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Business Segments
 3 Months Ended
Apr. 01, 2017
Business Segments  
Business Segments

Since the year ended December 31, 2016, the Company has made operational changes to merge its Scientific and regulatory consulting segment into Core standards and contract services segment. Also, the newly acquired DTC operations are categorized as a part of ingredients segment.

 

As a result, the Company has the following two reportable segments:

 

·Ingredients segment develops and commercializes proprietary-based ingredient technologies and supplies these ingredients directly to consumers in finished product or as raw materials 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 (i) supply of phytochemical reference standards and (ii) analytical and chemistry based services.

 

The “Corporate and 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.

 

 

Three months ended

April 1, 2017

 

          Core Standards and              
    Ingredients     Contract Services     Corporate        
    segment     segment     and other     Total  
                         
Net sales   $ 2,084,403     $ 2,364,719     $ -     $ 4,449,122  
Cost of sales     914,767       1,781,702       -       2,696,469  
                                 
Gross profit     1,169,636       583,017       -       1,752,653  
                                 
Operating expenses:                                
Sales and marketing     305,345       290,817       -       596,162  
Research and development     664,190       -       -       664,190  
General and administrative     -       -       2,383,146       2,383,146  
Operating expenses     969,535       290,817       2,383,146       3,643,498  
                                 
Operating income (loss)   $ 200,101     $ 292,200     $ (2,383,146 )   $ (1,890,845 )

 

 

Three months ended

April 2, 2016

 

          Core Standards and              
    Ingredients     Contract Services     Corporate        
    segment     segment     and other     Total  
                         
Net sales   $ 4,600,626     $ 2,731,319     $ -     $ 7,331,945  
Cost of sales     2,099,162       1,781,364       -       3,880,526  
                                 
Gross profit     2,501,464       949,955       -       3,451,419  
                                 
Operating expenses:                                
Sales and marketing     331,743       212,979       -       544,722  
Research and development     464,072       -       -       464,072  
General and administrative     -       -       1,988,559       1,988,559  
Operating expenses     795,815       212,979       1,988,559       2,997,353  
                                 
Operating income (loss)   $ 1,705,649     $ 736,976     $ (1,988,559 )   $ 454,066  

 

At April 1, 2017

 

          Core Standards and              
    Ingredients     Contract Services     Corporate        
    segment     segment     and other     Total  
                         
Total assets   $ 14,858,562     $ 4,059,395     $ 2,133,364     $ 21,051,320  
                                 

 

 

At December 31, 2016

 

          Core Standards and              
    Ingredients     Contract Services     Corporate        
    segment     segment     and other     Total  
                         
Total assets   $ 13,257,289     $ 3,918,440     $ 2,576,339     $ 19,752,068  
                                 

 

Disclosure of major customers

 

Major customers who accounted for more than 10% of the Company’s total sales were as follows:

 

    Three months ended  
Major Customers   April 1, 2017     April 2, 2016  
             
Customer C (Ingredients segment)     *       27.4 %
                 
* Represents less than 10%.                

 

Major customers who accounted for more than 10% of the Company’s total trade receivables were as follows:

 

    Percentage of the Company's Total Trade Receivables  
Major Customers   At April 1, 2017     At December 31, 2016  
             
Customer C (Ingredients segment)     53.1 %     45.8 %
Customer D (Ingredients and Core segment)     *       10.2 %
                 
* Represents less than 10%.