Royalties and Other Agreements - The Company has entered into various agreements that require future payments. The agreements call for future payments to a major hospital for use of their trademarks and tradenames in advertising the benefits of supplements and provides the Company access to research information owned by the hospital and provides for the hospital to perform clinical trials and to support the Company’s products. As of June 30, 2022, future annual minimum commitments under these agreements are as follows:


Remainder of 2022	$	415,000
2023		562,500
Total	$	977,500

The Company also has various royalty agreements, that are dependent on future sales. Total royalties paid during the three and six months ended June 30, 2022 were $0.1 million and $0.2 million, respectively (three and six months ended June 30, 2021—$0.2 million).

Other - In 2017, the Company received incentives totaling $0.8 million from Berkeley County, South Carolina, which includes certain performance obligations that must be met over the next seven years and maintained by the company for five years once attained. The grant agreement includes the potential for repayment of proceeds in whole or in part for failure to satisfy the performance obligations. As of June 30, 2022, the Company has satisfied the requirements and Berkeley County has not asked for repayment of these proceeds.

The Company, like other manufacturers of products that are ingested, faces an inherent risk of exposure to product liability claims if, among other things, the use of its product results in personal injury. The Company maintains product liability insurance to manage these risks. However, there can be no assurance the amount of insurance would be sufficient to cover all product liability claims.

In addition to the matter discussed below, occasionally the Company is involved in lawsuits arising in the ordinary course of its operations. The Company’s management does not expect the ultimate resolution of pending legal actions to have a material effect on the consolidated financial statements of the Company.

The Company is aware of two U.S. patents with claims relating to compositions of Nicotinamide Riboside – an ingredient contained in several of the Company’s nutritional supplement products. The two patents were issued to the Trustees of Dartmouth College and licensed to ChromaDex Corporation (ChromaDex), of Los Angeles, California. On December 1, 2020, and February 1, 2021, the Company filed separate petitions for inter partes review against the two patents - U.S. Patent No. 8,383,086 and U.S. Patent No. 8,197,807 at the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office seeking to invalidate the two patents.

On June 10, 2021, the Patent Trial and Appeal Board issued a decision granting institution of inter partes review against U.S. Patent No. 8,383,086, and on August 12, 2021, the Patent Trial and Appeal Board issued a decision granting institution of inter partes review against U.S. Patent No. 8,197,807. On May 31, 2022, the Patent Trial and Appeal Board issued a decision in which it invalidated the challenged claim in U.S. Patent No. 8,838,086. On August 2, 2022, the patent owner filed a “Patent Owner Notice of Appeal” with the U.S. Court of Appeals for the Federal Circuit. The Patent Trial and Appeal Board is expected to render a decision regarding U.S. Patent No. 8,197,807 in mid-August 2022.

On May 12, 2021, the Trustees of Dartmouth College and ChromaDex filed a complaint against the Company in the U.S. District Court for the Southern District of New York, alleging the Company’s infringement of U.S. Patent Nos. 8,383,086 and 8,197,807. The complaint seeks to enjoin the Company from selling nutritional supplement products that contain Nicotinamide Riboside and further seeks monetary damages for alleged infringement of the patents. On August 20, 2021, the trial judge in the patent infringement litigation issued an Order to Stay the litigation during the pendency of the two inter partes reviews. On September 21, 2021, the U.S. District Court for the District of Delaware issued a summary judgment holding that U.S. Patent Nos. 8,383,086 and 8,197,807 are invalid in ChromaDex, Inc. and Trustees of Dartmouth College v. Elysium Health, Inc. The Company has not recorded a loss in connection with this matter because the Company believes that a loss is currently neither probable nor estimable.