Joint Venture

12 Months Ended

Dec. 31, 2024

Equity Method Investments and Joint Ventures [Abstract]

Joint Venture

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.