Business Segmentation

3 Months Ended

Mar. 31, 2012

Business Segmentation [Text Block]

Note 9. Business Segmentation

Since the year ended December 31, 2011, The Company has generated significant gross sales from our new retail dietary supplement product line, BluScience.  As a result, the Company has begun segregating its financial results into two reportable segments.

·   Core standards, contract services and ingredients segment includes supply of phytochemical reference standards, which are small quantities of plant-based compounds typically used to research an array of potential attributes, and reference materials, related contract services, and proprietary ingredients.

·   Retail dietary supplement products segment which consist of the supply of the BluScience line of dietary supplement products containing our proprietary ingredients to various retail distribution channels.

The “Other” classification includes corporate items not allocated by the Company to each reportable segment. Further, there are no intersegment sales that require elimination.  The Company evaluates performance and allocates resources based on reviewing gross margin by reportable segment. Information about reporting segment is provided below:

Three months ended March 31, 2012	Core Standards, Contract Services and Ingredients segment			Retail Dietary Supplement Products segment			Other			Total
Gross Sales	$	1,871,718		$	2,179,426		$	-		$	4,051,144
Promotions, discounts and returns		(16,970	)		(2,249,168	)		-			(2,266,138	)
Net sales		1,854,748			(69,742	)		-			1,785,006
Cost of sales		1,346,622			1,042,598			-			2,389,220
Gross profit (loss)		508,126			(1,112,340	)		-			(604,214	)
Operating expenses:
Sales and marketing		474,944			1,383,718			-			1,858,662
General and administrative		-			-			1,961,912			1,961,912
Operating expenses		474,944			1,383,718			1,961,912			3,820,574
Operating income (loss)	$	33,182		$	(2,496,058	)	$	(1,961,912	)	$	(4,424,788	)

Three months ended April 2, 2011	Core Standards, Contract Services and Ingredients segment			Retail Dietary Supplement Products segment			Other			Total
Gross Sales	$	2,541,580		$	-		$	-		$	2,541,580
Promotions, discounts and returns		(2,335	)		-			-			(2,335	)
Net sales		2,539,245			-			-			2,539,245
Cost of sales		1,518,850			-			-			1,518,850
Gross profit		1,020,395			-			-			1,020,395
Operating expenses:
Sales and marketing		442,809			2,698			-			445,507
General and administrative		-			-			1,722,834			1,722,834
Operating expenses		442,809			2,698			1,722,834			2,168,341
Operating income (loss)	$	577,586		$	(2,698	)	$	(1,722,834	)	$	(1,147,946	)

At March 31, 2012	Core Standards, Contract Services and Ingredients segment		Retail Dietary Supplement Products segment		Other		Total
Total assets	$	3,358,441	$	3,038,632	$	6,527,472	$	12,924,545

At December 31, 2011	Core Standards, Contract Services and Ingredients segment		Retail Dietary Supplement Products segment		Other		Total
Total assets	$	3,167,191	$	1,470,268	$	1,632,446	$	6,269,905