Business Segmentation

9 Months Ended

Sep. 29, 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 the Company’s reporting segments is provided below:

	Core Standards,			Retail
	Contract Services and			Dietary Supplement
Three months ended September 29, 2012	Ingredients segment			Products segment			Other			Total
Gross Sales	$	2,039,509		$	2,672,703		$	—		$	4,712,212
Promotions, discounts and returns		(49,599	)		(1,030,369	)		—			(1,079,968	)
Net sales		1,989,910			1,642,334			—			3,632,244
Cost of sales		1,539,118			838,873			—			2,377,991
Gross profit		450,792			803,461			—			1,254,253
Operating expenses:
Sales and marketing		514,029			288,142			—			802,171
General and administrative		—			—			1,983,720			1,983,720
Operating expenses		514,029			288,142			1,983,720			2,785,891
Operating income (loss)	$	(63,237	)	$	515,319		$	(1,983,720	)	$	(1,531,638	)

	Core Standards,			Retail
	Contract Services and			Dietary Supplement
Three months ended October 1, 2011	Ingredients segment			Products segment			Other			Total
Gross Sales	$	1,827,962		$	11,311		$	—		$	1,839,273
Promotions, discounts and returns		(10,158	)		(1,547	)		—			(11,705	)
Net sales		1,817,804			9,764			—			1,827,568
Cost of sales		1,274,485			86,616			—			1,361,101
Gross profit (loss)		543,319			(76,852	)		—			466,467
Operating expenses:
Sales and marketing		390,524			259,992			—			650,516
General and administrative		—			—			2,213,636			2,213,636
Operating expenses		390,524			259,992			2,213,636			2,864,152
Operating income (loss)	$	152,795		$	(336,844	)	$	(2,213,636	)	$	(2,397,685	)

	Core Standards,			Retail
	Contract Services and			Dietary Supplement
Nine months ended September 29, 2012	Ingredients segment			Products segment			Other			Total
Gross Sales	$	6,113,523		$	5,401,230		$	—		$	11,514,753
Promotions, discounts and returns		(118,280	)		(3,308,613	)		—			(3,426,893	)
Net sales		5,995,243			2,092,617			—			8,087,860
Cost of sales		4,413,943			2,259,184			—			6,673,127
Gross profit (loss)		1,581,300			(166,567	)		—			1,414,733
Operating expenses:
Sales and marketing		1,525,545			3,003,706			—			4,529,251
General and administrative		—			—			6,829,359			6,829,359
Operating expenses		1,525,545			3,003,706			6,829,359			11,358,610
Operating income (loss)	$	55,755		$	(3,170,273	)	$	(6,829,359	)	$	(9,943,877	)

Nine months ended October 1, 2011	Core Standards, Contract Services and Ingredients segment			Retail Dietary Supplement Products segment			Other			Total
Gross Sales	$	6,313,895		$	11,311		$	—		$	6,325,206
Promotions, discounts and returns		(18,870	)		(1,547	)		—			(20,417	)
Net sales		6,295,025			9,764			—			6,304,789
Cost of sales		4,145,705			91,303			—			4,237,008
Gross profit (loss)		2,149,320			(81,539	)		—			2,067,781
Operating expenses:
Sales and marketing		1,306,397			355,601			—			1,661,998
General and administrative		—			—			5,786,204			5,786,204
Operating expenses		1,306,397			355,601			5,786,204			7,448,202
Operating income (loss)	$	842,923		$	(437,140	)	$	(5,786,204	)	$	(5,380,421	)

At September 29, 2012	Core Standards, Contract Services and Ingredients segment		Retail Dietary Supplement Products segment		Other		Total
Total assets	$	3,413,173	$	4,054,968	$	1,962,480	$	9,430,621

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