Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Jan. 03, 2015 | Mar. 18, 2015 | Jun. 28, 2014 | |
Document And Entity Information | |||
Entity Registrant Name | ChromaDex Corp. | ||
Entity Central Index Key | 1386570 | ||
Document Type | 10-K | ||
Document Period End Date | 3-Jan-15 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -2 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $83,626,518 | ||
Entity Common Stock, Shares Outstanding | 105,271,058 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Jan. 03, 2015 | Dec. 28, 2013 |
Current Assets | ||
Cash | $3,964,750 | $2,261,336 |
Trade receivables, less allowance for doubtful accounts and returns 2014 $38,000; 2013 $9,000 | 1,906,709 | 838,793 |
Other receivable | 215,000 | |
Inventories | 3,734,341 | 2,204,125 |
Prepaid expenses and other assets | 292,891 | 271,445 |
Total current assets | 9,898,691 | 5,790,699 |
Leasehold Improvements and Equipment, net | 1,264,660 | 1,063,239 |
Other Noncurrent Assets | ||
Deposits and other | 148,796 | 43,460 |
Long-term investment in affiliate | 1,887,844 | |
Intangible assets, net | 296,061 | 201,650 |
Total other noncurrent assets | 444,857 | 2,132,954 |
Total assets | 11,608,208 | 8,986,892 |
Current Liabilities | ||
Accounts payable | 3,451,608 | 1,440,910 |
Accrued expenses | 853,685 | 656,707 |
Current maturities of loan payable | 223,358 | |
Current maturities of capital lease obligations | 148,278 | 138,887 |
Customer deposits and other | 234,435 | 546,044 |
Deferred rent, current | 69,456 | 55,586 |
Total current liabilities | 4,980,820 | 2,838,134 |
Loan payable, less current maturities, net | 2,068,474 | |
Capital lease obligations, less current maturities | 423,015 | 280,342 |
Deferred rent, less current | 137,508 | 202,965 |
Total Liabilities | 7,609,817 | 3,321,441 |
Stockholders' Equity | ||
Common stock, $.001 par value; authorized 150,000,000 shares; issued and outstanding 2014 105,271,058 and 2013 104,524,738 shares | 105,271 | 104,525 |
Additional paid-in capital | 43,417,442 | 39,697,063 |
Accumulated deficit | -39,524,332 | -34,136,137 |
Total stockholders' equity | 3,998,391 | 5,665,451 |
Total liabilities and stockholders' equity | $11,608,208 | $8,986,892 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Jan. 03, 2015 | Dec. 28, 2013 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts and returns | $38,000 | $9,000 |
Common Stock, Par Value Per Share | $0.00 | $0.00 |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 |
Common Stock, Shares, Issued | 105,271,058 | 104,524,738 |
Common Stock, Shares, Outstanding | 105,271,058 | 104,524,738 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
Jan. 03, 2015 | Dec. 28, 2013 | |
Income Statement [Abstract] | ||
Sales, net | $15,313,179 | $10,160,964 |
Cost of sales | 9,987,514 | 7,027,828 |
Gross profit | 5,325,665 | 3,133,136 |
Operating expenses: | ||
Sales and marketing | 2,136,584 | 2,357,605 |
General and administrative | 8,374,601 | 5,117,016 |
Loss from investment in affiliate | 45,829 | 44,961 |
Operating expenses | 10,557,014 | 7,519,582 |
Operating loss | -5,231,349 | -4,386,446 |
Nonoperating income (expense): | ||
Interest income | 2,013 | 1,251 |
Interest expense | -158,849 | -34,330 |
Nonoperating expenses | -156,836 | -33,079 |
Net loss | ($5,388,185) | ($4,419,525) |
Basic and Diluted loss per common share | ($0.05) | ($0.04) |
Basic and Diluted weighted average common shares outstanding | 106,459,379 | 99,987,443 |
Consolidated_Statement_of_Stoc
Consolidated Statement of Stockholders' Equity (USD $) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance, Amount at Dec. 29, 2012 | $92,140 | $33,617,801 | ($29,716,612) | $3,993,329 |
Beginning Balance, Shares at Dec. 29, 2012 | 92,140,062 | |||
Issuance of common stock, Shares | 3,529,411 | |||
Issuance of common stock, net of offering costs, Amount | 3,529 | 2,976,471 | 2,980,000 | |
Exercise of stock options, Shares | 276,038 | |||
Exercise of stock options, Amount | 276 | 138,093 | 138,369 | |
Exercise of warrants, Shares | 7,979,227 | |||
Exercise of warrants, Amount | 7,979 | 1,630,769 | 1,638,748 | |
Share-based compensation, Shares | 600,000 | |||
Share-based compensation, Amount | 600 | 1,333,930 | 1,334,530 | |
Net loss | -4,419,525 | -4,419,525 | ||
Ending Balance, Amount at Dec. 28, 2013 | 104,525 | 39,697,063 | -34,136,137 | 5,665,451 |
Ending Balance, Shares at Dec. 28, 2013 | 104,524,738 | |||
Issuance of common stock, net of offering costs, Amount | ||||
Issuance of warrant, Amount | 246,189 | 246,189 | ||
Exercise of stock options, Shares | 534,715 | |||
Exercise of stock options, Amount | 535 | 466,614 | 467,149 | |
Issuance of unvested restricted stock, Shares | 1,186,000 | |||
Issuance of unvested restricted stock, Amount | 1,186 | 1,186 | ||
Unvested restricted stock, Shares | -1,186,000 | 1,090,000 | ||
Unvested restricted stock, Amount | -1,186 | -1,186 | ||
Share-based compensation, Shares | 85,000 | |||
Share-based compensation, Amount | 85 | 2,861,208 | 2,861,293 | |
Stock issued to settle outstanding payable balance, Shares | 126,605 | |||
Stock issued to settle outstanding payable balance, Amount | 126 | 146,368 | 146,494 | |
Net loss | -5,388,185 | -5,388,185 | ||
Ending Balance, Amount at Jan. 03, 2015 | $105,271 | $43,417,442 | ($39,524,322) | $3,998,391 |
Ending Balance, Shares at Jan. 03, 2015 | 105,271,058 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Jan. 03, 2015 | Dec. 28, 2013 | |
Cash Flows From Operating Activities | ||
Net loss | ($5,388,185) | ($4,419,525) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation of leasehold improvements and equipment | 222,721 | 246,175 |
Amortization of intangibles | 35,589 | 23,532 |
Share-based compensation expense | 2,916,924 | 1,287,917 |
Loss from disposal of equipment | 20,400 | 66,378 |
Loss from investment in affiliate | 45,829 | 44,961 |
Non-cash financing costs | 49,527 | |
Changes in operating assets and liabilities: | ||
Trade receivables | -1,067,916 | 1,118,730 |
Other receivable | 215,000 | -215,000 |
Inventories | -1,530,216 | -466,352 |
Prepaid expenses and other assets | -91,053 | -62,913 |
Accounts payable | 2,157,192 | -1,618,450 |
Accrued expenses | 196,978 | -204,891 |
Customer deposits and other | -311,609 | 235,777 |
Deferred rent | -51,587 | 57,650 |
Net cash used in operating activities | -2,580,406 | -3,906,011 |
Cash Flows From Investing Activities | ||
Purchases of leasehold improvements and equipment | -123,096 | -137,349 |
Purchases of intangible assets | -130,000 | -89,000 |
Proceeds from sale of assets | 1,000,000 | |
Proceeds from sale of equipment | 1,356 | |
Proceeds from investment in affiliate | 1,842,015 | 225,000 |
Net cash provided by investing activities | 1,590,275 | 998,651 |
Cash Flows From Financing Activities | ||
Proceeds from issuance of common stock, net of issuance costs | 2,980,000 | |
Proceeds from exercise of stock options | 467,149 | 138,369 |
Proceeds from exercise of warrants | 1,638,748 | |
Proceeds from loan payable | 2,500,000 | |
Payment of debt issuance costs | -102,866 | |
Principal payments on capital leases | -170,738 | -108,421 |
Net cash provided by financing activities | 2,693,545 | 4,648,696 |
Net increase in cash | 1,703,414 | 1,741,336 |
Cash Beginning of Year | 2,261,336 | 520,000 |
Cash Ending of Year | 3,964,750 | 2,261,336 |
Supplemental Disclosures of Cash Flow Information | ||
Cash payments for interest | 74,996 | 34,330 |
Supplemental Schedule of Noncash Investing Activity | ||
Capital lease obligation incurred for the purchase of equipment | 322,802 | 302,017 |
Retirement of fully depreciated equipment - cost | 56,110 | |
Retirement of fully depreciated equipment - accumulated depreciation | -56,110 | |
Supplemental Schedule of Noncash Operating Activity | ||
Stock issued to settle outstanding payable balance | 146,494 | |
Supplemental Schedule of Noncash Share-based Compensation | ||
Stock awards issued for services rendered in prior period | 14,560 | |
Changes in prepaid expenses associated with share-based compensation | 55,631 | 32,053 |
Warrant issued, net of offering costs | 246,189 | |
Supplemental Schedule of Noncash Activities Related to Sale of BlueScience Consumer Product Line | ||
Assets transferred | 3,526,677 | |
Liabilities transferred | 368,873 | |
Carrying value of long-term investment in affiliate, net of $1,000,000 cash proceeds | $2,157,804 |
Consolidated_Statements_of_Cas1
Consolidated Statements of Cash Flows (Parenthetical) (USD $) | 12 Months Ended | |
Jan. 03, 2015 | Dec. 28, 2013 | |
Statement of Cash Flows [Abstract] | ||
Cash proceeds | $1,000,000 |
Nature_of_Business_and_Liquidi
Nature of Business and Liquidity | 12 Months Ended |
Jan. 03, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Liquidity | Nature of business: ChromaDex Corporation and its wholly owned subsidiaries, ChromaDex, Inc., Chromadex Analytics, Inc. and Spherix Consulting, Inc. (collectively, the “Company”) are a natural products company that discovers, acquires, develops and commercializes proprietary-based ingredient technologies through its business model that utilizes its wholly owned business units, including ingredient technologies, catalog of natural product fine chemicals, chemistry and analytical testing services, and product regulatory and safety consulting services. The Company provides science-based solutions to the nutritional supplement, food and beverage, animal health, cosmetic and pharmaceutical industries. The Company acquired Spherix Consulting, Inc. on December 3, 2012, which provides scientific and regulatory consulting to the clients in the food, supplement and pharmaceutical industries to manage potential health and regulatory risks. In 2011, the Company launched its BluScience retail consumer line based on its proprietary ingredients. However, on March 28, 2013, the Company entered into an asset purchase and sale agreement with NeutriSci International Inc. and consummated the sale of BluScience consumer product line to NeutriSci. |
Liquidity: The Company has incurred a loss from operations of approximately $5.2 million and a net loss of approximately $5.4 million for the year ended January 3, 2015, and a net loss of approximately $4.4 million for the year ended December 28, 2013. As of January 3, 2015, the cash and cash equivalents totaled approximately $3,965,000. | |
On September 29, 2014, we entered into a loan and security agreement (the “Loan Agreement”) with Hercules Technology II, L.P., as lender (“Lender”) and Hercules Technology Growth Capital, Inc., as agent. Lender will provide us with access to a term loan of up to $5 million. The first $2.5 million of the term loan was funded at closing, and is repayable in installments over 30 months, following an initial interest-only period of twelve months after closing. The remaining $2.5 million of the term loan can be drawn down at our option at any time but no later than July 31, 2015. The term loan bears interest at the rate per year equal to the greater of either (i) 9.35% plus the prime rate as reported in The Wall Street Journal minus 3.25%, or (ii) 9.35%. For further details on the Loan Agreement, please refer to Note 8. Loan Payable. | |
While we anticipate that our current cash, cash equivalents and cash generated from operations and $2.5 million we can additionally draw down at our option pursuant to the Loan Agreement will be sufficient to meet our projected operating plans through at least March 20, 2016, we may require additional funds, either through additional equity or debt financings or collaborative agreements or from other sources. We have no commitments to obtain such additional financing, and we may not be able to obtain any such additional financing on terms favorable to us, or at all. If adequate financing is not available, the Company will further delay, postpone or terminate product and service expansion and curtail certain selling, general and administrative operations. The inability to raise additional financing may have a material adverse effect on the future performance of the Company. |
Significant_Accounting_Policie
Significant Accounting Policies | 12 Months Ended | ||||||||||||||||||
Jan. 03, 2015 | |||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||
Significant Accounting Policies | Significant accounting policies are as follows: | ||||||||||||||||||
Basis of presentation: The financial statements and accompanying notes have been prepared on a consolidated basis and reflect the consolidated financial position of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated from these financial statements. The Company’s fiscal year ends on the Saturday closest to December 31. The fiscal year ended January 3, 2015 (referred to as 2014) consisted of 53 weeks and the fiscal year ended December 28, 2013 (referred to as 2013) consisted of 52 weeks. Every fifth or sixth fiscal year, the inclusion of an extra week occurs due to the Company’s floating year-end date. The fiscal year 2015 will include 52 weeks. | |||||||||||||||||||
Use of accounting estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. | |||||||||||||||||||
Changes in accounting estimates: During the year ended January 3, 2015, the Company evaluated assumptions for estimating the fair value of the Company’s stock options. The Company uses the Black-Scholes based option valuation model, which requires assumptions on (i) volatility, (ii) expected dividends, (iii) expected term and (iv) risk-free rate. While evaluating the assumptions on volatility, the Company determined that the historical volatility the Company’s common stock needs to be considered when estimating the expected volatility. Previously, the Company calculated expected volatility based principally on the volatility rates of similarly situated publicly held companies, as the historical measurement period that was available to compute the volatility rate of the Company’s common stock was shorter than the expected life of the options. | |||||||||||||||||||
For stock options granted during the year ended January 3, 2015, the Company calculated expected volatility rate based on the combined volatility of publicly held companies in similar industries and volatility of the Company’s common stock. Based on the expected term of stock options, a 20~75% weight was assigned to the volatility of the Company’s common stock as the historical volatility of the Company’s common stock from June 2008 through April 2010 was exceptionally high due to a thinly traded market. Below table illustrates the Company’s historical volatility and the average daily trading volume of the Company’s common stock from June 2008 through April 2010 and from April 2010 through December 2014. | |||||||||||||||||||
Period | Volatility | Average Daily | |||||||||||||||||
Trading Volume | |||||||||||||||||||
6/20/2008 ~ 4/19/2010 | 402 | % | 11,455 | ||||||||||||||||
4/20/2010 ~ 1/2/2015 | 77 | % | 155,111 | ||||||||||||||||
The weighted average expected volatility for the stock options granted during the twelve-month period ended January 3, 2015 following the update to our estimate is approximately 75%. The weighted average expected volatility would have been approximately 30%, had we computed solely based on the volatility rates of similarly situated public companies. For the year ended December 28, 2013, the weighted average expected volatility the Company used to estimate the fair value of the Company’s stock options granted was approximately 33%. | |||||||||||||||||||
The following is a pro-forma disclosure of our historical calculation of estimated volatility over the expected term based on a grant with an expected term of 6 years: | |||||||||||||||||||
Fiscal Year 2013 | Fiscal Year 2013 | ||||||||||||||||||
Name | Use | Volatility | Name | Use | Volatility | ||||||||||||||
Covance, Inc. | 50 | % | 35 | % | ChromaDex Corp. | 20 | % | 243 | % | ||||||||||
Sigma-Aldrich Corp. | 50 | % | 30 | % | Covance Inc. | 40 | % | 35 | % | ||||||||||
Sigma-Aldrich Corp. | 40 | % | 30 | % | |||||||||||||||
Weighted Average | 33 | % | Weighted Average | 75 | % | ||||||||||||||
The change in our estimate of volatility did not result to a material additional expense to our statement of operations. | |||||||||||||||||||
Revenue recognition: The Company recognizes sales and the related cost of sales at the time the merchandise is shipped to customers or service is performed, when each of the following conditions have been met: an arrangement exists, delivery has occurred, there is a fixed price, and collectability is reasonably assured. Discounts, returns and allowances related to sales, including an estimated reserve for the returns and allowances, are recorded as reduction of revenue. | |||||||||||||||||||
Shipping and handling fees billed to customers and the cost of shipping and handling fees billed to customers are included in net sales. For the year ending in January 3, 2015, shipping and handling fees billed to customers were approximately $115,000 and the cost of shipping and handling fees billed to customers was approximately $130,000. For the year ending in December 28, 2013, shipping and handling fees billed to customers were approximately $110,000 and the cost of shipping and handling fees billed to customers was approximately $128,000. Shipping and handling fees not billed to customers are recognized as cost of sales. | |||||||||||||||||||
