Significant Accounting Policies

3 Months Ended

Apr. 04, 2015

Accounting Policies [Abstract]

Note 3. Significant Accounting Policies

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.    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 ended on January 3, 2015 consisted of 53 weeks. The fiscal year 2015 ending on January 2, 2016 will include the normal 52 weeks.

Changes in accounting principle: In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.  The amendments in this ASU require that debt issuance costs related to a debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts.  The recognition and measurement guidance for debt issuance costs have not changed.  For public business entities, the amendments are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years.  Early adoption of the amendments is permitted for financial statements that have not been previously issued.

The Company early adopted the amendments in this ASU effective as of April 4, 2015.  As of April 4, 2015 and January 3, 2015, the Company had unamortized debt issuance costs of $80,455 and $91,361, respectively.  The Company had previously presented the debt issuance costs as other noncurrent assets in its consolidated balance sheet as of January 3, 2015 in the Company’s Annual Report on Form 10-K filed with the Commission on March 19, 2015.  The early adoption has resulted in adjustments to the Company’s consolidated balance sheet as of January 3, 2015, by reclassifying the debt issuance costs as a direct deduction from the carrying amount of the debt liability.  Below are the effects of the change on the consolidated balance sheet as of January 3, 2015.

ChromaDex Corporation and Subsidiaries
Condensed Consolidated Balance Sheet
January 3, 2015
	Previously Reported		Adjustments			As Adjusted
Assets
Current Assets	$	9,898,691	$	-		$	9,898,691
Leasehold Improvements and Equipment, net		1,264,660		-			1,264,660
Other Noncurrent Assets		444,857		(91,361	)		353,496
Total assets	$	11,608,208	$	(91,361	)	$	11,516,847
Liabilities and Stockholders' Equity
Current Liabilities	$	4,980,820	$	-		$	4,980,820
Loan payable, less current maturities, net		2,068,474		(91,361	)		1,977,113
Capital lease obligations, less current maturities		423,015		-			423,015
Deferred rent, less current		137,508		-			137,508
Total liabilities		7,609,817		(91,361	)		7,518,456
Total stockholders' equity		3,998,391		-			3,998,391
Total liabilities and stockholders' equity	$	11,608,208	$	(91,361	)	$	11,516,847

Inventories:  Inventories are comprised of raw materials, work-in-process and finished goods.  They are stated at the lower of cost, determined by the first-in, first-out method (FIFO) method, or market.  Labor and overhead has been added to inventory that was manufactured or characterized by the Company.  The amounts of major classes of inventory as of April 4, 2015 and January 3, 2015 are as follows:

	April 4, 2015		January 3, 2015
Reference standards	$	1,718,313	$	1,760,305
Bulk ingredients		1,956,383		2,298,036
		3,674,696		4,058,341
Less valuation allowance		443,000		324,000
	$	3,231,696	$	3,734,341