Related Party Transactions

12 Months Ended

Dec. 31, 2018

Related Party Transactions [Abstract]

Related Party Transactions

Sale of consumer products

	Net sales Year ended Dec. 31, 2018	Net sales Year ended Dec. 30, 2017	Trade receivable at Dec. 31, 2018	Trade receivable at Dec. 30, 2017
A.S. Watson Group	$2.9 million	$4.1 million	$0.7 million	$1.0 million
Horizon Ventures	$0.4 million	—	—	—
Total	$3.3 million	$4.1 million	$0.7 million	$1.0 million

*A.S. Watson Group and Horizon Ventures are related parties through common ownership of an enterprise that beneficially owns more than 10% of the common stock of the Company.

Asset acquisition

On March 12, 2017, the Company acquired all of the outstanding equity interests of Healthspan from Robert Fried, Jeffrey Allen and Dr. Charles Brenner (the "Sellers"). Robert Fried is a member of the Board of Directors ("Board") of the Company, a position he has held since July 2015.

Upon the closing of, and as consideration for, the acquisition, the Company issued an aggregate of 367,648 shares of the Company’s common stock to the Sellers. The fair value of these shares was approximately $1.0 million based on the closing price of $2.72 per share on March 12, 2017. Mr. Fried continues to serve as a member of the Board and is the Chief Executive Officer of the Company.

Healthspan was formed in August 2015 to offer and sell finished bottle product TRU NIAGEN® directly to consumers through internet-based selling platforms. TRU NIAGEN® is currently the Company's leading product. Prior to the acquisition, the Company has supplied certain amount of NIAGEN® to Healthspan as a raw material inventory in exchange for a 4% equity interest in Healthspan. An additional 5% equity interest was received for granting certain exclusive rights to resell NIAGEN® prior to the total acquisition on March 12, 2017.

This transaction was accounted for as an acquisition of assets. An intangible asset of approximately $1.35 million was recorded as a result of this acquisition, which is the difference of consideration transferred and the net amount of assets acquired and liabilities assumed.

(A) Consideration transferred			(B) Net amount of assets and liabilities
	Fair value		Assets acquired	Fair value
Common Stock	$	1,000,000	Cash and cash equivalents	$	19,000
Transaction costs		178,000	Trade receivables		11,000
Previously held equity interest		20,000	Inventory		61,000
	$	1,198,000	Liabilities assumed
			Due to officer		(132,000	)
			Accounts payable		(74,000	)
			Credit card payable		(30,000	)
			Other accrued expenses		(3,000	)
Consumer product business model,
intangible asset (A) -(B)	$	1,346,000	Net assets	$	(148,000	)

The acquired intangible asset is considered to have a useful life of 10 years. The expense is amortized using the straight-line method over the useful life and the Company recognized an amortization expense of approximately $135,000 and $109,000 for the years ended December 31, 2018 and December 30, 2017, respectively.

In cancellation of a loan owed by Healthspan to Mr. Fried prior to the acquisition, the Company repaid $32,500 to Mr. Fried on March 13, 2017 and also repaid $100,000 on March 9, 2018. No interest was paid for the $100,000 repaid on March 9, 2018.