Taxes collected from customers and remitted to governmental authorities are excluded from revenue, which is presented on a net basis in the statement of operations. | |||||||||||||||||||
Cash concentration: The Company maintains substantially all of its cash in three different accounts in one bank. | |||||||||||||||||||
Trade accounts receivable: Trade accounts receivable are carried at original invoice amount less an estimate made for doubtful receivables based on monthly and quarterly reviews of all outstanding amounts. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Trade accounts receivable are written off when deemed uncollectible. Recoveries of trade accounts receivable previously written off are recorded when received. | |||||||||||||||||||
Other receivables: Other receivables are amounts due for payment to the Company other than the Company’s normal customer invoices for merchandise shipped or services performed. The other receivable amount as of December 28, 2013 was from a legal settlement agreement, which the settlement was reached at arbitration form a lawsuit for the violation of the Company’s trademarks. The counterparty had already remitted the payment to a third party escrow agent prior to December 28, 2013. This payment was deposited by the Company on January 14, 2014. The other receivable amount was recorded as a gain in general and administrative expenses in the statement of operations for the period ended December 28, 2013. | |||||||||||||||||||
Inventories: Inventories are comprised of raw materials, work-in-process and finished goods. They are stated at the lower of cost, determined by the first-in, first-out method (FIFO) method, or market. The inventory on the balance sheet is recorded net of valuation allowances. Labor and overhead has been added to inventory that was manufactured or characterized by the Company. The amounts of major classes of inventory for the periods ended January 3, 2015 and December 28, 2013 are as follows: | |||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Reference standards | $ | 1,760,305 | $ | 1,769,160 | |||||||||||||||
Bulk ingredients | 2,298,036 | 694,965 | |||||||||||||||||
4,058,341 | 2,464,125 | ||||||||||||||||||
Less valuation allowance | 324,000 | 260,000 | |||||||||||||||||
$ | 3,734,341 | $ | 2,204,125 | ||||||||||||||||
Our normal operating cycle for reference standards is currently longer than one year. The Company has approximately 5,000 defined standards and holds a lot of these standards as inventory in small quantities, mostly in grams and milligrams. Due to the large number of different items we carry, certain groups of these reference standards have sales frequency that is slower than others and varies greatly year to year. In addition, for certain reference standards, the cost saving is advantageous when purchased in larger quantities and we have taken advantage of such opportunities when available. Such factors have resulted in an operating cycle to be more than one year on average. The Company gains competitive advantage through the broad offering of reference standards and it is critical for the Company to continue to expand its library of reference standards it offers for the growth of business. Nevertheless, the Company has recently made changes in its reference standards inventory purchasing practice, which the management believes will result in an improved turnover rate and shorter operating cycle without impacting our competitive advantage. | |||||||||||||||||||
The Company regularly reviews inventories on hand and records a provision for slow-moving and obsolete inventory, inventory not meeting quality standards and inventory subject to expiration. The provision for slow-moving and obsolete inventory is based on current estimates of future product demand, market conditions and related management judgment. Any significant unanticipated changes in future product demand or market conditions that vary from current expectations could have an impact on the value of inventories. | |||||||||||||||||||
Intangible assets: Intangible assets include licensing rights and are accounted for based on the fair value of consideration given or the fair value of the net assets acquired, whichever is more reliable. Intangible assets with finite useful lives are amortized using the straight-line method over a period of 10 years, or, for licensed patent rights, the remaining term of the patents underlying licensing rights (considered to be the remaining useful life of the license). | |||||||||||||||||||
Leasehold improvements and equipment: Leasehold improvements and equipment are carried at cost and depreciated on the straight-line method over the lesser of the estimated useful life of each asset or lease term. Leasehold improvements and equipment are comprised of leasehold improvements, laboratory equipment, furniture and fixtures, and computer equipment. Depreciation on equipment under capital lease is included with depreciation on owned assets. Maintenance and repairs are charged to operating expenses as they are incurred. Improvements and betterments, which extend the lives of the assets, are capitalized. Useful lives of leasehold improvements and equipment for each of the category are as follows: | |||||||||||||||||||
Useful Life | |||||||||||||||||||
Leasehold improvements | Until the end of the lease term | ||||||||||||||||||
Computer equipment | 3 to 5 years | ||||||||||||||||||
Furniture and fixtures | 7 years | ||||||||||||||||||
Laboratory equipment | 10 years | ||||||||||||||||||
Long-lived assets are reviewed for impairment on a periodic basis and when changes in circumstances indicate the possibility that the carrying amount may not be recoverable. Long-lived assets are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets. If the forecast of undiscounted future cash flows is less than the carrying amount of the assets, an impairment charge would be recognized to reduce the carrying value of the assets to fair value. If a possible impairment is identified, the asset group’s fair value is measured relying primarily on a discounted cash flow methodology. | |||||||||||||||||||
Long-term investment in affiliate: The Company accounts for its investment in affiliate under the equity method. The Company records equity method adjustments in gains (losses) on equity method investments, net, and may do so with up to a three-month lag, pending on the timely availability of financial information of the investee. Equity method adjustments include: our proportionate share of investee income or loss, gains or losses resulting from investee capital transactions, and other adjustments required by the equity method. The long-term investment in affiliate is subject to a periodic impairment review and is considered to be impaired when a decline in carrying value is judged to be other-than-temporary. Evidence of a loss in value might include (i) absence of an ability to recover the carrying amount of the investment or (ii) inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. | |||||||||||||||||||
Customer deposits and other: Customer deposits and other represent either (i) cash received from customers in advance of product shipment or delivery of services; or (ii) cash received from government as research grants, which the Company has yet to complete the research activities. | |||||||||||||||||||
The cash received from government as research grants is recognized as a liability until the research is performed. Other than a nominal management fee, which the Company is entitled to earn when the research is performed, the research activities related to the grants are excluded from revenue and are presented on a net basis in the statement of operations. | |||||||||||||||||||
Income taxes: Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. | |||||||||||||||||||
The Company has not recorded a reserve for any tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company files tax returns in all appropriate jurisdictions, which include a federal tax return and various state tax returns. Open tax years for these jurisdictions are 2011 to 2014, which statutes expire in 2015 to 2018, respectively. When and if applicable, potential interest and penalty costs are accrued as incurred, with expenses recognized in general and administrative expenses in the statements of operations. As of January 3, 2015, the Company has no liability for unrecognized tax benefits. | |||||||||||||||||||
Research and development costs: Research and development costs consist of direct and indirect costs associated with the development of the Company’s technologies. These costs are expensed as incurred. Research and development costs for the periods ended January 3, 2015 and December 28, 2013 were approximately $514,000 and $134,000, respectively. | |||||||||||||||||||
Advertising: The Company expenses the production costs of advertising the first time the advertising takes place. Advertising expense for the periods ended January 3, 2015 and December 28, 2013 were approximately $171,000 and $355,000, respectively. | |||||||||||||||||||
Share-based compensation: The Company has an Equity Incentive Plan under which the Board of Directors may grant restricted stock or stock options to employees and non-employees. For employees, share-based compensation cost is recorded for all option grants and awards of non-vested stock based on the grant date fair value of the award, and is recognized over the period the employee is required to provide services for the award. For non-employees, share-based compensation cost is recorded for all option grants and awards of non-vested stock and is remeasured over the vesting term as earned. The expense is recognized over the period the non-employee is required to provide services for the award. | |||||||||||||||||||
The Company recognizes compensation expense over the requisite service period using the straight-line method for option grants without performance conditions. For stock options that have both service and performance conditions, the Company recognizes compensation expense using the graded attribution method. Compensation expense for stock options with performance conditions is recognized only for those awards expected to vest. | |||||||||||||||||||
From time to time, the Company awards shares of its common stock to non-employees for services provided or to be provided. The fair value of the awards are measured either based on the fair market value of stock at the date of grant or the value of the services provided, based on which is more reliably measureable. Since these stock awards are fully vested and non-forfeitable, upon issuance the measurement date for the award is usually reached on the date of the award. | |||||||||||||||||||
Fair Value Measurement: The Company follows the provisions of the accounting standard which defines fair value, establishes a framework for measuring fair value and enhances fair value measurement disclosure. Under these provisions, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. | |||||||||||||||||||
The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is described below: | |||||||||||||||||||
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |||||||||||||||||||
Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. | |||||||||||||||||||
Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. | |||||||||||||||||||
Financial instruments: The estimated fair value of financial instruments has been determined based on the Company’s assessment of available market information and appropriate valuation methodologies. The Company’s financial instruments that are included in current assets and current liabilities are recorded at cost in the consolidated balance sheets. The estimated fair value of these financial instruments approximates their carrying value due to their short-term nature. | |||||||||||||||||||
The carrying amounts reported in the balance sheet for capital lease obligations are present values of the obligations, excluding the interest portion. Capital lease obligations with maturities less than one year are classified as current liabilities. | |||||||||||||||||||
The carrying amounts reported in the balance sheet for loan payable are present values net of discount, excluding the interest portion. The carrying value of long-term portion of the loan payable approximates fair value because the Company’s interest rate yield based on the credit rating of the Company is believed to be near current market rates. The long-term portion of the Company’s loan payable is considered a Level 3 liability within the fair value hierarchy. Loan payable with maturities less than one year are classified as current liabilities. | |||||||||||||||||||
Recent accounting standards: In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for us in our first quarter of fiscal 2018 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements. | |||||||||||||||||||
In August 2014, the FASB issued ASU 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this ASU provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for public and nonpublic entities for annual periods ending after December 15, 2016. Early adoption is permitted. On September 27, 2014, the Company early adopted ASU 2014-15. The adoption of ASU 2014-15 had no impacts on the Company’s consolidated financial statements. |
Loss_Per_Share_Applicable_to_C
Loss Per Share Applicable to Common Stockholders | 12 Months Ended | ||||||||
Jan. 03, 2015 | |||||||||
Earnings Per Share [Abstract] | |||||||||
Loss Per Share Applicable to Common Stockholders | The following table sets forth the computations of loss per share amounts applicable to common stockholders for the year ended January 3, 2015 and December 28, 2013. | ||||||||
Years Ended | |||||||||
2014 | 2013 | ||||||||
Net loss | $ | (5,388,185 | ) | $ | (4,419,525 | ) | |||
Basic and diluted loss per common share | $ | (0.05 | ) | $ | (0.04 | ) | |||
Weighted average common shares outstanding (1): | 106,459,379 | 99,987,443 | |||||||
Potentially dilutive securities (2): | |||||||||
Stock options | 13,974,052 | 13,160,955 | |||||||
Warrants | 469,020 | - | |||||||
Convertible Debt | 773,395 | - | |||||||
(1) Includes 1,623,186 and 500,000 weighted average nonvested shares of restricted stock for the year 2014 and 2013, respectively, which are participating securities that feature voting and dividend rights. | |||||||||
(2) Excluded from the computation of loss per share as their impact is antidilutive. |
Investment_in_Affiliate
Investment in Affiliate | 12 Months Ended | ||||||||
Jan. 03, 2015 | |||||||||
Investment In Affiliate | |||||||||
Investment in Affiliate | During the year ended December 28, 2013, the Company entered into an asset purchase and sale agreement with NeutriSci International Inc. (“NeutriSci”) and consummated the sale of BluScience consumer product line to NeutriSci. The Company used the cost recovery method to account the sale transaction, which was estimated at approximately $3,157,804. The consideration received consisted of following: (a) a $1,000,000 cash payment; (b) a $2,500,000 senior convertible secured note (convertible into 625,000 shares Series I Preferred Stock); and (c) 669,708 shares of Series I Preferred Shares that are convertible into 2,678,832 Class “A” common shares of NeutriSci, representing an aggregate of 19% of the NeutriSci shares at the date of the transaction. | ||||||||
The Company had previously applied the equity method of accounting due to a significant influence that it had obtained from the financial instruments noted above, and the carrying value, which includes the Senior Note, was reflected as long-term investment in affiliate in the Company’s consolidated balance sheet at the date of transaction. The initial carrying value of this investment recognized at the date of transaction was $2,157,804, which is the Company’s unrecovered cost or the difference between the net assets transferred to NeutriSci and the initial monetary consideration received. The 669,708 shares of Series I Preferred Shares and the senior convertible secured note were accounted for as one long-term investment in NeutriSci. Under the cost recovery method, no gain on the sale is recognized until the Company’s cost basis in the net assets transferred has been recovered. | |||||||||
During the year ended December 28, 2013, the Company received a partial payment of $225,000 for the first installment repayment that was due under the Senior Note. | |||||||||
Sale of Senior Secured Convertible Note | |||||||||
