Nature of Business and Significant Accounting Policies

6 Months Ended

Jul. 02, 2011

Nature of Business and Significant Accounting Policies [Text Block]

Note 2. Nature of Business and Significant Accounting Policies

Nature of business :  The Company is a natural products company that provides proprietary, science-based solutions and ingredients to the dietary supplement, food and beverage, cosmetic and pharmaceutical industries. The Company supplies ingredients,  phytochemical reference standards, and related phytochemical products and services. The Company provides these products and services at various terms with payment terms of primarily net 30 days.

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. The Company's fiscal year ends on the Saturday closest to December 31, and the Company’s normal fiscal quarters end on the Saturday 13 weeks after the last fiscal year end or fiscal quarter end.  Every fifth or sixth fiscal year, the inclusion of an extra week occurs due to the Company’s floating year-end date.  The fiscal year 2014 will include 53 weeks instead of the normal 52 weeks.

Earnings per share :  P otentially dilutive common shares consist of the incremental common shares issuable upon the exercise of common stock options and warrants for all periods.   For all periods presented, the basic and diluted shares reported are equal because the common shares equivalents are anti-dilutive. Below is a tabulation of the potentially dilutive securities that were “in the money” for the periods ended July 2, 2011 and July 3, 2010.

Note 2: Earnings Per Share
	Three Months Ending				Six Months Ending
	July 2, 2011		July 3, 2010		July 2, 2011		July 3, 2010
Basic average common shares outstanding		65,001,979		43,623,403		63,973,139		36,230,810
Warrants and options in the money, net		14,532,466		18,967,838		15,183,686		17,250,610
Weighted average common shares outstanding assuming dilution		79,534,445		62,591,241		79,156,825		53,481,420

    Total warrants and options that were not “in the money” at July 2, 2011 and July 3, 2010 were 1,778,350 and 13,654,630, respectively.