Managements Plans for Continuing Operations	9 Months Ended
Sep. 28, 2013
Managements Plans For Continuing Operations
Note 10. Managements Plans for Continuing Operations	The Company has incurred a net loss of $3,695,201 for the nine-month period ended September 28, 2013 and an operating loss of $3,671,359 for the nine-month period ended September 28, 2013. One of the factors that contributed to this loss is share-based compensation expense. The Company’s share-based compensation expense totaled $1,059,653 for the nine months ended September 28, 2013. In addition to the stock options granted to employees, the Company has awarded shares of its common stock to non-employees as compensation of the services provided. Another factor that contributed to the loss is patent related expense. The Company’s patent related expenses including maintenance expenses totaled $276,362 for the nine months ended September 28, 2013. The maintenance of the Company’s licensed patents portfolio is critical to the Company’s business model and the Company expects to continue to incur such patent related expenses. Another factor that contributed to the loss is the investment in additional personnel and marketing expenses to implement its business plan to expand the line of proprietary ingredients. This has resulted in higher selling and marketing expenses compared to prior years. Management has also implemented additional strategic operational structure changes, which it believes, will allow the Company to achieve profitability with future growth without incurring significant additional overhead costs. Management’s anticipation of future growth is largely related to the demand of the line of proprietary ingredients offered by the Company. The Company also incurred an operating loss of $192,399 from the BluScience operations. Increase in trade accounts receivable allowance for possible future returns was the main reason for the loss from the BluScience operations as the increase in allowance was treated as a reduction of revenue. Subsequent to the nine-month period ended September 28, 2013, the Company sold an aggregate of 3,529,411 shares of the Company’s common stock at a price per share of $0.85 to certain strategic accredited investors for gross proceeds of $3,000,000 or $2,980,000 after deducting offering costs. More information regarding this capital raise is set forth in Note 12 Subsequent Events. The Company anticipates the capital raised from these transactions will be sufficient to implement its current business plan through the end of December, 2014. However, if the Company determines that it shall require additional financing to further enable it to achieve its long-term strategic objectives, there can be no assurance that such financing will be available on terms favorable to it or at all. If adequate financing is not available, the Company will further delay, postpone or terminate product and service expansion and curtail certain selling, general and administrative operations. The inability to raise additional financing may have a material adverse effect on the future performance of the Company.

Managements Plans for Continuing Operations

9 Months Ended

Sep. 28, 2013

Managements Plans For Continuing Operations

Note 10. Managements Plans for Continuing Operations

The Company has incurred a net loss of $3,695,201 for the nine-month period ended September 28, 2013 and an operating loss of $3,671,359 for the nine-month period ended September 28, 2013. One of the factors that contributed to this loss is share-based compensation expense. The Company’s share-based compensation expense totaled $1,059,653 for the nine months ended September 28, 2013. In addition to the stock options granted to employees, the Company has awarded shares of its common stock to non-employees as compensation of the services provided. Another factor that contributed to the loss is patent related expense. The Company’s patent related expenses including maintenance expenses totaled $276,362 for the nine months ended September 28, 2013. The maintenance of the Company’s licensed patents portfolio is critical to the Company’s business model and the Company expects to continue to incur such patent related expenses. Another factor that contributed to the loss is the investment in additional personnel and marketing expenses to implement its business plan to expand the line of proprietary ingredients. This has resulted in higher selling and marketing expenses compared to prior years. Management has also implemented additional strategic operational structure changes, which it believes, will allow the Company to achieve profitability with future growth without incurring significant additional overhead costs. Management’s anticipation of future growth is largely related to the demand of the line of proprietary ingredients offered by the Company. The Company also incurred an operating loss of $192,399 from the BluScience operations. Increase in trade accounts receivable allowance for possible future returns was the main reason for the loss from the BluScience operations as the increase in allowance was treated as a reduction of revenue.

Subsequent to the nine-month period ended September 28, 2013, the Company sold an aggregate of 3,529,411 shares of the Company’s common stock at a price per share of $0.85 to certain strategic accredited investors for gross proceeds of $3,000,000 or $2,980,000 after deducting offering costs. More information regarding this capital raise is set forth in Note 12 Subsequent Events. The Company anticipates the capital raised from these transactions will be sufficient to implement its current business plan through the end of December, 2014. However, if the Company determines that it shall require additional financing to further enable it to achieve its long-term strategic objectives, there can be no assurance that such financing will be available on terms favorable to it or at all. If adequate financing is not available, the Company will further delay, postpone or terminate product and service expansion and curtail certain selling, general and administrative operations. The inability to raise additional financing may have a material adverse effect on the future performance of the Company.