On December 30, 2013, the Company assigned the Senior Note to an unrelated third party for $1,250,000. $2,275,000 remained outstanding on the Senior Note at the date of the assignment. The Company also paid legal fees of $7,500 out of the proceeds of the purchase price. The Company also agreed to transfer to the third party a number of shares of preferred stock of NeutriSci having a value of $500,000 upon the consummation by NeutriSci of any action resulting in the shares of its common stock being listed on an exchange. There was no recourse provision to the Company associated with the assignment of the note. In connection with the assignment of the note, the Company paid Palladium Capital Advisors, LLC (“Palladium”), a placement agent, a cash fee of $150,000 and agreed to transfer to Palladium a number of shares of preferred stock of NeutriSci having a value of $50,000 upon the consummation by NeutriSci of any action resulting in the shares of its common stock being listed on an exchange. The net proceeds received from the assignment of the Senior Note have been charged against the carrying value of the long-term investment in affiliate. | |||||||||
Sale and Transfer of Preferred Shares | |||||||||
On December 1, 2014, NeutriSci consummated its reverse merger with Disani Capital Corporation and became listed on Toronto Stock Exchange, TSX Venture Exchange. Immediately prior to NeutriSci’s listing, the Company transferred 108,676 and 10,868 Series I Preferred Shares of NeutriSci to the unrelated third party and Palladium, respectively, pursuant to the terms of the assignment of the Senior Note. In addition, the Company sold the remaining 551,114 Series I Preferred Shares to another unrelated third party for $749,515. The Company recorded a loss of $24,286 as the carrying value prior to these transactions was $773,801. As of January 3, 2015, the Company does not have any investments in NeutriSci. | |||||||||
Loss of Significant Influence | |||||||||
As a result of the assignment of the Senior Note described above, the Company no longer had a significant influence on NeutriSci as of December 30, 2013. As a result, the Company discontinued applying equity method of accounting and applied cost method of accounting from December 30, 2013. The adjusted carrying amount as of December 30, 2013 became the new cost figure for the investment and no retrospective adjustments to the financial statements have been made. The Company had elected to record equity method adjustments in losses on the investment in NeutriSci, with a three-month lag, as the financial information of NeutriSci was not available in a timely manner. The equity method adjustment for the previously unaccounted NeutriSci’s operations from October 1, 2013 to December 31, 2013 was recorded during the year ended January 3, 2015, and was incorporated into the adjusted carrying amount of the investment. | |||||||||
Sales, gross profit, net loss of NeutriSci for the six months ended September 30, 2013 and the three months ended December 31, 2013 are as follows: | |||||||||
Six Months Ended | Three Months Ended | ||||||||
30-Sep-13 | 31-Dec-13 | ||||||||
Sales | $ | 36,451 | $ | 60,575 | |||||
Gross profit | 13,310 | 33,619 | |||||||
Net loss | $ | (813,212 | ) | $ | (435,208 | ) | |||
Changes in carrying value and the Company ownership percentage since the inception are summarized as follows: | |||||||||
Carrying | Ownership | ||||||||
Value | Percentage | ||||||||
At March 28, 2013 | $ | 2,157,804 | 5.7 | % | |||||
Company's share of NeutriSci's loss | |||||||||
through September 30, 2013 | (44,961 | ) | |||||||
Proceeds from investment in affiliate | (225,000 | ) | |||||||
At December 28, 2013 | 1,887,844 | 4.9 | % | ||||||
Company's share of NeutriSci's loss | |||||||||
for the three-month period ended December 31, 2013; | |||||||||
previously not recognized due to a three-month lag | (21,543 | ) | |||||||
Proceeds from assignment of the Senior Note | (1,092,500 | ) | |||||||
Proceeds from sale and transfer of the Preferred Shares | (749,515 | ) | |||||||
Loss from investment in affiliate | (24,286 | ) | |||||||
At January 3, 2015 | $ | - | 0 | % |
Intangible_Assets
Intangible Assets | 12 Months Ended | ||||||||||||||||
Jan. 03, 2015 | |||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||
Intangible Assets | Intangible assets consisted of the following: | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Gross Carrying | Accumulated | Gross Carrying | Accumulated | ||||||||||||||
Amount | Amortization | Amount | Amortization | ||||||||||||||
Amortized intangible assets: | |||||||||||||||||
License agreements and other | $ | 1,205,275 | $ | 909,224 | $ | 1,075,285 | $ | 873,635 | |||||||||
Amortization expense on amortizable intangible assets included in the consolidated statement of operations for the year ended January 3, 2015 and December 28, 2013 was approximately $36,000 and $24,000, respectively. The unamortized expense is expected to be recognized over a weighted average period of 7.3 years as of January 3, 2015. | |||||||||||||||||
Estimated aggregate amortization expense for each of the next five years is as follows: | |||||||||||||||||
Years ending December: | |||||||||||||||||
2015 | $ | 40,000 | |||||||||||||||
2016 | 40,000 | ||||||||||||||||
2017 | 40,000 | ||||||||||||||||
2018 | 36,000 | ||||||||||||||||
2019 | 33,000 | ||||||||||||||||
Thereafter | 107,000 | ||||||||||||||||
$ | 296,000 | ||||||||||||||||
Leasehold_Improvements_and_Equ
Leasehold Improvements and Equipment | 12 Months Ended | ||||||||
Jan. 03, 2015 | |||||||||
Leasehold Improvements And Equipment | |||||||||
Leasehold Improvements and Equipment | Leasehold improvements and equipment consisted of the following: | ||||||||
2014 | 2013 | ||||||||
Laboratory equipment | $ | 3,151,748 | $ | 2,782,364 | |||||
Leasehold improvements | 495,240 | 491,125 | |||||||
Computer equipment | 329,737 | 372,851 | |||||||
Furniture and fixtures | 13,039 | 18,313 | |||||||
Office equipment | 7,877 | 7,877 | |||||||
Construction in progress | 68,141 | 40,126 | |||||||
4,065,782 | 3,712,656 | ||||||||
Less accumulated depreciation | 2,801,122 | 2,649,417 | |||||||
$ | 1,264,660 | $ | 1,063,239 | ||||||
Depreciation expense on leasehold improvements and equipment included in the consolidated statement of operations for the year ended January 3, 2015 and December 28, 2013 was approximately $223,000 and $246,000, respectively. | |||||||||
The Company leases equipment under capitalized lease obligations with a total cost of $1,073,601 and $695,461 and accumulated amortization of $242,887 and $136,358 as of January 3, 2015 and December 28, 2013, respectively. | |||||||||
During the year ended January 3, 2015, the Company disposed of approximately $56,000 of fully depreciated equipment. |
Capitalized_Lease_Obligations
Capitalized Lease Obligations | 12 Months Ended | ||||
Jan. 03, 2015 | |||||
Capitalized Lease Obligations | |||||
Capitalized Lease Obligations | Minimum future lease payments under capital leases as of January 3, 2015, are as follows: | ||||
Year ending December: | |||||
2015 | $ | 191,454 | |||
2016 | 178,563 | ||||
2017 | 157,713 | ||||
2018 | 108,860 | ||||
2019 | 33,884 | ||||
Total minimum lease payments | 670,474 | ||||
Less amount representing interest at a rate of approximately 8.8% per year | 99,181 | ||||
Present value of net minimum lease payments | 571,293 | ||||
Less current portion | 148,278 | ||||
Long-term obligations under capital leases | $ | 423,015 | |||
Interest expense related to capital leases was approximately $47,000 and $34,000 for the years ended January 3, 2015 and December 28, 2013, respectively. | |||||
Subsequent to January 3, 2015, the Company entered into a financing transaction to purchase laboratory equipment. Under the lease terms, the Company will make monthly lease payments, including interest, of approximately $7,000 for 48 months, for a total payment of approximately $356,000. The Company will record a capital lease of approximately $304,000. The equipment will be utilized in our core standards and contract services segment. |
Loan_Payable
Loan Payable | 12 Months Ended | ||||
Jan. 03, 2015 | |||||
Debt Disclosure [Abstract] | |||||
Loan Payable | |||||
On September 29, 2014, the Company entered into a loan and security agreement (the “Loan Agreement”) with Hercules Technology II, L.P., as lender (“Lender”) and Hercules Technology Growth Capital, Inc., as agent. Lender will provide us with access to a term loan of up to $5 million. The first $2.5 million of the term loan was funded at closing, and is repayable in equal monthly installments of principal and interest (mortgage style) over 30 months, following an initial interest-only period of twelve months after closing. The remaining $2.5 million of the term loan can be drawn down at our option at any time but no later than July 31, 2015. In connection with the loan, the Company paid a $50,000 facility charge to Lender and recorded as debt issuance cost. | |||||
The term loan bears interest at the rate per year equal to the greater of either (i) 9.35% plus the prime rate as reported in The Wall Street Journal minus 3.25%, or (ii) 9.35%. The Company may prepay all, but no less than all, of the outstanding loan balance, subject to prepayment charges of 3% during the first twelve months following closing, 2% during the next twelve months and 1% thereafter. On the earliest to occur of the (a) the loan maturity date, (b) the date the Company prepays the outstanding loan balance or (c) the date the outstanding loan balance becomes due and payable, the Company will pay Lender an end of term charge equal to 3.75% of all amounts drawn under the loan. | |||||
The Loan Agreement further provides that, subject to certain conditions, any regularly scheduled installment of principal due to Lender may be paid, in whole or in part at the option of the Company or Lender, by converting a portion of the principal of the term loan into shares of the Company’s common stock (the “Conversion Shares”) at a conversion price of $1.293, in lieu of payment in cash. The aggregate principal amount to be paid in Conversion Shares shall not exceed $1,000,000. Of this amount 50% shall convert at the Lender’s option and 50% shall convert at the Company’s option. | |||||
Pursuant to the Loan Agreement, the Company issued Lender a warrant (the “Warrant”) to purchase 419,020 shares of our common stock at an exercise price of $1.062 per share, subject to customary anti-dilution provisions. The Warrant is exercisable and expires five years from the date of issuance. | |||||
In connection with the Loan Agreement, the Company granted first priority liens and security interest in substantially all of our assets, exclusive of intellectual property and 35% of the capital stock of any foreign subsidiary, as collateral for the obligations under the Loan Agreement. The Loan Agreement also contains representations and warranties by the Company and Lender, indemnification provisions in favor of Lender and customary covenants, and events of default. Upon the occurrence of an event of default, a default interest rate of an additional 4% will be applied to the outstanding loan balances, and Lender may terminate its lending commitment, declare all outstanding obligations immediately due and payable, and take such other actions as set forth in the Loan Agreement. We are currently in compliance with all loan covenants. | |||||
Debt Issuance Costs and End of Term Charge | |||||
The Company incurred debt issuance costs of $102,866 in connection with this term loan. The debt issuance costs are being amortized as interest expense using the effective interest method over the term of the loan. Amortization of debt issuance costs was $11,505 for the year ended January 3, 2015 and the remaining unamortized debt issuance costs of $91,361 are included in other noncurrent assets. In addition, the Company will pay an end of term charge of $93,750, which is 3.75% of the $2.5 million drawn under the loan. The end of term charge is being accrued as additional interest expense using the effective interest rate method over the term of the loan. The Company accrued $10,486 of this fee during the year ended January 3, 2015. | |||||
Warrant Issued to Lender | |||||
The Company determined the Warrant issued to Lender to be equity classified. The Company estimated the fair value of this Warrant as of the issuance date using a Black-Scholes option pricing model with the following assumptions: | |||||
29-Sep-14 | |||||
Fair value of common stock | $ | 1.08 | |||
Volatility | 72.4 | % | |||
Expected dividends | 0 | % | |||
Contractual term | 5.0 years | ||||
Risk-free rate | 1.76 | % | |||
The Company utilized this fair value in its allocation of the loan proceeds between loan payable and the Warrant which was performed on a relative fair value basis. The fair value of the Warrant to purchase 419,020 shares of our common stock was approximately $273,081. Ultimately, the Company allocated $246,189 to the Warrant and recognized this amount in additional paid in capital. Accordingly, this amount is recognized as a debt discount and is being amortized as interest expense using the effective interest method over the term of the loan. Amortization of this debt discount was $27,535 for the year ended January 3, 2015. | |||||
Loan payable as of January 3, 2015 consists of the following: | |||||
Principal amount payable for following years ending December | |||||
2015 | $ | 223,358 | |||
2016 | 867,247 | ||||
2017 | 1,035,995 | ||||
2018 | 373,400 | ||||
Total principal payments | 2,500,000 | ||||
Accrued end of term charge | 10,486 | ||||
Total loan payable | 2,510,486 | ||||
Less unamortized debt discount | 218,654 | ||||
Less current portion | 223,358 | ||||
Loan payable – long term | $ | 2,068,474 | |||
The total interest expenses related the term loan, including cash interest payments, the amortizations of debt issuance costs and debt discount, and the accrual of end of term charge were approximately $112,000 for the year ended January 3, 2015. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||
Jan. 03, 2015 | |||||||||
Income Taxes | |||||||||
Income Taxes | At January 3, 2015 and December 28, 2013, the Company maintained a full valuation allowance against the entire deferred income tax balance which resulted in an effective tax rate of zero for 2014 and 2013. The valuation allowance increased by $2,308,000 as of January 3, 2015. | ||||||||
A reconciliation of income taxes computed at the statutory Federal income tax rate to income taxes as reflected in the financial statements is summarized as follows: | |||||||||
2014 | 2013 | ||||||||
Federal income tax expense at statutory rate | (34.0 | )% | (34.0 | )% | |||||
State income tax, net of federal benefit | (5.3 | )% | (4.3 | )% | |||||
Permanent differences | 2.7 | % | 2.6 | % | |||||
Change in tax rates | (6.1 | )% | (3.7 | )% | |||||
Change in valuation allowance | 42.8 | % | 39.2 | % | |||||
Other | (0.1 | )% | 0.2 | % | |||||
Effective tax rate | 0 | % | 0 | % | |||||
The deferred income tax assets and liabilities consisted of the following components as of January 3, 2015 and December 28, 2013: | |||||||||
2014 | 2013 | ||||||||
Deferred tax assets: | |||||||||
Net operating loss carryforward | $ | 11,401,000 | $ | 8,953,000 | |||||
Stock options and restricted stock | 2,934,000 | 1,945,000 | |||||||
Investment in affiliate related to BluScience transaction | - | 1,187,000 | |||||||
Inventory reserve | 226,000 | 100,000 | |||||||
Allowance for doubtful accounts | 15,000 | 3,000 | |||||||
Accrued expenses | 125,000 | 100,000 | |||||||
Deferred revenue | 4,000 | 64,000 | |||||||
Intangibles | 26,000 | 36,000 | |||||||
Deferred rent | 81,000 | 99,000 | |||||||
14,812,000 | 12,487,000 | ||||||||
Less valuation allowance | 14,669,000 | 12,361,000 | |||||||
143,000 | 126,000 | ||||||||
Deferred tax liabilities: | |||||||||
Leasehold improvements and equipment | (108,000 | ) | (100,000 | ) | |||||
Prepaid expenses | (35,000 | ) | (26,000 | ) | |||||
(143,000 | ) | (126,000 | ) | ||||||
$ | - | $ | - | ||||||
The Company has tax net operating loss carryforwards and other tax attributes available to offset future federal taxable income and future state taxable income of approximately $28,956,000 and $29,092,000, respectively which begin to expire in the year ending December 31, 2023 and 2015, respectively. The net operating loss can be carried forward up to 20 years for federal tax returns and from 5 to 20 years for various state tax returns. Under the Internal Revenue Code, certain ownership changes may subject the Company to annual limitations on the utilization of its net operating loss carryforward. The Company will continue to analyze the potential impact of any additional transactions undertaken upon the utilization of the net operating losses on a go forward basis. | |||||||||
The Company has not identified any uncertain tax positions requiring a reserve as of January 3, 2015 and December 28, 2013. | |||||||||
Employee_ShareBased_Compensati
Employee Share-Based Compensation | 12 Months Ended | ||||||||||||||||
Jan. 03, 2015 | |||||||||||||||||
Employee Share-based Compensation | |||||||||||||||||
Employee Equity Incentive Plan | Stock Option Plans | ||||||||||||||||
