawsuit.

The Company does not anticipate that the ultimate resolution of this matter will be material to the Company’s operations, financial condition or cash flows.

(B) Rejuvenation Therapeutics

On September 15, 2020, the Company received a letter from a customer, Rejuvenation Therapeutics Corp.

(“Rejuvenation”), and has received subsequent correspondence, requesting a full refund of approximately $ 1.6 million of NIAGEN® it purchased, alleging breaches of the supply agreement between the parties.

The Company believes these claims are without merit and is seeking to amicably resolve the matter pre-lawsuit.

As of March 31, 2021, the Company has recorded a return liability of approximately $ 0.5 million, which the Company has offered to settle in good faith.

The Company does not anticipate that the ultimate resolution of this matter will be material to the Company’s operations, financial condition or cash flows.

On or around September 28, 2020, Thorne Research, Inc.

(“Thorne”) provided notice to ChromaDex, Inc.

that it intended to terminate its March 25, 2019 Supply Agreement and subsequent amendments with ChromaDex, Inc., effective as of December 31, 2020.

A discussion between ChromaDex, Inc.

and Thorne followed, and Thorne asserted that it could challenge the ‘086 Patent in an inter partes review (“IPR”) proceeding on the basis of prior art, but would be willing to enter into a mutual existence agreement that would permit Thorne to source NR from a third party.

Thorne did not offer substantive information supporting a prior art claim or about the nature of the threatened IPR.

On December 1, 2020, Thorne filed a petition for IPR of the ‘086 Patent.

Dartmouth’s preliminary response to the petition was filed on on March 15, 2021.

On February 1, 2021, Thorne filed a petition for IPR of the ‘807 Patent.

Dartmouth’s preliminary response to the petition is due on May 18, 2021.

From time to time we are involved in legal proceedings arising in the ordinary course of our business.

1 unchanged sentence

Contingencies

In September 2019, the Company received a letter from a licensor stating that the Company owed the licensor $1.6 million plus interest of sublicense fees as a result of the Company entering into the supply agreement with a customer.

(A) In September 2019, the Company received a letter from a licensor stating that the Company owed the licensor $ 1.6 million plus interest of sublicense fees as a result of the Company entering into the 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 FD&C 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 R&D 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.

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

What changed 10-Q

Item 1. Financial Statements