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Business Segmentation and Geographical Distribution
 12 Months Ended
Jan. 02, 2016
Intangible Assets Details  
Business Segmentation and Geographical Distribution

Since the year ended December 28, 2013, the Company has generated significant revenue from its ingredients operations and has made operational changes, including changes in the organizational structure to support the ingredients operations. As a result, on December 29, 2013, the Company began segregating its financial results for ingredients operations, and has following three reportable segments.

 

•Ingredients segment develops and commercializes proprietary-based ingredient technologies and supplies these ingredients to the manufacturers of consumer products in various industries including the nutritional supplement, food and beverage and animal health industries.
•Core standards, and contract services segment includes supply of phytochemical reference standards, which are small quantities of plant-based compounds typically used to research an array of potential attributes, reference materials, and related contract services.
•Scientific and regulatory consulting segment which consist of providing scientific and regulatory consulting to the clients in the food, supplement and pharmaceutical industries to manage potential health and regulatory risks.

 

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.

 

Year ended   Core Standards and      
January 2, 2016 Ingredients Contract Services Regulatory    
  segment segment Consulting segment Other Total
           
Net sales  $      12,542,314     $              8,418,672     $               1,053,154     $                       -     $       22,014,140   
Cost of sales            6,664,164                     6,346,903                         522,065                              -              13,533,132   
           
Gross profit            5,878,150                     2,071,769                         531,089                              -                8,481,008   
           
Operating expenses:          
Sales and marketing            1,111,993                     1,201,455                           13,340                              -                2,326,788   
Research and development               891,601                                    -                                    -                              -                   891,601   
General and administrative                           -                                    -                                    -               7,416,451                7,416,451   
Operating expenses            2,003,594                     1,201,455                           13,340               7,416,451              10,634,840   
           
Operating income (loss)  $        3,874,556     $                 870,314     $                  517,749     $      (7,416,451)    $       (2,153,832)  

  

Year ended   Core Standards and      
January 3, 2015 Ingredients Contract Services Regulatory    
  segment segment Consulting segment Other Total
           
Net sales  $        6,857,177     $              7,487,189     $                  968,813     $                       -     $       15,313,179   
Cost of sales            4,257,347                     5,141,667                         588,500                              -                9,987,514   
           
Gross profit            2,599,830                     2,345,522                         380,313                              -                5,325,665   
           
Operating expenses:          
Sales and marketing            1,081,209                        975,800                           79,575                              -                2,136,584   
Research and development               513,671                                    -                                    -                              -                   513,671   
General and administrative                           -                                    -                                    -               7,860,930                7,860,930   
Loss from investment in affiliate                           -                                    -                                    -                    45,829                     45,829   
Operating expenses            1,594,880                        975,800                           79,575               7,906,759              10,557,014   
           
Operating income (loss)  $        1,004,950     $              1,369,722     $                  300,738     $      (7,906,759)    $       (5,231,349)  

 

Year ended   Core Standards and Scientific and    
December 28, 2013 Ingredients Contract Services Regulatory    
  segment segment Consulting segment Other Total
           
Net sales  $        2,430,699     $              6,643,832     $               1,146,718     $           (60,285)    $       10,160,964   
Cost of sales            1,501,187                     4,893,649                         632,037                         955                7,027,828   
           
Gross profit (loss)               929,512                     1,750,183                         514,681                  (61,240)               3,133,136   
           
Operating expenses:          
Sales and marketing               752,121                     1,459,620                           14,705                  131,159                2,357,605   
Research and development               134,040                                    -                                    -                              -                   134,040   
General and administrative                           -                                    -                                    -               4,982,976                4,982,976   
Loss from investment in affiliate                           -                                    -                                    -                    44,961                     44,961   
Operating expenses               886,161                     1,459,620                           14,705               5,159,096                7,519,582   
           
Operating income (loss)  $             43,351     $                 290,563     $                  499,976     $      (5,220,336)    $       (4,386,446)  

 

    Core Standards and Scientific and    
At January 2, 2016 Ingredients Contract Services Regulatory    
  segment segment Consulting segment Other Total
           
Total assets  $      9,105,502     $              3,306,624     $                 111,765     $       6,225,318     $     18,749,209   

 

    Core Standards and Scientific and    
At January 3, 2015 Ingredients Contract Services Regulatory    
  segment segment Consulting segment Other Total
           
Total assets  $      3,757,073     $              3,220,518     $                 105,711     $       4,433,545     $     11,516,847   

 

Revenues from international sources for the ingredients segment approximated $277,000, $35,000 and $22,000 for the years ended January 2, 2016, January 3, 2015 and December 28, 2013, respectively. Revenues from international sources for the core standards and contract services segment approximated $1,651,000, $1,756,000 and $1,488,000 for the years ended January 2, 2016, January 3, 2015 and December 28, 2013, respectively. Revenues from international sources for the scientific and regulatory consulting segment approximated $283,000, $104,000 and $450,000 for the years ended January 2, 2016, January 3, 2015 and December 28, 2013, respectively. International sources which the Company generates revenue include Europe, North America, South America, Asia, and Oceania.

 

The Company’s long-lived assets are located within the United States.

 

Disclosure of major customers

 

During the year ended January 2, 2016 Customer B in our ingredients segment accounted for 11.0% of the Company’s total sales. Customer B accounted for less than 10% of the Company’s total sales for the years ended January 3, 2015 and December 28, 2013.

 

During the year ended January 3, 2015, Customer A in our ingredients segment accounted for 10.2% of the Company’s total sales. Customer A accounted for less than 10% of the Company’s total sales for the years ended January 2, 2016 and December 28, 2013.