At the discretion of the Company’s compensation committee (the “Compensation Committee”), and with the approval of the Company’s board of directors (the “Board of Directors”), the Company may grant options to purchase the Company’s common stock to certain individuals from time to time. Management and the Compensation Committee determine the terms of awards which include the exercise price, vesting conditions and expiration dates at the time of grant. Expiration dates for stock options are not to exceed 10 years from their date of issuance. The Company, under its Second Amended and Restated 2007 Equity Incentive Plan, is authorized to issue stock options that total no more than 20% of the shares of common stock issued and outstanding, as determined on a fully diluted basis. Beginning in 2007, stock options were no longer issuable under the Company’s 2000 Non-Qualified Incentive Stock Plan. The remaining amount available for issuance under the Second Amended and Restated 2007 Equity Incentive Plan totaled 4,738,496 at January 3, 2015. The stock option awards generally vest ratably over a four-year period following grant date after a passage of time. However, some stock option awards are performance based and vest based on the achievement of certain criteria established by the Compensation Committee, subject to approval by the Board of Directors. | |||||||||||||||||
The fair value of the Company’s stock options was estimated at the date of grant using the Black-Scholes based option valuation model. The table below outlines the weighted average assumptions for options granted to employees during the years ended January 3, 2015 and December 28, 2013. | |||||||||||||||||
Year Ended December | 2014 | 2013 | |||||||||||||||
Expected Volatility | 74.63 | % | 32.75 | % | |||||||||||||
Expected dividends | 0 | % | 0 | % | |||||||||||||
Expected term | 5.76 years | 6.0 years | |||||||||||||||
Risk-free rate | 1.86 | % | 1.51 | % | |||||||||||||
Prior to the year 2014, the Company calculated expected volatility from the volatility of publicly held companies in similar industries, as the historical volatility of the Company’s common stock did not cover the period equal to the expected life of the options. For the stock options granted during the year ended January 3, 2015, the Company calculated expected volatility rate based principally on the combined volatility of similarly situated publicly held companies. Based on the expected term of stock options, a 20~75% weight was assigned to the volatility of the Company common stock as the historical volatility of the Company’s common stock from June 2008 through April 2010 was exceptionally high due to a thinly traded market. Below table illustrates the Company’s historical volatility and the average daily trading volume of the Company’s common stock from June 2008 through April 2010 and from April 2010 through December 2014. | |||||||||||||||||
Period | Volatility | Average Daily | |||||||||||||||
Trading Volume | |||||||||||||||||
6/20/2008 ~ 4/19/2010 | 402 | % | 11,455 | ||||||||||||||
4/20/2010 ~ 1/2/2015 | 77 | % | 155,111 | ||||||||||||||
The dividend yield assumption is based on the Company’s history and expectation of future dividend payouts on the common stock. The risk-free interest rate is based on the implied yield available on U.S. treasury zero-coupon issues with an equivalent remaining term. For the expected term, the Company used SEC Staff Accounting Bulletin No. 107 simplified method since most of the options granted were “plain vanilla” options with following characteristics: (i) the share options are granted at the market price on the grant date; (ii) exercisability is conditional on performing service through the vesting date on most options; (iii) If an employee terminates service prior to vesting, the employee would forfeit the share options; (iv) if an employee terminates service after vesting, the employee would have 30 days to exercise the share options; and (v) the share options are nontransferable and nonhedgeable. | |||||||||||||||||
1) Service Period Based Stock Options | |||||||||||||||||
The majority of options granted by the Company are comprised of service based options granted to employees. These options vest ratably over a defined period following grant date after a passage of a service period. | |||||||||||||||||
The following table summarizes service period based stock options activity at January 3, 2015 and changes during the year then ended: | |||||||||||||||||
Weighted Average | |||||||||||||||||
Remaining | Aggregate | ||||||||||||||||
Number of | Exercise | Contractual | Intrinsic | ||||||||||||||
Shares | Price | Term | Value | ||||||||||||||
Outstanding at December 28, 2013 | 12,113,655 | $ | 1.06 | 7.43 | |||||||||||||
Options Granted | 2,233,987 | 1.39 | 10 | ||||||||||||||
Options Classification from Employee to Non-Employee | (113,151 | ) | 0.76 | ||||||||||||||
Options Exercised | (534,715 | ) | 0.87 | ||||||||||||||
Options Expired | (253,900 | ) | 1 | ||||||||||||||
Options Forfeited | (722,275 | ) | 1.13 | ||||||||||||||
Outstanding at January 3, 2015 | 12,723,601 | $ | 1.13 | 7 | $ | 581,050 | |||||||||||
Exercisable at January 3, 2015 | 9,362,374 | $ | 1.13 | 6.4 | $ | 455,570 | |||||||||||
The aggregate intrinsic values in the table above are based on the Company’s closing stock price of $0.90 on the last day of business for the year ended January 3, 2015. The weighted average fair value of options granted during the years ended January 3, 2015, and December 28, 2013 was $0.90, and $0.29 respectively. The aggregate intrinsic value for options exercised during the years ended January 3, 2015, and December 28, 2013 was approximately $156,000 and $7,000 respectively. | |||||||||||||||||
2) Performance Based Stock Options | |||||||||||||||||
The Company also grants stock option awards that are performance based and vest based on the achievement of certain criteria established from time to time by the Compensation Committee. If these performance criteria are not met, the compensation expenses are not recognized and the expenses that have been recognized will be reversed. | |||||||||||||||||
The following table summarizes performance based stock options activity at January 3, 2015 and changes during the year then ended: | |||||||||||||||||
Weighted Average | |||||||||||||||||
Remaining | Aggregate | ||||||||||||||||
Number of | Exercise | Contractual | Intrinsic | ||||||||||||||
Shares | Price | Term | Value | ||||||||||||||
Outstanding at December 28, 2013 | 200,000 | $ | 0.63 | 9.08 | |||||||||||||
Options Granted | - | - | |||||||||||||||
Options Exercised | - | - | |||||||||||||||
Options Expired | - | - | |||||||||||||||
Options Forfeited | - | - | |||||||||||||||
Outstanding at January 3, 2015 | 200,000 | $ | 0.63 | 8.08 | $ | 54,000 | |||||||||||
Exercisable at January 3, 2015 | 95,833 | $ | 0.63 | 8.08 | $ | 25,875 | |||||||||||
The aggregate intrinsic value in the table above are, based on the Company’s closing stock price of $0.90 on the last day of business for the period ended January 3, 2015. | |||||||||||||||||
As of January 3, 2015, there was approximately $1,768,000 of total unrecognized compensation expense related to non-vested share-based compensation arrangements granted under the plans for employee stock options. That cost is expected to be recognized over a weighted average period of 2.20 years. The realized tax benefit from stock options for the years ended January 3, 2015, and December 28, 2013 was $0, based on the Company’s election of the “with and without” approach. | |||||||||||||||||
Restricted Stock Awards | |||||||||||||||||
Restricted stock awards granted by the Company to employees have vesting conditions that are unique to each award. | |||||||||||||||||
The following table summarizes activity of restricted stock awards granted to employees at January 3, 2015 and changes during the year then ended: | |||||||||||||||||
Weighted Average | |||||||||||||||||
Award-Date | |||||||||||||||||
Shares | Fair Value | ||||||||||||||||
Unvested shares at December 28, 2013 | 500,000 | $ | 0.69 | ||||||||||||||
Granted | 1,090,000 | 1.41 | |||||||||||||||
Vested | - | - | |||||||||||||||
Forfeited | - | - | |||||||||||||||
Unvested shares at January 3, 2015 | 1,590,000 | $ | 1.18 | ||||||||||||||
Expected to Vest as of January 3, 2015 | 1,590,000 | $ | 1.18 | ||||||||||||||
On January 2, 2014, the Company awarded an aggregate of 1,090,000 shares of restricted stock to the Company’s officers and members of the board of directors. These shares shall vest upon the earlier to occur of the following: (i) the market price of the Company’s stock exceeds a certain price, or (ii) one of other certain triggering events, including the termination of the officers and members of the board of directors without cause for any reason. The fair values of these restricted stock awards were $1,536,900 in aggregate, and they were based on the trading price of the Company’s common stock on the date of grant. The expense related to the restricted stock award has been amortized over the period of six months through July 1, 2014, as the Company determined the requisite service period to be 6 months as that is when they are eligible to vest. | |||||||||||||||||
Employee Option and Restricted Stock Compensation | |||||||||||||||||
The Company recognized share-based compensation expense of approximately $2,747,000 and $958,000 in general and administrative expenses in the statement of operations for the year ended January 3, 2015 and December 28, 2013. |
NonEmployee_ShareBased_Compens
Non-Employee Share-Based Compensation | 12 Months Ended | ||||||||||||||||
Jan. 03, 2015 | |||||||||||||||||
Non-employee Share-based Compensation | |||||||||||||||||
Non-Employee Share-Based Compensation [Text Block] | Stock Option Plan | ||||||||||||||||
At the discretion of management, working with the Compensation Committee, and with approval of the Board of Directors, the Company may grant options to purchase the Company’s common stock to certain individuals from time to time who are not employees of the Company. These options are granted under the Second Amended and Restated 2007 Equity Incentive Plan of the Company and are granted on the same terms as those being issued to employees. Stock options granted to non-employees are accounted for using the fair value approach. The fair value of non-employee option grants are estimated using the Black-Scholes option-pricing model and are re-measured over the vesting term until earned. The estimated fair value is expensed over the applicable service period. | |||||||||||||||||
The following table summarizes activity of stock options granted to non-employees at January 3, 2015 and changes during the year then ended: | |||||||||||||||||
Weighted Average | |||||||||||||||||
Remaining | Aggregate | ||||||||||||||||
Number of | Exercise | Contractual | Intrinsic | ||||||||||||||
Shares | Price | Term | Value | ||||||||||||||
Outstanding at December 28, 2013 | 847,300 | $ | 1.44 | 5.74 | |||||||||||||
Options Granted | 90,000 | 1.24 | 10 | ||||||||||||||
Options Classification from Employe to Non-Employee | 113,151 | 0.76 | |||||||||||||||
Options Exercised | - | - | |||||||||||||||
Options Forfeited | - | - | |||||||||||||||
Outstanding at January 3, 2015 | 1,050,451 | $ | 1.35 | 5.46 | $ | 37,550 | |||||||||||
Exercisable at January 3, 2015 | 971,701 | $ | 1.36 | 5.12 | $ | 37,550 | |||||||||||
The aggregate intrinsic values in the table above are, based on the Company’s closing stock price of $0.90 on the last day of business for the year ended January 3, 2015. The aggregate intrinsic value for options exercised during the year ended December 28, 2013 was $35,000. | |||||||||||||||||
As of January 3, 2015, there was approximately $44,000 of total unrecognized compensation expense related to non-vested share-based compensation arrangements granted under the plan for non-employee stock options. The unrecognized compensation expense is expected to be recognized over a weighted average period of 1.7 years. | |||||||||||||||||
Stock Awards | |||||||||||||||||
On July 1, 2014, the Company awarded 65,000 shares of the Company’s common stock that were fully vested and non-forfeitable to a non-employee. The fair value of the award, which amounted to $83,850 was based on the trading price of the Company’s stock on the date of grant. The expense related to this stock award is being amortized over the period of approximately 7 months, as the services relating to this award are being provided over this period of time. In addition, there were stock awards made in 2013, which the Company has recognized a portion of the expense in 2014 as the required service periods extended into 2014. The total expense the Company recognized for stock awards to non-employees was approximately $129,000 for the twelve months ended January 3, 2015. During the twelve months ended December 28, 2013, the Company awarded an aggregate of 600,000 shares and recognized a total expense of approximately $325,000. | |||||||||||||||||
As of January 3, 2015, there was approximately $11,000 of total unrecognized compensation expense related to the stock award to a non-employee. That cost is expected to be recognized over a period of approximately one month. | |||||||||||||||||
Warrant Awards | |||||||||||||||||
On October 27, 2014, the Company awarded a warrant to purchase 50,000 shares of the Company’s common stock to a certain non-employee. The exercise price of the warrant was $1.10 per share and the term of the warrant was 2 years. The fair value of the warrant was estimated at the date of award using the Black-Scholes based valuation model. The table below outlines the assumptions for the warrant granted. | |||||||||||||||||
27-Oct-14 | |||||||||||||||||
Volatility | 66.9 | % | |||||||||||||||
Expected dividends | 0 | % | |||||||||||||||
Contractual term | 2.0 years | ||||||||||||||||
Risk-free rate | 0.41 | % | |||||||||||||||
The Company calculated expected volatility from the historical volatility of Company’s common stock. The dividend yield assumption is based on the Company’s history and expectation of future dividend payouts on the common stock. The risk-free interest rate is based on the implied yield available on U.S. treasury zero-coupon issues with an equivalent remaining term. The expected term of the warrants represents the contractual terms. For the year ended January 3, 2015, the expense the Company recognized for this warrant award was approximately $6,000. As of January 3, 2015, there was approximately $10,000 of total unrecognized compensation expense related to this warrant, expected to be recognized over a period of approximately 4 months. | |||||||||||||||||
During the year ended December 28, 2013, the Company recognized an expense of approximately $4,000 for the warrant that was previously awarded to a certain non-employee on August 7, 2012. On December 9, 2013, the warrant was exercised and the Company issued 74,186 shares of common stock. The non-employee who held the warrant elected a cashless exercise pursuant to the provisions of the warrant and received 74,186 shares of common stock in lieu of 250,000 shares for a cash payment of $0.75 per share. The intrinsic value of the warrant exercised was $90,507. | |||||||||||||||||
Restricted Stock Award | |||||||||||||||||
Restricted stock awards granted by the Company to non-employees generally feature time vesting service conditions, specified in the respective service agreements. Restricted stock awards issued to non-employees are accounted for at current fair value through the vesting period. The fair value of vested non-employee restricted shares awarded during the twelve months ended January 3, 2015 was approximately $24,000, which represents the market value of the Company’s common stock on respective vesting dates charged to expense. | |||||||||||||||||
The following table summarizes activity of restricted stock awards issued to non-employees at January 3, 2015 and changes during the year then ended: | |||||||||||||||||
Weighted Average | |||||||||||||||||
Shares | Fair Value | ||||||||||||||||
Unvested shares at December 28, 2013 | - | $ | - | ||||||||||||||
Granted | 96,000 | 1.3 | |||||||||||||||
Vested | (20,000 | ) | 1.17 | ||||||||||||||
Forfeited | - | - | |||||||||||||||
Unvested shares expected to vest at January 3, 2015 | 76,000 | $ | 0.9 | ||||||||||||||
As of January 3, 2015, there was approximately $68,000 of total unrecognized compensation expense related to the restricted stock award to a non-employee. That cost is expected to be recognized over a period of 3.2 years as of January 3, 2015. | |||||||||||||||||
Non-Employee Option, Stock, Warrant and Restricted Stock Awards | |||||||||||||||||
For non-employee share-based compensation, the Company recognized share-based compensation expense of approximately $170,000 and $330,000 in general and administrative expenses in the statement of operations for the year ended January 3, 2015 and December 28, 2013. |
Stock_Issuance
Stock Issuance | 12 Months Ended |
Jan. 03, 2015 | |
Stock Issuance | |
Stock Issuance | On June 11, 2014, the Company issued 44,605 shares of common stock to a vendor to settle an outstanding payable balance of $52,188. |
On June 18, 2014, the Company issued 82,000 shares of common stock to a vendor to settle an outstanding payable balance of $76,306 and payment of 6 months of $3,000 per month monthly retainer fees from July 2014 through December 2014. | |
In Fiscal Year 2013, the Company sold approximately 3.5 million shares with gross proceeds of approximately $3.0 million to two strategic accredited investors pursuant to a subscription agreement. A total placement agent fee of $20,000 was incurred in connection with the investments. |
