ChromaDex Settles with Dartmouth, Waives $3.5M in Fees

TL;DR

ChromaDex dodges $3.5M Dartmouth payment, but needs a surety bond post-Elysium judgment.

AI Summary

ChromaDex Corp. reported on its 10-Q filing for the period ending September 30, 2024. A significant subsequent event is the Settlement Agreement with Dartmouth College, effective October [XX], 2024. Under this agreement, Dartmouth will waive approximately $3.5 million in royalty and license maintenance fees owed by ChromaDex and will not assess further payments for the Dartmouth Patents. This waiver is contingent on ChromaDex securing a court surety bond within 30 days of the final judgment in a Delaware patent infringement case against Elysium.

Why It Matters

This settlement significantly reduces ChromaDex's financial obligations, potentially improving its cash flow and profitability, provided the contingency is met.

Risk Assessment

Risk Level: medium — The settlement's benefit is contingent on securing a court surety bond, introducing uncertainty.

Key Numbers

• $3.5M — Waived Fees (Royalty and license maintenance fees waived by Dartmouth College)

Key Players & Entities

• ChromaDex Corp. (company) — Filer of the 10-Q
• Dartmouth College (company) — Party to the Settlement Agreement
• $3.5 million (dollar_amount) — Amount of waived royalty and license maintenance fees
• October [XX], 2024 (date) — Effective date of the Settlement Agreement
• Elysium (company) — Defendant in a patent infringement case

FAQ

Key Financial Figures

• $0.001 — ange on which registered Common Stock, $0.001 par value per share CDXC The Nasdaq Cap

Filing Documents

• cdcx-20240930.htm (10-Q) — 1490KB
• ex-102wrgracecotenthamendm.htm (EX-10.2) — 21KB
• cdxcex-311q32024.htm (EX-31.1) — 10KB
• cdxcex-312q32024.htm (EX-31.2) — 10KB
• cdxcex-321q32024.htm (EX-32.1) — 6KB
• cdcx-20240930_g1.jpg (GRAPHIC) — 26KB
• 0001628280-24-044540.txt ( ) — 7407KB
• cdcx-20240930.xsd (EX-101.SCH) — 46KB
• cdcx-20240930_cal.xml (EX-101.CAL) — 54KB
• cdcx-20240930_def.xml (EX-101.DEF) — 218KB
• cdcx-20240930_lab.xml (EX-101.LAB) — 567KB
• cdcx-20240930_pre.xml (EX-101.PRE) — 392KB
• cdcx-20240930_htm.xml (XML) — 1251KB

- Financial Information (unaudited)

PART I - Financial Information (unaudited) Pg.

Financial Statements (unaudited)

Item 1. Financial Statements (unaudited): 3 Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023 3 Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and September 30, 2023 4 Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2024 and September 30, 2023 5 Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and September 30, 2023 7 Notes to Condensed Consolidated Financial Statements 8

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 28

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 36

Controls and Procedures

Item 4. Controls and Procedures 36

- Other Information

PART II - Other Information

Legal Proceedings

Item 1. Legal Proceedings 36

Risk Factors

Item 1A. Risk Factors 38

Other information

Item 5. Other information 58

Exhibits

Item 6. Exhibits 59

Signatures

Signatures 60 2 Table of Contents PART I

FINANCIAL STATEMENTS (unaudited)

Item 1. FINANCIAL STATEMENTS (unaudited) ChromaDex Corporation and Subsidiaries Unaudited Condensed Consolidated Balance Sheets (In thousands except par values, unless otherwise indicated) September 30, 2024 December 31, 2023 Assets Current assets Cash and cash equivalents, including restricted cash of $ 152 for both periods presented $ 32,398 $ 27,325 Trade receivables, net of allowances of $ 90 and $ 68 , respectively; Including receivables from Related Party of $ 2.0 million and $ 2.8 million, respectively 7,096 5,234 Inventories 10,544 14,525 Prepaid expenses and other assets 2,096 2,450 Total current assets 52,134 49,534 Leasehold improvements and equipment, net 1,718 2,137 Intangible assets, net 397 510 Right-of-use assets, net 1,899 2,400 Other long-term assets 374 383 Total assets $ 56,522 $ 54,964 Liabilities and Stockholders' Equity Current liabilities Accounts payable $ 6,903 $ 10,232 Accrued expenses 9,592 9,493 Current maturities of operating lease obligations 1,008 691 Current maturities of finance lease obligations 12 11 Customer deposits 184 195 Total current liabilities 17,699 20,622 Deferred revenue 2,579 3,311 Operating lease obligations, less current maturities 1,873 2,563 Finance lease obligations, less current maturities 2 12 Total liabilities 22,153 26,508 Commitments and Contingencies (Note 10) Stockholders' Equity Common stock, $ 0.001 par value; authorized 150,000 shares; 76,027 shares and 74,981 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively 76 75 Additional paid-in capital 223,389 218,845 Accumulated deficit ( 189,089 ) ( 190,460 ) Cumulative translation adjustments ( 7 ) ( 4 ) Total stockholders' equity 34,369 28,456 Total liabilities and stockholders' equity $ 56,522 $ 54,964 See accompanying Notes to the Unaudited Condensed Consolidated Financial Statements. 3 Table of Contents ChromaDex Corporation and Subsidiaries Unaudited Condensed Consoli

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