Note Receivable

3 Months Ended

Mar. 30, 2013

Receivables [Abstract]

Note 4. Note Receivable

On March 28, 2013, we entered into an asset purchase and sale agreement with NeutriSci and consummated the sale of BluScience consumer product line to NeutriSci.  As part of the sale transaction, NeutriSci issued to us a  $2,500,000 senior convertible secured note, which will be payable by NeutriSci in 6 installments of $416,667 on following dates: August 15, 2013, November 15, 2013, February 15, 2014, May 15, 2014, August 15, 2014 and November 15, 2014.  This note was discounted based on interest rates of 5.25% ~ 5.50% for a discount of $129,111 and the note was recorded at a discounted value of $2,370,889, which approximates fair value.  As of March 30, 2013, the book value of the note was $2,371,569 with a recognized interest receivable of $680. As of March 30, 2013, the current portion of note receivable with payments due in one year or less was $1,210,407 and the long-term portion of note receivable with payments due in more than one year was $1,161,162.

In the event of default, the note can be convertible into Series I Preferred Shares of NeutriSci at the option of ChromaDex.  Each Series I Preferred Share can be convertible into 4 Class A common shares of NeutriSci.  The conversion price will be (a) $4.00 per Series I Preferred Share prior to a Public Offering (as defined in the note); or (b) the closing price of Series I Preferred Share or four times the closing price of Class A common share on a stock exchange immediately prior to the conversion date.