Warrants
Warrants | 12 Months Ended | ||||||||||||||
Jan. 03, 2015 | |||||||||||||||
FairValueAssumptionsRiskFreeInterestRateStockIssuance | |||||||||||||||
Warrants | The following table summarizes activity of warrants at January 3, 2015 and December 28, 2013 and changes during the years then ended: | ||||||||||||||
Weighted Average | |||||||||||||||
Remaining | Aggregate | ||||||||||||||
Number of | Exercise | Contractual | Intrinsic | ||||||||||||
Shares | Price | Term | Value | ||||||||||||
Outstanding at December 29, 2012 | 10,056,914 | $ | 0.72 | 0.44 | |||||||||||
Warrants Issued | |||||||||||||||
Warrants Exercised | (8,338,564 | ) | 0.25 | ||||||||||||
Warrants Expired | (1,718,350 | ) | 3 | ||||||||||||
Outstanding at December 28, 2013 | - | - | |||||||||||||
Warrants Issued | 469,020 | 1.07 | 4.68 | ||||||||||||
Warrants Exercised | - | - | |||||||||||||
Warrants Expired | - | - | |||||||||||||
Outstanding and exercisable at January 3, 2015 | 469,020 | $ | 1.07 | 4.43 | $ | - | |||||||||
The aggregate intrinsic values in the table above are based on the Company’s closing stock price of $0.90 on the last day of business for the year ended January 3, 2015. | |||||||||||||||
On September 29, 2014, the Company issued Hercules Technology II, L.P. a warrant to purchase 419,020 shares of the Company’s common stock at an exercise price of $1.062 per share pursuant to the Loan Agreement. This warrant has not been exercised as of January 3, 2015. | |||||||||||||||
On October 27, 2014, the Company awarded a certain non-employee a warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $1.10 per share. This warrant has not been exercised as of January 3, 2015. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Jan. 03, 2015 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Commitments and Contingencies | Lease | ||||
The Company leases its office and research facilities in California, Colorado and Maryland under operating lease agreements that expire at various dates from August 2015 through September 2019. Monthly lease payments range from $1,320 per month to $22,788 per month, and minimum lease payments escalate during the terms of the leases. Generally accepted accounting principles require total minimum lease payments to be recognized as rent expense on a straight-line basis over the term of the lease. The excess of such expense over amounts required to be paid under the lease agreement is carried as a liability on the Company’s consolidated balance sheet. | |||||
Minimum future rental payments under all of the leases are as follows: | |||||
Fiscal years ending: | |||||
2015 | $ | 544,000 | |||
2016 | 319,000 | ||||
2017 | 225,000 | ||||
2018 | 233,000 | ||||
2019 | 181,000 | ||||
$ | 1,502,000 | ||||
Rent expense was approximately $537,000, and $519,000 for the years ended January 3, 2015 and December 28, 2013, respectively. | |||||
Royalty | |||||
The Company has 10 licensing agreements with leading research universities, pursuant to which the Company acquired patents related to certain products the Company offers to its customers. These agreements afford for future royalty payments based on contractual minimums and expire at various dates from December 31, 2019 through April 12, 2032. Yearly minimum royalty payments including license maintenance fees range from $5,000 per year to $50,000 per year, however, these minimum payments escalate each year with a maximum of $150,000 per year. In addition, the Company is required to pay a range of 2% to 5% of sales related to the licensed products under these agreements. Total royalty expense including license maintenance fees from continuing operations for the year ended January 3, 2015 and December 28, 2013 was approximately $323,000 and $111,000, respectively under these agreements. Minimum royalties including license maintenance fees for the next five years are as follows: | |||||
Fiscal years ending: | |||||
2015 | $ | 272,000 | |||
2016 | 283,000 | ||||
2017 | 320,000 | ||||
2018 | 338,000 | ||||
2019 | 339,000 | ||||
$ | 1,552,000 | ||||
Legal proceedings | |||||
The Company from time to time is involved in legal proceedings in the ordinary course of our business, which can include employment claims, product claims and patent infringements. We do not believe that any of these claims and proceedings against us as they arise are likely to have, individually or in the aggregate, a material adverse effect on our financial condition or results of operations. | |||||
Severance payments to executive officers | |||||
As of January 3, 2015, the Company has three executive officers, Frank Jaksch, Jr., Chief Executive Officer, Thomas Varvaro, Chief Financial Officer and Troy A. Rhonemus, Chief Executive Officer. Upon termination, Mr. Jaksch, Mr. Varvaro and Mr. Rhonemus will receive severance payments per the terms of the respective employment agreements entered with the Company. The key terms of the employment agreements, including the severance terms are as follows: | |||||
Employment Agreement with Frank L. Jaksch Jr. | |||||
On April 19, 2010, the Company entered into an Amended and Restated Employment Agreement (the “Amended Jaksch Agreement”) with Frank L. Jaksch Jr. The Amended Jaksch Agreement has a three year term, beginning on the date of the Agreement that automatically renews unless the Amended Jaksch Agreement is terminated in accordance with its terms. On January 2, 2014, the Board approved the recommendations of the Company’s Compensation Committee raising the annual base salary of Mr. Jaksch to $275,000 per year and raising the annual cash bonus target for Mr. Jaksch up to 50% of his base salary. | |||||
The severance terms of the Amended Jaksch Agreement provide that in the event Mr. Jaksch’s employment with the Company is terminated voluntarily by Mr. Jaksch, he will be entitled to any accrued but unpaid base salary, any stock vested through the date of his termination and a pro-rated portion of 50% of his salary (50% of his salary being the “Maximum Annual Bonus”) for the year of termination. In addition, if Mr. Jaksch leaves the Company for “Good Reason”, (as defined in the Amended Jaksch Agreement), he will also be entitled to severance equal to the Maximum Annual Bonus, and he will be deemed to have been employed for the entirety of such year. Severance will then consist of 16 weeks of paid salary, unless Mr. Jaksch signs a release, in which case he will receive compensation equal to the lesser of the remainder of the term of the agreement, or up to 12 months paid salary. | |||||
In the event the Company terminates Mr. Jaksch’s employment “without Cause” (as defined in the Amended Jaksch Agreement), Mr. Jaksch will be entitled to severance in the form of any stock vested through the date of his termination and continuation of his base salary for a period of eight weeks, or, if Mr. Jaksch enters into a standard separation agreement, Mr. Jaksch will receive continuation of base salary and health benefits, together with applicable fringe benefits as provided to other executive employees until the last to occur of the expiration of the term or renewal term then in effect or 24 months from the date of termination (the “Severance Period”), and he will receive his Maximum Annual Bonus if the Severance Period is equal to 24 months or a pro rata portion thereof if less, as well as the full vesting of any otherwise unvested stock. | |||||
Employment Agreement with Thomas C. Varvaro | |||||
On April 19, 2010, the Company entered into an Amended and Restated Employment Agreement (the “Amended Varvaro Agreement”) with Thomas C. Varvaro. The Amended Varvaro Agreement has a three year term beginning on the date of the agreement that automatically renews unless the Amended Varvaro Agreement is terminated in accordance with its terms. On January 2, 2014, the Board approved the recommendations of the Company’s Compensation Committee raising the annual base salary of Mr. Varvaro to $225,000 per year and raising the annual cash bonus target for Mr. Varvaro up to 40% of his base salary. | |||||
The severance terms of the Amended Varvaro Agreement provide that in the event Mr. Varvaro’s employment with us is terminated voluntarily by Mr. Varvaro he will be entitled to any accrued but unpaid base salary, any stock vested through the date of his termination and a pro-rated portion of 40% of his salary (40% of this salary being the “Maximum Annual Bonus”) for the year of termination. In addition, if Mr. Varvaro leaves the Company for “Good Reason” (as defined in the Amended Varvaro Agreement), he will also be entitled to severance equal to the Maximum Annual Bonus, and he shall be deemed to have been employed for the entirety of such year. Severance will then consist of 16 weeks of paid salary, unless Mr. Varvaro signs a release, in which case he will receive compensation equal to the lesser of the remainder of his agreement or 12 months paid salary. | |||||
In the event the Company terminates Mr. Varvaro’s employment “without Cause,” Mr. Varvaro will be entitled to severance in the form of any stock vested through the date of his termination and continuation of his base salary for a period of eight weeks, or, if Mr. Varvaro enters into a standard separation agreement, Mr. Varvaro will receive continuation of base salary and health benefits, together with applicable fringe benefits as provided to other executive employees until the last to occur of the expiration of the term or renewal term then in effect or 24 months from the date of termination (the “Severance Period”), will receive his Maximum Annual Bonus if the Severance Period is equal to 24 months or a pro rata portion thereof if less, as well as the full vesting of any otherwise unvested stock. | |||||
Employment Agreement with Troy A. Rhonemus | |||||
On March 6, 2014, the Company entered into an Employment Agreement (the “Rhonemus Agreement”) with Mr. Troy Rhonemus pursuant to which Mr. Rhonemus was appointed to serve as the Chief Operating Officer of the Company. The Rhonemus Agreement provides for a base salary of $180,000, and provides for an annual cash bonus (based on performance targets) of up to 30% of his base salary (30% of this salary being the “Maximum Annual Bonus”), and provides for option grants of 250,000 shares of Common Stock. The option grants were awarded on February 21, 2014 at an exercise price of $1.75 per share, which vest 33% one year from the date of grant with the remainder vesting in 24 equal monthly installments thereafter. | |||||
Upon termination, Mr. Rhonemus will be entitled to any accrued but unpaid base salary and any accrued but unpaid welfare and retirement benefits up to the termination date. In addition, if Mr. Rhonemus leaves the Company for “Good Reason” (as defined in the Rhonemus Agreement), he will also be entitled to severance equal to two weeks of base salary for each full year of service to a maximum of eight weeks of the base salary. | |||||
In the event the Company terminates Mr. Rhonemus’ employment “without Cause,” Mr. Rhonemus will be entitled to severance equal to two weeks of base salary for each full year of service to a maximum of eight weeks of the base salary, or, if Mr. Rhonemus enters into a standard separation agreement, Mr. Rhonemus will receive continuation of base salary and health benefits, together with applicable fringe benefits as provided until the expiration of the term or renewal term then in effect, however, that in the case of medical and dental insurance, until the expiration of 12 months from the date of termination. |
Business_Segmentation_and_Geog
Business Segmentation and Geographical Distribution | 12 Months Ended | ||||||||||||||||||||
Jan. 03, 2015 | |||||||||||||||||||||
Business Segmentation And Geographical Distribution | |||||||||||||||||||||
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. | ||||||||||||||||||||
· | 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. | ||||||||||||||||||||
· | 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. | ||||||||||||||||||||
· | 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 | Ingredients | Regulatory | Other | Total | ||||||||||||||||
3-Jan-15 | Contract Services | segment | Consulting segment | ||||||||||||||||||
segment | |||||||||||||||||||||
Net sales | $ | 7,487,189 | $ | 6,857,177 | $ | 968,813 | $ | - | $ | 15,313,179 | |||||||||||
Cost of sales | 5,141,667 | 4,257,347 | 588,500 | - | 9,987,514 | ||||||||||||||||
Gross profit | 2,345,522 | 2,599,830 | 380,313 | - | 5,325,665 | ||||||||||||||||
Operating expenses: | |||||||||||||||||||||
Sales and marketing | 975,800 | 1,081,209 | 79,575 | - | 2,136,584 | ||||||||||||||||
General and administrative | - | - | - | 8,374,601 | 8,374,601 | ||||||||||||||||
Loss from investment in affiliate | - | - | - | 45,829 | 45,829 | ||||||||||||||||
Operating expenses | 975,800 | 1,081,209 | 79,575 | 8,420,430 | 10,557,014 | ||||||||||||||||
Operating income (loss) | $ | 1,369,722 | $ | 1,518,621 | $ | 300,738 | $ | (8,420,430 | ) | $ | (5,231,349 | ) | |||||||||
Year ended | Core Standards and | Ingredients | Scientific and | Other | Total | ||||||||||||||||
28-Dec-13 | Contract | segment | Regulatory | ||||||||||||||||||
Services | Consulting segment | ||||||||||||||||||||
segment | |||||||||||||||||||||
Net sales | $ | 6,643,832 | $ | 2,430,699 | $ | 1,146,718 | $ | (60,285 | ) | $ | 10,160,964 | ||||||||||
Cost of sales | 4,893,649 | 1,501,187 | 632,037 | 955 | 7,027,828 | ||||||||||||||||
Gross profit (loss) | 1,750,183 | 929,512 | 514,681 | (61,240 | ) | 3,133,136 | |||||||||||||||
Operating expenses: | |||||||||||||||||||||
Sales and marketing | 1,459,620 | 752,121 | 14,705 | 131,159 | 2,357,605 | ||||||||||||||||
General and administrative | - | - | - | 5,117,016 | 5,117,016 | ||||||||||||||||
Loss from investment in affiliate | - | - | - | 44,961 | 44,961 | ||||||||||||||||
Operating expenses | 1,459,620 | 752,121 | 14,705 | 5,293,136 | 7,519,582 | ||||||||||||||||
Operating income (loss) | $ | 290,563 | $ | 177,391 | $ | 499,976 | $ | (5,354,376 | ) | $ | (4,386,446 | ) | |||||||||
At January 3, 2015 | Core Standards and | IngrediEnts | Scientific and | Other | Total | ||||||||||||||||
Contract Services | segment | Regulatory | |||||||||||||||||||
segment | Consulting | ||||||||||||||||||||
segment | |||||||||||||||||||||
Total assets | $ | 3,220,518 | $ | 3,757,073 | $ | 105,711 | $ | 4,524,906 | $ | 11,608,208 | |||||||||||
At December 28, 2013 | Core Standards and | Ingredients | Scientific and | Other | Total | ||||||||||||||||
Contract | segment | Regulatory | |||||||||||||||||||
Services | Consulting segment | ||||||||||||||||||||
segment | |||||||||||||||||||||
Total assets | $ | 2,952,270 | $ | 1,083,856 | $ | 139,765 | $ | 4,811,001 | $ | 8,986,892 | |||||||||||
Revenue from international sources for the core standards and contract services segment approximated $1,756,000 and $1,488,000 for the years ended January 3, 2015 and December 28, 2013, respectively. Revenues from international sources for the ingredients segment approximated $35,000 and $22,000 for the years ended January 3, 2015 and December 28, 2013, respectively. Revenues from international sources for the scientific and regulatory consulting segment approximated $104,000 and $450,000 for the years ended 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. |
Subsequent_Events
Subsequent Events | 12 Months Ended | ||
Jan. 03, 2015 | |||
Subsequent Events [Abstract] | |||
Subsequent Events | On January 28, 2015, the Company awarded 350,000 shares of common stock to consultants for certain investor relations services to be provided. | ||
On February 25, 2015, the Board of Directors (the “Board”) appointed Stephen Allen, a current Board member, to serve as Chairman of the Board. Mr. Allen remained on the Board’s Compensation Committee and chairperson of the Board’s Nominating and Corporate Governance Committee. | |||
Also on February 25, 2015, Michael Brauser and Barry Honig, who were Co-Chairmen of the Board of Directors (the “Board”) of the Company, resigned from the Board. Mr. Brauser’s and Mr. Honig’s resignations were not a result of any disagreements with the Company’s operations, policies or practices. At the time of resignation, Mr. Brauser and Mr. Honig held following unvested securities of the Company: | |||
· | Michael Brauser – 26,667 stock options at an exercise price of $1.25 per share; 250,000 shares of restricted stock. | ||
· | Barry Honig – 26,667 stock options at an exercise price of $1.25 per share; 250,000 shares of restricted stock. | ||
The Board made a resolution that above unvested securities are immediately vested on the date of resignation. In addition, the Board made a resolution that all stock options held by Mr. Brauser and Mr. Honig will expire in accordance with their terms as if Mr. Brauser and Mr. Honig remained directors of the Company. | |||
Significant_Accounting_Policie1
Significant Accounting Policies (Policy) | 12 Months Ended | ||||||||||||||||||
Jan. 03, 2015 | |||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||
