Business Segmentation

6 Months Ended

Jun. 30, 2012

Interim Financial Statements

Note 8 .Business Segmentation [Text Block]

Since the year ended December 31, 2011, the Company has generated significant gross sales from its new retail dietary supplement product line, BluScience. As a result, the Company has begun segregating its financial results into two reportable segments.

· Core standards, contract services and ingredients segment includes supply of phytochemical reference standards, which are small quantities of plant-based compounds typically used to research an array of potential attributes, and reference materials, related contract services, and proprietary ingredients.

· Retail dietary supplement products segment which consist of the supply of the BluScience line of dietary supplement products containing our proprietary ingredients to various retail distribution channels.

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. Information about reporting segment is provided below:

Three months ended	Core Standards,			Retail
June 30, 2012	Contract Services and			Dietary Supplement
	Ingredients segment			Products segment			Other			Total
Gross Sales	$	2,202,296		$	549,101		$	—		$	2,751,397
Promotions, discounts and returns		(51,711	)		(29,075	)		—			(80,786	)
Net sales		2,150,585			520,026			—			2,670,611
Cost of sales		1,528,203			377,713			—			1,905,916
Gross profit		622,382			142,313			—			764,695
Operating expenses:
Sales and marketing		536,572			1,331,846			—			1,868,418
General and administrative		—			—			2,883,728			2,883,728
Operating expenses		536,572			1,331,846			2,883,728			4,752,146
Operating income (loss)	$	85,810		$	(1,189,533	)	$	(2,883,728	)	$	(3,987,451	)

Three months ended	Core Standards,			Retail
July 2, 2011	Contract Services and			Dietary Supplement
	Ingredients segment			Products segment			Other			Total
Gross Sales	$	1,944,353		$	—		$	—		$	1,944,353
Promotions, discounts and returns		(6,377	)		—			—			(6,377	)
Net sales		1,937,976			—			—			1,937,976
Cost of sales		1,352,371			4,687			—			1,357,058
Gross profit (loss)		585,605			(4,687	)		—			580,918
Operating expenses:
Sales and marketing		473,064			92,911			—			565,975
General and administrative		—			—			1,849,733			1,849,733
Operating expenses		473,064			92,911			1,849,733			2,415,708
Operating income (loss)	$	112,541		$	(97,598	)	$	(1,849,733	)	$	(1,834,790	)

Six months ended	Core Standards,			Retail
June 30, 2012	Contract Services and			Dietary Supplement
	Ingredients segment			Products segment			Other			Total
Gross Sales	$	4,074,014		$	2,728,527		$	—		$	6,802,541
Promotions, discounts and returns		(68,681	)		(2,278,243	)		—			(2,346,924	)
Net sales		4,005,333			450,284			—			4,455,617
Cost of sales		2,874,825			1,420,311			—			4,295,136
Gross profit (loss)		1,130,508			(970,027	)		—			160,481
Operating expenses:
Sales and marketing		1,011,516			2,715,564			—			3,727,080
General and administrative		—			—			4,845,639			4,845,639
Operating expenses		1,011,516			2,715,564			4,845,639			8,572,719
Operating income (loss)	$	118,992		$	(3,685,591	)	$	(4,845,639	)	$	(8,412,238	)

	Core Standards, Contract Services			Retail Dietary
Six months ended July 2, 2011	and Ingredients segment			Supplement Products segment			Other			Total
Gross Sales	$	4,485,933		$	-		$	-		$	4,485,933
Promotions, discounts and returns		(8,712	)		-			-			(8,712	)
Net sales		4,477,221			-			-			4,477,221
Cost of sales		2,871,220			4,687			-			2,875,907
Gross profit (loss)		1,606,001			(4,687	)		-			1,601,314
Operating expenses:
Sales and marketing		915,873			95,609			-			1,011,482
General and administrative		-			-			3,572,568			3,572,568
Operating expenses		915,873			95,609			3,572,568			4,584,050
Operating income (loss)	$	690,128		$	(100,296	)	$	(3,572,568	)	$	(2,982,736	)

	Core Standards, Contract Services		Retail Dietary
At June 30, 2012	and Ingredients segment		Supplement Products segment		Other		Total
Total assets	$	3,278,355	$	3,853,120	$	3,064,067	$	10,195,542

	Core Standards,	Retail
At December 31, 2011	Contract Services and	Dietary Supplement
	Ingredients segment	Products segment	Other	Total
Total assets	$         3,167,191	$     1,470,268	$   1,632,446	$    6,269,905