Basis of presentation | Basis of presentation: The financial statements and accompanying notes have been prepared on a consolidated basis and reflect the consolidated financial position of the Company and its wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated from these financial statements. The Company’s fiscal year ends on the Saturday closest to December 31. The fiscal year ended January 3, 2015 (referred to as 2014) consisted of 53 weeks and the fiscal year ended December 28, 2013 (referred to as 2013) consisted of 52 weeks. Every fifth or sixth fiscal year, the inclusion of an extra week occurs due to the Company’s floating year-end date. The fiscal year 2015 will include 52 weeks. | ||||||||||||||||||
Use of and Changes in Accounting estimates | Use of accounting estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. | ||||||||||||||||||
Changes in accounting estimates: During the year ended January 3, 2015, the Company evaluated assumptions for estimating the fair value of the Company’s stock options. The Company uses the Black-Scholes based option valuation model, which requires assumptions on (i) volatility, (ii) expected dividends, (iii) expected term and (iv) risk-free rate. While evaluating the assumptions on volatility, the Company determined that the historical volatility the Company’s common stock needs to be considered when estimating the expected volatility. Previously, the Company calculated expected volatility based principally on the volatility rates of similarly situated publicly held companies, as the historical measurement period that was available to compute the volatility rate of the Company’s common stock was shorter than the expected life of the options. | |||||||||||||||||||
For stock options granted during the year ended January 3, 2015, the Company calculated expected volatility rate based on the combined volatility of publicly held companies in similar industries and volatility of the Company’s common stock. Based on the expected term of stock options, a 20~75% weight was assigned to the volatility of the Company’s common stock as the historical volatility of the Company’s common stock from June 2008 through April 2010 was exceptionally high due to a thinly traded market. Below table illustrates the Company’s historical volatility and the average daily trading volume of the Company’s common stock from June 2008 through April 2010 and from April 2010 through December 2014. | |||||||||||||||||||
Period | Volatility | Average Daily | |||||||||||||||||
Trading Volume | |||||||||||||||||||
6/20/2008 ~ 4/19/2010 | 402 | % | 11,455 | ||||||||||||||||
4/20/2010 ~ 1/2/2015 | 77 | % | 155,111 | ||||||||||||||||
The weighted average expected volatility for the stock options granted during the twelve-month period ended January 3, 2015 following the update to our estimate is approximately 75%. The weighted average expected volatility would have been approximately 30%, had we computed solely based on the volatility rates of similarly situated public companies. For the year ended December 28, 2013, the weighted average expected volatility the Company used to estimate the fair value of the Company’s stock options granted was approximately 33%. | |||||||||||||||||||
The following is a pro-forma disclosure of our historical calculation of estimated volatility over the expected term based on a grant with an expected term of 6 years: | |||||||||||||||||||
Fiscal Year 2013 | Fiscal Year 2013 | ||||||||||||||||||
Name | Use | Volatility | Name | Use | Volatility | ||||||||||||||
Covance, Inc. | 50 | % | 35 | % | ChromaDex Corp. | 20 | % | 243 | % | ||||||||||
Sigma-Aldrich Corp. | 50 | % | 30 | % | Covance Inc. | 40 | % | 35 | % | ||||||||||
Sigma-Aldrich Corp. | 40 | % | 30 | % | |||||||||||||||
Weighted Average | 33 | % | Weighted Average | 75 | % | ||||||||||||||
The change in our estimate of volatility did not result to a material additional expense to our statement of operations. | |||||||||||||||||||
Revenue recognition | Revenue recognition: The Company recognizes sales and the related cost of sales at the time the merchandise is shipped to customers or service is performed, when each of the following conditions have been met: an arrangement exists, delivery has occurred, there is a fixed price, and collectability is reasonably assured. Discounts, returns and allowances related to sales, including an estimated reserve for the returns and allowances, are recorded as reduction of revenue. | ||||||||||||||||||
Shipping and handling fees billed to customers and the cost of shipping and handling fees billed to customers are included in net sales. For the year ending in January 3, 2015, shipping and handling fees billed to customers were approximately $115,000 and the cost of shipping and handling fees billed to customers was approximately $130,000. For the year ending in December 28, 2013, shipping and handling fees billed to customers were approximately $110,000 and the cost of shipping and handling fees billed to customers was approximately $128,000. Shipping and handling fees not billed to customers are recognized as cost of sales. | |||||||||||||||||||
Taxes collected from customers and remitted to governmental authorities are excluded from revenue, which is presented on a net basis in the statement of operations. | |||||||||||||||||||
Cash concentration | Cash concentration: The Company maintains substantially all of its cash in three different accounts in one bank. | ||||||||||||||||||
Trade accounts receivable | Trade accounts receivable: Trade accounts receivable are carried at original invoice amount less an estimate made for doubtful receivables based on monthly and quarterly reviews of all outstanding amounts. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Trade accounts receivable are written off when deemed uncollectible. Recoveries of trade accounts receivable previously written off are recorded when received. | ||||||||||||||||||
Other receivables | Other receivables: Other receivables are amounts due for payment to the Company other than the Company’s normal customer invoices for merchandise shipped or services performed. The other receivable amount as of December 28, 2013 was from a legal settlement agreement, which the settlement was reached at arbitration form a lawsuit for the violation of the Company’s trademarks. The counterparty had already remitted the payment to a third party escrow agent prior to December 28, 2013. This payment was deposited by the Company on January 14, 2014. The other receivable amount was recorded as a gain in general and administrative expenses in the statement of operations for the period ended December 28, 2013. | ||||||||||||||||||
Inventories | Inventories: Inventories are comprised of raw materials, work-in-process and finished goods. They are stated at the lower of cost, determined by the first-in, first-out method (FIFO) method, or market. The inventory on the balance sheet is recorded net of valuation allowances. Labor and overhead has been added to inventory that was manufactured or characterized by the Company. The amounts of major classes of inventory for the periods ended January 3, 2015 and December 28, 2013 are as follows: | ||||||||||||||||||
2014 | 2013 | ||||||||||||||||||
Reference standards | $ | 1,760,305 | $ | 1,769,160 | |||||||||||||||
Bulk ingredients | 2,298,036 | 694,965 | |||||||||||||||||
4,058,341 | 2,464,125 | ||||||||||||||||||
Less valuation allowance | 324,000 | 260,000 | |||||||||||||||||
$ | 3,734,341 | $ | 2,204,125 | ||||||||||||||||
Our normal operating cycle for reference standards is currently longer than one year. The Company has approximately 5,000 defined standards and holds a lot of these standards as inventory in small quantities, mostly in grams and milligrams. Due to the large number of different items we carry, certain groups of these reference standards have sales frequency that is slower than others and varies greatly year to year. In addition, for certain reference standards, the cost saving is advantageous when purchased in larger quantities and we have taken advantage of such opportunities when available. Such factors have resulted in an operating cycle to be more than one year on average. The Company gains competitive advantage through the broad offering of reference standards and it is critical for the Company to continue to expand its library of reference standards it offers for the growth of business. Nevertheless, the Company has recently made changes in its reference standards inventory purchasing practice, which the management believes will result in an improved turnover rate and shorter operating cycle without impacting our competitive advantage. | |||||||||||||||||||
The Company regularly reviews inventories on hand and records a provision for slow-moving and obsolete inventory, inventory not meeting quality standards and inventory subject to expiration. The provision for slow-moving and obsolete inventory is based on current estimates of future product demand, market conditions and related management judgment. Any significant unanticipated changes in future product demand or market conditions that vary from current expectations could have an impact on the value of inventories. | |||||||||||||||||||
Intangible assets | Intangible assets: Intangible assets include licensing rights and are accounted for based on the fair value of consideration given or the fair value of the net assets acquired, whichever is more reliable. Intangible assets with finite useful lives are amortized using the straight-line method over a period of 10 years, or, for licensed patent rights, the remaining term of the patents underlying licensing rights (considered to be the remaining useful life of the license). | ||||||||||||||||||
Leasehold improvements and equipment | Leasehold improvements and equipment: Leasehold improvements and equipment are carried at cost and depreciated on the straight-line method over the lesser of the estimated useful life of each asset or lease term. Leasehold improvements and equipment are comprised of leasehold improvements, laboratory equipment, furniture and fixtures, and computer equipment. Depreciation on equipment under capital lease is included with depreciation on owned assets. Maintenance and repairs are charged to operating expenses as they are incurred. Improvements and betterments, which extend the lives of the assets, are capitalized. Useful lives of leasehold improvements and equipment for each of the category are as follows: | ||||||||||||||||||
Useful Life | |||||||||||||||||||
Leasehold improvements | Until the end of the lease term | ||||||||||||||||||
Computer equipment | 3 to 5 years | ||||||||||||||||||
Furniture and fixtures | 7 years | ||||||||||||||||||
Laboratory equipment | 10 years | ||||||||||||||||||
Long-lived assets are reviewed for impairment on a periodic basis and when changes in circumstances indicate the possibility that the carrying amount may not be recoverable. Long-lived assets are grouped at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets. If the forecast of undiscounted future cash flows is less than the carrying amount of the assets, an impairment charge would be recognized to reduce the carrying value of the assets to fair value. If a possible impairment is identified, the asset group’s fair value is measured relying primarily on a discounted cash flow methodology. | |||||||||||||||||||
Long-term investment in affiliate | Long-term investment in affiliate: The Company accounts for its investment in affiliate under the equity method. The Company records equity method adjustments in gains (losses) on equity method investments, net, and may do so with up to a three-month lag, pending on the timely availability of financial information of the investee. Equity method adjustments include: our proportionate share of investee income or loss, gains or losses resulting from investee capital transactions, and other adjustments required by the equity method. The long-term investment in affiliate is subject to a periodic impairment review and is considered to be impaired when a decline in carrying value is judged to be other-than-temporary. Evidence of a loss in value might include (i) absence of an ability to recover the carrying amount of the investment or (ii) inability of the investee to sustain an earnings capacity that would justify the carrying amount of the investment. | ||||||||||||||||||
Customer deposits and other | Customer deposits and other: Customer deposits and other represent either (i) cash received from customers in advance of product shipment or delivery of services; or (ii) cash received from government as research grants, which the Company has yet to complete the research activities. | ||||||||||||||||||
The cash received from government as research grants is recognized as a liability until the research is performed. Other than a nominal management fee, which the Company is entitled to earn when the research is performed, the research activities related to the grants are excluded from revenue and are presented on a net basis in the statement of operations. | |||||||||||||||||||
Income taxes | Income taxes: Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. | ||||||||||||||||||
The Company has not recorded a reserve for any tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company files tax returns in all appropriate jurisdictions, which include a federal tax return and various state tax returns. Open tax years for these jurisdictions are 2011 to 2014, which statutes expire in 2015 to 2018, respectively. When and if applicable, potential interest and penalty costs are accrued as incurred, with expenses recognized in general and administrative expenses in the statements of operations. As of January 3, 2015, the Company has no liability for unrecognized tax benefits. | |||||||||||||||||||
Research and development costs | Research and development costs: Research and development costs consist of direct and indirect costs associated with the development of the Company’s technologies. These costs are expensed as incurred. Research and development costs for the periods ended January 3, 2015 and December 28, 2013 were approximately $514,000 and $134,000, respectively. | ||||||||||||||||||
Advertising | Advertising: The Company expenses the production costs of advertising the first time the advertising takes place. Advertising expense for the periods ended January 3, 2015 and December 28, 2013 were approximately $171,000 and $355,000, respectively. | ||||||||||||||||||
Share-based compensation | Share-based compensation: The Company has an Equity Incentive Plan under which the Board of Directors may grant restricted stock or stock options to employees and non-employees. For employees, share-based compensation cost is recorded for all option grants and awards of non-vested stock based on the grant date fair value of the award, and is recognized over the period the employee is required to provide services for the award. For non-employees, share-based compensation cost is recorded for all option grants and awards of non-vested stock and is remeasured over the vesting term as earned. The expense is recognized over the period the non-employee is required to provide services for the award. | ||||||||||||||||||
The Company recognizes compensation expense over the requisite service period using the straight-line method for option grants without performance conditions. For stock options that have both service and performance conditions, the Company recognizes compensation expense using the graded attribution method. Compensation expense for stock options with performance conditions is recognized only for those awards expected to vest. | |||||||||||||||||||
From time to time, the Company awards shares of its common stock to non-employees for services provided or to be provided. The fair value of the awards are measured either based on the fair market value of stock at the date of grant or the value of the services provided, based on which is more reliably measureable. Since these stock awards are fully vested and non-forfeitable, upon issuance the measurement date for the award is usually reached on the date of the award. | |||||||||||||||||||
Fair Value Measurement | Fair Value Measurement: The Company follows the provisions of the accounting standard which defines fair value, establishes a framework for measuring fair value and enhances fair value measurement disclosure. Under these provisions, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. | ||||||||||||||||||
The standard establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use on unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is described below: | |||||||||||||||||||
Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. | |||||||||||||||||||
Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. | |||||||||||||||||||
Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. | |||||||||||||||||||
Financial instruments | Financial instruments: The estimated fair value of financial instruments has been determined based on the Company’s assessment of available market information and appropriate valuation methodologies. The Company’s financial instruments that are included in current assets and current liabilities are recorded at cost in the consolidated balance sheets. The estimated fair value of these financial instruments approximates their carrying value due to their short-term nature. | ||||||||||||||||||
The carrying amounts reported in the balance sheet for capital lease obligations are present values of the obligations, excluding the interest portion. Capital lease obligations with maturities less than one year are classified as current liabilities. | |||||||||||||||||||
The carrying amounts reported in the balance sheet for loan payable are present values net of discount, excluding the interest portion. The carrying value of long-term portion of the loan payable approximates fair value because the Company’s interest rate yield based on the credit rating of the Company is believed to be near current market rates. The long-term portion of the Company’s loan payable is considered a Level 3 liability within the fair value hierarchy. Loan payable with maturities less than one year are classified as current liabilities. | |||||||||||||||||||
Recent accounting standards: | Recent accounting standards: In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for us in our first quarter of fiscal 2018 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. We are currently evaluating the impact of our pending adoption of ASU 2014-09 on our consolidated financial statements. | ||||||||||||||||||
In August 2014, the FASB issued ASU 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern.” Currently, there is no guidance in U.S. GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern or to provide related footnote disclosures. The amendments in this ASU provide that guidance. In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued (or available to be issued). The amendments in this ASU are effective for public and nonpublic entities for annual periods ending after December 15, 2016. Early adoption is permitted. On September 27, 2014, the Company early adopted ASU 2014-15. The adoption of ASU 2014-15 had no impacts on the Company’s consolidated financial statements. | |||||||||||||||||||
Significant_Accounting_Policie2
Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||||||||
Jan. 03, 2015 | |||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||
Historical volatility and the average daily trading volume of the Companybs common stock | |||||||||||||||||||
Period | Volatility | Average Daily | |||||||||||||||||
Trading Volume | |||||||||||||||||||
6/20/2008 ~ 4/19/2010 | 402 | % | 11,455 | ||||||||||||||||
4/20/2010 ~ 1/2/2015 | 77 | % | 155,111 | ||||||||||||||||
Pro-forma disclosure of our historical calculation of estimated volatility | Fiscal Year 2013 | Fiscal Year 2013 | |||||||||||||||||
Name | Use | Volatility | Name | Use | Volatility | ||||||||||||||
Covance, Inc. | 50 | % | 35 | % | ChromaDex Corp. | 20 | % | 243 | % | ||||||||||
Sigma-Aldrich Corp. | 50 | % | 30 | % | Covance Inc. | 40 | % | 35 | % | ||||||||||
Sigma-Aldrich Corp. | 40 | % | 30 | % | |||||||||||||||
Weighted Average | 33 | % | Weighted Average | 75 | % | ||||||||||||||
Inventories | 2014 | 2013 | |||||||||||||||||
Reference standards | $ | 1,760,305 | $ | 1,769,160 | |||||||||||||||
Bulk ingredients | 2,298,036 | 694,965 | |||||||||||||||||
4,058,341 | 2,464,125 | ||||||||||||||||||
Less valuation allowance | 324,000 | 260,000 | |||||||||||||||||
$ | 3,734,341 | $ | 2,204,125 | ||||||||||||||||
Leasehold improvements and equipment | Useful Life | ||||||||||||||||||
Leasehold improvements | Until the end of the lease term | ||||||||||||||||||
Computer equipment | 3 to 5 years | ||||||||||||||||||
Furniture and fixtures | 7 years | ||||||||||||||||||
Laboratory equipment | 10 years | ||||||||||||||||||
Loss_Per_Share_Applicable_to_C1
Loss Per Share Applicable to Common Stockholders (Tables) | 12 Months Ended | ||||||||
Jan. 03, 2015 | |||||||||
Earnings Per Share Tables | |||||||||
Earnings Per Share | Years Ended | ||||||||
2014 | 2013 | ||||||||
Net loss | $ | (5,388,185 | ) | $ | (4,419,525 | ) | |||
Basic and diluted loss per common share | $ | (0.05 | ) | $ | (0.04 | ) | |||
Weighted average common shares outstanding (1): | 106,459,379 | 99,987,443 | |||||||
Potentially dilutive securities (2): | |||||||||
Stock options | 13,974,052 | 13,160,955 | |||||||
Warrants | 469,020 | - | |||||||
Convertible Debt | 773,395 | - | |||||||
(1) Includes 1,623,186 and 500,000 weighted average nonvested shares of restricted stock for the year 2014 and 2013, respectively, which are participating securities that feature voting and dividend rights. | |||||||||
(2) Excluded from the computation of loss per share as their impact is antidilutive. |
Investment_in_Affiliate_Tables
Investment in Affiliate (Tables) | 12 Months Ended | ||||||||
Jan. 03, 2015 | |||||||||
Investment In Affiliate | |||||||||
NeutriSci Business information | Six Months Ended | Three Months Ended | |||||||
30-Sep-13 | 31-Dec-13 | ||||||||
Sales | $ | 36,451 | $ | 60,575 | |||||
Gross profit | 13,310 | 33,619 | |||||||
Net loss | $ | (813,212 | ) | $ | (435,208 | ) | |||
Change in Carrying Value and Ownership | Carrying | Ownership | |||||||
Value | Percentage | ||||||||
At March 28, 2013 | $ | 2,157,804 | 5.7 | % | |||||
Company's share of NeutriSci's loss | |||||||||
through September 30, 2013 | (44,961 | ) | |||||||
Proceeds from investment in affiliate | (225,000 | ) | |||||||
At December 28, 2013 | 1,887,844 | 4.9 | % | ||||||
Company's share of NeutriSci's loss | |||||||||
for the three-month period ended December 31, 2013; | |||||||||
previously not recognized due to a three-month lag | (21,543 | ) | |||||||
Proceeds from assignment of the Senior Note | (1,092,500 | ) | |||||||
Proceeds from sale and transfer of the Preferred Shares | (749,515 | ) | |||||||
Loss from investment in affiliate | (24,286 | ) | |||||||
At January 3, 2015 | $ | - | 0 | % |
Intangible_Assets_Tables
Intangible Assets (Tables) | 12 Months Ended | ||||||||||||||||
Jan. 03, 2015 | |||||||||||||||||
Intangible Assets Tables | |||||||||||||||||
Intangible assets | 2014 | 2013 | |||||||||||||||
Gross Carrying | Accumulated | Gross Carrying | Accumulated | ||||||||||||||
Amount | Amortization | Amount | Amortization | ||||||||||||||
Amortized intangible assets: | |||||||||||||||||
License agreements and other | $ | 1,205,275 | $ | 909,224 | $ | 1,075,285 | $ | 873,635 | |||||||||
Estimated aggregate amortization expense | Years ending December: | ||||||||||||||||
2015 | $ | 40,000 | |||||||||||||||
2016 | 40,000 | ||||||||||||||||
2017 | 40,000 | ||||||||||||||||
2018 | 36,000 | ||||||||||||||||
2019 | 33,000 | ||||||||||||||||
Thereafter | 107,000 | ||||||||||||||||
$ | 296,000 |
Leasehold_Improvements_and_Equ1
Leasehold Improvements and Equipment (Tables) | 12 Months Ended | ||||||||
Jan. 03, 2015 | |||||||||
Leasehold Improvements And Equipment | |||||||||
Leasehold Improvements and Equipment | 2014 | 2013 | |||||||
Laboratory equipment | $ | 3,151,748 | $ | 2,782,364 | |||||
Leasehold improvements | 495,240 | 491,125 | |||||||
Computer equipment | 329,737 | 372,851 | |||||||
Furniture and fixtures | 13,039 | 18,313 | |||||||
Office equipment | 7,877 | 7,877 | |||||||
Construction in progress | 68,141 | 40,126 | |||||||
4,065,782 | 3,712,656 | ||||||||
Less accumulated depreciation | 2,801,122 | 2,649,417 | |||||||
$ | 1,264,660 | $ | 1,063,239 |
Capitalized_Lease_Obligations_
Capitalized Lease Obligations (Tables) | 12 Months Ended | ||||
Jan. 03, 2015 | |||||
Capitalized Lease Obligations Tables | |||||
Minimum future lease payments | Year ending December: | ||||
2015 | $ | 191,454 | |||
2016 | 178,563 | ||||
2017 | 157,713 | ||||
2018 | 108,860 | ||||
2019 | 33,884 | ||||
Total minimum lease payments | 670,474 | ||||
Less amount representing interest at a rate of approximately 8.8% per year | 99,181 | ||||
Present value of net minimum lease payments | 571,293 | ||||
Less current portion | 148,278 | ||||
Long-term obligations under capital leases | $ | 423,015 | |||
Loan_Payable_Tables
Loan Payable (Tables) | 12 Months Ended | ||||
Jan. 03, 2015 | |||||
Debt Disclosure [Abstract] | |||||
Fair value assumptions | 29-Sep-14 | ||||
Fair value of common stock | $ | 1.08 | |||
Volatility | 72.4 | % | |||
Expected dividends | 0 | % | |||
Contractual term | 5.0 years | ||||
Risk-free rate | 1.76 | % | |||
Loan Payable, Principal amount payable | Principal amount payable for following years ending December | ||||
2015 | $ | 223,358 | |||
2016 | 867,247 | ||||
2017 | 1,035,995 | ||||
2018 | 373,400 | ||||
Total principal payments | 2,500,000 | ||||
Accrued end of term charge | 10,486 | ||||
Total loan payable | 2,510,486 | ||||
Less unamortized debt discount | 218,654 | ||||
Less current portion | 223,358 | ||||
Loan payable – long term | $ | 2,068,474 |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Jan. 03, 2015 | |||||||||
Income Taxes Tables | |||||||||
Reconciliation of income tax expense (benefit) | 2014 | 2013 | |||||||
Federal income tax expense at statutory rate | (34.0 | )% | (34.0 | )% | |||||
State income tax, net of federal benefit | (5.3 | )% | (4.3 | )% | |||||
Permanent differences | 2.7 | % | 2.6 | % | |||||
Change in tax rates | (6.1 | )% | (3.7 | )% | |||||
Change in valuation allowance | 42.8 | % | 39.2 | % | |||||
Other | (0.1 | )% | 0.2 | % | |||||
Effective tax rate | 0 | % | 0 | % | |||||
Deferred income tax assets and liabilities | 2014 | 2013 | |||||||
Deferred tax assets: | |||||||||
Net operating loss carryforward | $ | 11,401,000 | $ | 8,953,000 | |||||
Stock options and restricted stock | 2,934,000 | 1,945,000 | |||||||
Investment in affiliate related to BluScience transaction | - | 1,187,000 | |||||||
Inventory reserve | 226,000 | 100,000 | |||||||
Allowance for doubtful accounts | 15,000 | 3,000 | |||||||
Accrued expenses | 125,000 | 100,000 | |||||||
Deferred revenue | 4,000 | 64,000 | |||||||
Intangibles | 26,000 | 36,000 | |||||||
Deferred rent | 81,000 | 99,000 | |||||||
14,812,000 | 12,487,000 | ||||||||
Less valuation allowance | 14,669,000 | 12,361,000 | |||||||
143,000 | 126,000 | ||||||||
Deferred tax liabilities: | |||||||||
Leasehold improvements and equipment | (108,000 | ) | (100,000 | ) | |||||
Prepaid expenses | (35,000 | ) | (26,000 | ) | |||||
(143,000 | ) | (126,000 | ) | ||||||
$ | - | $ | - |
Employee_ShareBased_Compensati1
Employee Share-Based Compensation (Tables) | 12 Months Ended | ||||||||||||||||
Jan. 03, 2015 | |||||||||||||||||
Employee Share-based Compensation Tables | |||||||||||||||||
Weighted average assumptions of stock options granted | Year Ended December | 2014 | 2013 | ||||||||||||||
Expected Volatility | 74.63 | % | 32.75 | % | |||||||||||||
Expected dividends | 0 | % | 0 | % | |||||||||||||
Expected term | 5.76 years | 6.0 years | |||||||||||||||
Risk-free rate | 1.86 | % | 1.51 | % | |||||||||||||
Historical volatility and the average daily trading volume of the Companybs common stock | |||||||||||||||||
Period | Volatility | Average Daily | |||||||||||||||
Trading Volume | |||||||||||||||||
6/20/2008 ~ 4/19/2010 | 402 | % | 11,455 | ||||||||||||||
4/20/2010 ~ 1/2/2015 | 77 | % | 155,111 | ||||||||||||||
Service Period Based Stock Options | Weighted Average | ||||||||||||||||
Remaining | Aggregate | ||||||||||||||||
Number of | Exercise | Contractual | Intrinsic | ||||||||||||||
Shares | Price | Term | Value | ||||||||||||||
Outstanding at December 28, 2013 | 12,113,655 | $ | 1.06 | 7.43 | |||||||||||||
Options Granted | 2,233,987 | 1.39 | 10 | ||||||||||||||
Options Classification from Employee to Non-Employee | (113,151 | ) | 0.76 | ||||||||||||||
Options Exercised | (534,715 | ) | 0.87 | ||||||||||||||
Options Expired | (253,900 | ) | 1 | ||||||||||||||
Options Forfeited | (722,275 | ) | 1.13 | ||||||||||||||
Outstanding at January 3, 2015 | 12,723,601 | $ | 1.13 | 7 | $ | 581,050 | |||||||||||
Exercisable at January 3, 2015 | 9,362,374 | $ | 1.13 | 6.4 | $ | 455,570 | |||||||||||
Performance Based Stock Options | Weighted Average | ||||||||||||||||
Remaining | Aggregate | ||||||||||||||||
Number of | Exercise | Contractual | Intrinsic | ||||||||||||||
Shares | Price | Term | Value | ||||||||||||||
Outstanding at December 28, 2013 | 200,000 | $ | 0.63 | 9.08 | |||||||||||||
Options Granted | - | - | |||||||||||||||
Options Exercised | - | - | |||||||||||||||
Options Expired | - | - | |||||||||||||||
Options Forfeited | - | - | |||||||||||||||
Outstanding at January 3, 2015 | 200,000 | $ | 0.63 | 8.08 | $ | 54,000 | |||||||||||
Exercisable at January 3, 2015 | 95,833 | $ | 0.63 | 8.08 | $ | 25,875 | |||||||||||
Restricted stock awards granted to employees | Weighted Average | ||||||||||||||||
Award-Date | |||||||||||||||||
Shares | Fair Value | ||||||||||||||||
Unvested shares at December 28, 2013 | 500,000 | $ | 0.69 | ||||||||||||||
Granted | 1,090,000 | 1.41 | |||||||||||||||
Vested | - | - | |||||||||||||||
Forfeited | - | - | |||||||||||||||
Unvested shares at January 3, 2015 | 1,590,000 | $ | 1.18 | ||||||||||||||
Expected to Vest as of January 3, 2015 | 1,590,000 | $ | 1.18 |
NonEmployee_ShareBased_Compens1
Non-Employee Share-Based Compensation (Tables) | 12 Months Ended | ||||||||||||||||
Jan. 03, 2015 | |||||||||||||||||
Non-employee Share-based Compensation Tables | |||||||||||||||||
Non-Employee stock options | Weighted Average | ||||||||||||||||
Remaining | Aggregate | ||||||||||||||||
Number of | Exercise | Contractual | Intrinsic | ||||||||||||||
Shares | Price | Term | Value | ||||||||||||||
Outstanding at December 28, 2013 | 847,300 | $ | 1.44 | 5.74 | |||||||||||||
Options Granted | 90,000 | 1.24 | 10 | ||||||||||||||
Options Classification from Employe to Non-Employee | 113,151 | 0.76 | |||||||||||||||
Options Exercised | - | - | |||||||||||||||
Options Forfeited | - | - | |||||||||||||||
Outstanding at January 3, 2015 | 1,050,451 | $ | 1.35 | 5.46 | $ | 37,550 | |||||||||||
Exercisable at January 3, 2015 | 971,701 | $ | 1.36 | 5.12 | $ | 37,550 | |||||||||||
Warrant award assumptions | 27-Oct-14 | ||||||||||||||||
Volatility | 66.9 | % | |||||||||||||||
Expected dividends | 0 | % | |||||||||||||||
Contractual term | 2.0 years | ||||||||||||||||
Risk-free rate | 0.41 | % | |||||||||||||||
Restricted stock award activity | Weighted Average | ||||||||||||||||
Shares | Fair Value | ||||||||||||||||
Unvested shares at December 28, 2013 | - | $ | - | ||||||||||||||
Granted | 96,000 | 1.3 | |||||||||||||||
Vested | (20,000 | ) | 1.17 | ||||||||||||||
Forfeited | - | - | |||||||||||||||
Unvested shares expected to vest at January 3, 2015 | 76,000 | $ | 0.9 |
Warrants_Tables
Warrants (Tables) | 12 Months Ended | ||||||||||||||
Jan. 03, 2015 | |||||||||||||||
Warrants Tables | |||||||||||||||
Warrants | Weighted Average | ||||||||||||||
Remaining | Aggregate | ||||||||||||||
Number of | Exercise | Contractual | Intrinsic | ||||||||||||
Shares | Price | Term | Value | ||||||||||||
Outstanding at December 29, 2012 | 10,056,914 | $ | 0.72 | 0.44 | |||||||||||
Warrants Issued | |||||||||||||||
Warrants Exercised | (8,338,564 | ) | 0.25 | ||||||||||||
Warrants Expired | (1,718,350 | ) | 3 | ||||||||||||
Outstanding at December 28, 2013 | - | - | |||||||||||||
Warrants Issued | 469,020 | 1.07 | 4.68 | ||||||||||||
Warrants Exercised | - | - | |||||||||||||
Warrants Expired | - | - | |||||||||||||
Outstanding and exercisable at January 3, 2015 | 469,020 | $ | 1.07 | 4.43 | $ | - |
Commitments_and_Contingencis_T
Commitments and Contingencis (Tables) | 12 Months Ended | ||||
Jan. 03, 2015 | |||||
Commitments Tables | |||||
Minimum future rental payments | Fiscal years ending: | ||||
2015 | $ | 544,000 | |||
2016 | 319,000 | ||||
2017 | 225,000 | ||||
2018 | 233,000 | ||||
2019 | 181,000 | ||||
$ | 1,502,000 | ||||
Minimum royalties including license maintenance fees | Fiscal years ending: | ||||
2015 | $ | 272,000 | |||
2016 | 283,000 | ||||
2017 | 320,000 | ||||
2018 | 338,000 | ||||
2019 | 339,000 | ||||
$ | 1,552,000 |
Business_Segmentation_and_Geog1
Business Segmentation and Geographical Distribution (Tables) | 12 Months Ended | ||||||||||||||||||||
Jan. 03, 2015 | |||||||||||||||||||||
Business Segmentation And Geographical Distribution Tables | |||||||||||||||||||||
Business Segmentation and Geographical Distribution | |||||||||||||||||||||
Year ended | Core Standards and | Ingredients | Regulatory | Other | Total | ||||||||||||||||
3-Jan-15 | Contract Services | segment | Consulting segment | ||||||||||||||||||
segment | |||||||||||||||||||||
Net sales | $ | 7,487,189 | $ | 6,857,177 | $ | 968,813 | $ | - | $ | 15,313,179 | |||||||||||
Cost of sales | 5,141,667 | 4,257,347 | 588,500 | - | 9,987,514 | ||||||||||||||||
Gross profit | 2,345,522 | 2,599,830 | 380,313 | - | 5,325,665 | ||||||||||||||||
Operating expenses: | |||||||||||||||||||||
Sales and marketing | 975,800 | 1,081,209 | 79,575 | - | 2,136,584 | ||||||||||||||||
General and administrative | - | - | - | 8,374,601 | 8,374,601 | ||||||||||||||||
Loss from investment in affiliate | - | - | - | 45,829 | 45,829 | ||||||||||||||||
Operating expenses | 975,800 | 1,081,209 | 79,575 | 8,420,430 | 10,557,014 | ||||||||||||||||
Operating income (loss) | $ | 1,369,722 | $ | 1,518,621 | $ | 300,738 | $ | (8,420,430 | ) | $ | (5,231,349 | ) | |||||||||
Year ended | Core Standards and | Ingredients | Scientific and | Other | Total | ||||||||||||||||
28-Dec-13 | Contract | segment | Regulatory | ||||||||||||||||||
Services | Consulting segment | ||||||||||||||||||||
segment | |||||||||||||||||||||
Net sales | $ | 6,643,832 | $ | 2,430,699 | $ | 1,146,718 | $ | (60,285 | ) | $ | 10,160,964 | ||||||||||
Cost of sales | 4,893,649 | 1,501,187 | 632,037 | 955 | 7,027,828 | ||||||||||||||||
Gross profit (loss) | 1,750,183 | 929,512 | 514,681 | (61,240 | ) | 3,133,136 | |||||||||||||||
Operating expenses: | |||||||||||||||||||||
Sales and marketing | 1,459,620 | 752,121 | 14,705 | 131,159 | 2,357,605 | ||||||||||||||||
General and administrative | - | - | - | 5,117,016 | 5,117,016 | ||||||||||||||||
Loss from investment in affiliate | - | - | - | 44,961 | 44,961 | ||||||||||||||||
Operating expenses | 1,459,620 | 752,121 | 14,705 | 5,293,136 | 7,519,582 | ||||||||||||||||
Operating income (loss) | $ | 290,563 | $ | 177,391 | $ | 499,976 | $ | (5,354,376 | ) | $ | (4,386,446 | ) | |||||||||
At January 3, 2015 | Core Standards and | IngrediEnts | Scientific and | Other | Total | ||||||||||||||||
Contract Services | segment | Regulatory | |||||||||||||||||||
segment | Consulting | ||||||||||||||||||||
segment | |||||||||||||||||||||
Total assets | $ | 3,220,518 | $ | 3,757,073 | $ | 105,711 | $ | 4,524,906 | $ | 11,608,208 | |||||||||||
At December 28, 2013 | Core Standards and | Ingredients | Scientific and | Other | Total | ||||||||||||||||
Contract | segment | Regulatory | |||||||||||||||||||
Services | Consulting segment | ||||||||||||||||||||
segment | |||||||||||||||||||||
Total assets | $ | 2,952,270 | $ | 1,083,856 | $ | 139,765 | $ | 4,811,001 | $ | 8,986,892 | |||||||||||
Nature_of_Business_and_Liquidi1
Nature of Business and Liquidity (Details Narrative) (USD $) | 12 Months Ended | ||
Jan. 03, 2015 | Dec. 28, 2013 | Dec. 29, 2012 | |
Liquidity | |||
Operating loss | ($5,231,349) | ($4,386,446) | |
Net loss | -5,388,185 | -4,419,525 | |
Cash and cash equivalents | 3,964,750 | 2,261,336 | 520,000 |
Term loan maximum borrowing capacity | 5,000,000 | ||
Proceeds from loan | 2,500,000 | ||
Available for borrowing | $2,500,000 | ||
Term loan interest rate | 9.35% |
Significant_Accounting_Policie3
Significant Accounting Policies (Details) | 12 Months Ended | 22 Months Ended | 56 Months Ended |
Dec. 28, 2013 | Apr. 19, 2010 | Jan. 02, 2015 | |
Accounting Policies [Abstract] | |||
Volatility | 75.00% | 402.00% | 77.00% |
Average Daily Trading Volume | 11,455 | 155,111 |
Significant_Accounting_Policie4
Significant Accounting Policies (Details 1) | 12 Months Ended | 22 Months Ended | 56 Months Ended |
Dec. 28, 2013 | Apr. 19, 2010 | Jan. 02, 2015 | |
Volatility | 75.00% | 402.00% | 77.00% |
ChromaDex [Member] | |||
Volatility | 243.00% | ||
Benchmark 1 [Member] | |||
Volatility | 35.00% | ||
Benchmark 2 [Member] | |||
Volatility | 30.00% |
Significant_Accounting_Policie5
Significant Accounting Policies (Details 2) (USD $) | Jan. 03, 2015 | Dec. 28, 2013 |
Inventories | ||
Reference standards | $1,760,305 | $1,769,160 |
Bulk ingredients | 2,298,036 | 694,965 |
Inventory-gross | 4,058,341 | 2,464,125 |
Less valuation allowance | 324,000 | 260,000 |
Inventory-net | $3,734,341 | $2,204,125 |
Significant_Accounting_Policie6
Significant Accounting Policies (Details 3) | 12 Months Ended |
Jan. 03, 2015 | |
Leaseholds and Leasehold Improvements [Member] | |
Useful life description | Until the end of the lease term |
Computer Equipment [Member] | Minimum [Member] | |
Useful life | 3 years |
Computer Equipment [Member] | Maximum [Member] | |
Useful life | 5 years |
Furniture and Fixtures [Member] | |
Useful life | 7 years |
LaboratoryEquipment [Member] | |
Useful life | 10 years |
Significant_Accounting_Policie7
Significant Accounting Policies (Details Narrative) (USD $) | 12 Months Ended | |
Jan. 03, 2015 | Dec. 28, 2013 | |
Shipping and handling fees billed | $115,000 | $110,000 |
Cost of shipping and handling | 130,000 | 128,000 |
Research and development costs | 514,000 | 134,000 |
Advertising expense | $171,000 | $355,000 |
Stock options, Volatility | 75.00% | 33.00% |
ChangeInAccountingEstimateDescription | Minimum [Member] | ||
Weight on Compay's historical Volatility rate | 20.00% | |
ChangeInAccountingEstimateDescription | Maximum [Member] | ||
Weight on Compay's historical Volatility rate | 75.00% |
Loss_Per_Share_Applicable_to_C2
Loss Per Share Applicable to Common Stockholders (Details) (USD $) | 12 Months Ended | |||
Jan. 03, 2015 | Dec. 28, 2013 | |||
Earnings per share | ||||
Net loss | ($5,388,185) | ($4,419,525) | ||
Basic and diluted loss per common share | ($0.05) | ($0.04) | ||
Weighted average common shares outstanding | 106,459,379 | [1] | 99,987,443 | [1] |
Stock Options [Member] | ||||
Potentially dilutive securities | ||||
Diliutive securities | 13,974,052 | [2] | 13,160,955 | [2] |
Warrant [Member] | ||||
Potentially dilutive securities | ||||
Diliutive securities | 469,020 | [2] | [2] | |
Convertible Debt Securities [Member] | ||||
Potentially dilutive securities | ||||
Diliutive securities | $773,395 | [2] | [2] | |
[1] | Includes 1,623,186 and 500,000 weighted average nonvested shares of restricted stock for the year 2014 and 2013, respectively, which are participating securities that feature voting and dividend rights. | |||
[2] | Excluded from the computation of loss per share as their impact is antidilutive. |
Investment_in_Affiliate_Detail
Investment in Affiliate (Details) (USD $) | 12 Months Ended | 3 Months Ended | 6 Months Ended | |
Jan. 03, 2015 | Dec. 28, 2013 | Dec. 31, 2015 | Sep. 30, 2013 | |
Gross profit | $5,325,665 | $3,133,136 | ||
Net loss | -5,388,185 | -4,419,525 | ||
NeutriSci [Member] | ||||
Sales | 60,575 | 36,451 | ||
Gross profit | 33,619 | 13,310 | ||
Net loss | ($435,208) | ($813,212) |
Investment_in_Affiliate_Detail1
Investment in Affiliate (Details 1) (NeutriSci [Member], USD $) | 9 Months Ended | 12 Months Ended | |
Dec. 28, 2013 | Jan. 03, 2015 | Dec. 29, 2012 | |
NeutriSci [Member] | |||
Carrying value, equity investment, beginning balance | $2,157,804 | $1,887,844 | $2,157,804 |
Company's share of NeutriSci's loss during period | -44,961 | -21,543 | |
Proceeds from assignment of the Senior Note | -1,092,500 | ||
Proceeds from sale and transfer of the Preferred Shares | -749,515 | ||
Proceeds (loss) from investment in affiliate | -225,000 | -24,286 | |
Carrying value, equity investment, ending balance | $1,887,844 | $2,157,804 | |
Changes in Carrying Value and Ownership Percentage for ChromaDex Corporation | |||
Ownership percentage, beginning of period | 5.70% | 4.90% | |
Ownership percentage, end of period | 4.90% | 0.00% |
Investment_in_Affiliate_Detail2
Investment in Affiliate (Details Narrative) (USD $) | 1 Months Ended | 12 Months Ended | 1 Months Ended | ||
Dec. 30, 2013 | Dec. 28, 2013 | Dec. 01, 2014 | Jan. 03, 2015 | Mar. 28, 2013 | |
Senior note to an unrelated party | $1,250,000 | ||||
Remaining outstanding on the Senior Note at the date of assignment | 2,275,000 | ||||
Legal fees | 7,500 | ||||
NeutriSci Preferred shares due to an unrelated party | 500,000 | ||||
Placement agent cash fee | 150,000 | ||||
NeutriSci Preferred shares due to Palladium | 50,000 | ||||
NeutriSci [Member] | |||||
Sale transaction value, cost recovery method | 3,157,804 | ||||
Cash payment for agreement | 1,000,000 | ||||
Secured note | 2,500,000 | ||||
Convertible shares | 625,000 | ||||
Series I preferred shares issued | 669,708 | ||||
Series I conversion into Class A Common Shares | 2,678,832 | ||||
Class A common percent of deemed shares | 19.00% | ||||
Carrying value, equity investment, beginning balance | 2,157,804 | 2,157,804 | |||
Cash payment received | 225,000 | ||||
Series I Unrelated Party 1 [Member] | |||||
Series I preferred shares transferred | 108,676 | ||||
Series I Paladium [Member] | |||||
Series I preferred shares transferred | 10,868 | ||||
Series I Unrelated Party 2 [Member] | |||||
Sale of preferred stock, shares | 551,114 | ||||
Proceeds from sale of preferred stock | 749,515 | ||||
Loss on sale of preferred stock | -24,286 | ||||
Value of preferred stock sold | 773,801 |
Intangible_Assets_Details
Intangible Assets (Details) (USD $) | Jan. 03, 2015 | Dec. 28, 2013 |
Intangible assets | ||
Gross Carrying Amount | $1,205,275 | $909,224 |
Accumulated Amortization | $1,075,285 | $873,635 |
Intangible_Assets_Details_1
Intangible Assets (Details 1) (USD $) | Jan. 03, 2015 |
Finite Lived Intangible Assets Future Amortization Expense | |
2015 | $40,000 |
2016 | 40,000 |
2017 | 40,000 |
2018 | 36,000 |
2019 | 33,000 |
Thereafter | 107,000 |
Intangible assets | $296,000 |
Intangible_Assets_Details_Narr
Intangible Assets (Details Narrative) (USD $) | 12 Months Ended | |
Jan. 03, 2015 | Dec. 28, 2013 | |
Intangible Assets Details Narrative | ||
Amortization expense on amortizable intangible assets | $35,589 | $23,532 |
Unamortized expense to be recognized over a weighted average period | 7 years 3 months 18 days |
Leasehold_Improvements_and_Equ2
Leasehold Improvements and Equipment (Details) (USD $) | Jan. 03, 2015 | Dec. 28, 2013 |
Leasehold improvements | ||
Laboratory equipment | $3,151,748 | $2,782,364 |
Leasehold improvements | 495,240 | 491,125 |
Computer equipment | 329,737 | 372,851 |
Furniture and fixtures | 13,039 | 18,313 |
Office equipment | 7,877 | 7,877 |
Construction in progress | 68,141 | 40,126 |
Leasehold improvements, gross | 4,065,782 | 3,712,656 |
Less accumulated depreciation | 2,801,122 | 2,649,417 |
Leasehold improvements, total | $1,264,660 | $1,063,239 |
Leasehold_Improvements_and_Equ3
Leasehold Improvements and Equipment (Details Narrative) (USD $) | 12 Months Ended | |
Jan. 03, 2015 | Dec. 28, 2013 | |
Leasehold Improvements And Equipment Details Narrative | ||
Depreciation expense | $222,721 | $246,175 |
Capitalized lease obligations expense | 1,073,601 | 695,461 |
Capitalized lease obligations accumulated amortization | 242,887 | 136,358 |
Disposal of depreciated equipment | $56,000 |
Capitalized_Lease_Obligations_1
Capitalized Lease Obligations (Details) (USD $) | Mar. 18, 2015 | Jan. 03, 2015 |
Capitalized Lease Obligations Details | ||
2015 | $191,454 | |
2016 | 178,563 | |
2017 | 157,713 | |
2018 | 108,860 | |
2019 | 33,884 | |
Total minimum lease payments | 7,000 | 670,474 |
Less amount representing interest at a rate of approximately 8.8% per year | 99,181 | |
Present value of net minimum lease payments | 571,293 | |
Less current portion | 148,278 | |
Long-term obligations under capital leases | $423,015 |
Capitalized_Lease_Obligations_2
Capitalized Lease Obligations (Details Narrative) (USD $) | 3 Months Ended | 12 Months Ended | |
Mar. 18, 2015 | Jan. 03, 2015 | Dec. 28, 2013 | |
Capitalized Lease Obligations Details Narrative | |||
Interest expense | $47,000 | $34,000 | |
Minimum lease payment | 7,000 | 670,474 | |
Total lease obligation | 356,000 | 423,015 | 280,342 |
Capital lease recorded | $304,000 | $322,802 | $302,017 |
Loan_Payable_Details
Loan Payable (Details) (USD $) | 0 Months Ended | |
Oct. 27, 2014 | Sep. 29, 2014 | |
Debt Disclosure [Abstract] | ||
Fair value of common stock | $1.08 | |
Volatility | 66.90% | 72.40% |
Expected dividends | 0.00% | 0.00% |
Contractual term | 2 years | 5 years |
Risk-free rate | 0.41% | 1.76% |
Loan_Payable_Details_1
Loan Payable (Details 1) (USD $) | Jan. 03, 2015 | Dec. 28, 2013 |
Principal amount payable for following years ended December | ||
2015 | $223,358 | |
2016 | 867,247 | |
2017 | 1,035,995 | |
2018 | 373,400 | |
Total principal payments | 2,500,000 | |
Accrued end of term charge | 10,486 | |
Total loan payable | 2,510,486 | |
Less unamortized debt discount | 218,654 | |
Less current portion | 223,358 | |
Loan payable - long term | $2,068,474 |
Loan_Payable_Details_Narrative
Loan Payable (Details Narrative) (USD $) | 12 Months Ended | |
Jan. 03, 2015 | Dec. 28, 2013 | |
Term loan maximum borrowing capacity | $5,000,000 | |
Proceeds from loan | 2,500,000 | |
Available for borrowing | 2,500,000 | |
Facility charge | 50,000 | |
Term loan interest rate Maximum | 9.35% | |
Repayment | The Loan Agreement further provides that, subject to certain conditions, any regularly scheduled installment of principal due to Lender may be paid, in whole or in part at the option of the Company or Lender, by converting a portion of the principal of the term loan into shares of the CompanyBs common stock (the BConversion SharesB) at a conversion price of $1.293, in lieu of payment in cash. The aggregate principal amount to be paid in Conversion Shares shall not exceed $1,000,000. Of this amount 50% shall convert at the LenderBs option and 50% shall convert at the CompanyBs option. | |
Percent Foreign Equity Securities | 35.00% | |
default interest rate | 4.00% | |
Debt issuance costs | -102,866 | |
Amortization of debt issuance costs | 11,505 | |
Unamortized debt issuance costs | 91,361 | |
End of term charge payable | 93,750 | |
Additional interest expense accrued | 10,486 | |
Recognized in additional paid in capital | 246,189 | |
Interest expense | 158,849 | 34,330 |
Lender [Domain] | ||
Warrant issued | 419,020 | |
Warrant exercise price | $1.06 | |
Amortization of debt issuance costs | 27,535 | |
Fair value of warrant issued to lender | 273,081 | |
Recognized in additional paid in capital | 246,189 | |
Interest expense | $112,000 |
Income_Taxes_Details
Income Taxes (Details) | 12 Months Ended | |
Jan. 03, 2015 | Dec. 28, 2013 | |
Income Taxes Details | ||
Income tax expense (benefit) at statutory rate | -34.00% | -34.00% |
State income taxes, net of federal tax effect | -5.30% | -4.30% |
Permanent differences | 2.70% | 2.60% |
Change in tax rates | -6.10% | -3.70% |
Change in valuation allowance | 42.80% | 39.20% |
Other | -0.10% | 0.20% |
Income Tax Expense Benefit | 0.00% | 0.00% |
Income_Taxes_Details_1
Income Taxes (Details 1) (USD $) | Jan. 03, 2015 | Dec. 28, 2013 |
Deferred tax assets: | ||
Net operating loss carryforward | $11,401,000 | $8,953,000 |
Stock options and restricted stock | 2,934,000 | 1,945,000 |
Investment in affiliate related to BluScience transaction | 1,187,000 | |
Inventory reserve | 226,000 | 100,000 |
Allowance for doubtful accounts | 15,000 | 3,000 |
Accrued expenses | 125,000 | 100,000 |
Deferred revenue | 4,000 | 64,000 |
Intangibles | 26,000 | 36,000 |
Deferred rent | 81,000 | 99,000 |
Deferred Tax Assets Gross | 14,812,000 | 12,487,000 |
Less valuation allowance | 14,669,000 | 12,361,000 |
Deferred Tax Assets Net | 143,000 | 126,000 |
Deferred tax liabilities: | ||
Leasehold improvements and equipment | -108,000 | -100,000 |
Prepaid expenses | -35,000 | 26,000 |
Deferred Income Tax Liabilities | -143,000 | -126,000 |
Deferred Tax Liabilities |
Income_Taxes_Details_Narrative
Income Taxes (Details Narrative) (USD $) | 12 Months Ended |
Jan. 03, 2015 | |
Income Taxes Details Narrative | |
Increase in valuation allowance | $2,308,000 |
Federal tax net operating loss carryforwards | 28,956,000 |
State tax net operating loss carryforwards | $29,092,000 |
Employee_ShareBased_Compensati2
Employee Share-Based Compensation (Details) (Options [Member]) | 12 Months Ended | |
Jan. 03, 2015 | Dec. 28, 2013 | |
Options [Member] | ||
Expected Volatility | 74.63% | 32.75% |
Expected dividends | 0.00% | 0.00% |
Expected term | 5 years 9 months 3 days | 6 years |
Risk-free rate | 1.86% | 1.51% |
Employee_ShareBased_Compensati3
Employee Share-Based Compensation (Details 1) | 12 Months Ended | 22 Months Ended | 56 Months Ended |
Dec. 28, 2013 | Apr. 19, 2010 | Jan. 02, 2015 | |
Employee Share-based Compensation Details 1 | |||
Volatility | 75.00% | 402.00% | 77.00% |
Average Daily Trading Volume | 11,455 | 155,111 |
Employee_ShareBased_Compensati4
Employee Share-Based Compensation (Details 2) (ServicePeriodBasedStockOptions [Member], USD $) | 12 Months Ended |
Jan. 03, 2015 | |
ServicePeriodBasedStockOptions [Member] | |
Number of Shares | |
Outstanding at Beginning of Period | 12,113,655 |
Options Granted | 2,233,987 |
Option classification from Employee to Non-Employee | -113,151 |
Options Exercised | -534,715 |
Options Expired | -253,900 |
Options Forfeited | -722,275 |
Outstanding at End of Period | 12,723,601 |
Exercisable at End of Period | 9,362,374 |
Weighted Average Exercise Price | |
Outstanding at Beginning of Period | $1.06 |
Options Granted | $1.39 |
Options Exercised | $0.76 |
Options Expired | $0.87 |
Options Forfeited | $1 |
Outstanding at End of Period | $1.13 |
Exercisable at End of Period | $1.13 |
Weighted Average Remaining Contractual Term | |
Outstanding at Beginning of Period | 7 years 5 months 4 days |
Options granted | 10 years |
Outstanding at End of Period | 7 years |
Exercisable at End of Period | 6 years 4 months 24 days |
Aggregate Intrinsic Value | |
Aggregate Intrinsic Value outstanding | $581,050 |
Aggregate Intrinsic Value exercisable | $455,570 |
Employee_ShareBased_Compensati5
Employee Share-Based Compensation (Details 3) (Performance Based Stock Options [Member], USD $) | 12 Months Ended |
Jan. 03, 2015 | |
Performance Based Stock Options [Member] | |
Summary of performance based stock option activity- Shares | |
Outstanding at Beginning of Period | 200,000 |
Options Granted | |
Options Exercised | |
Options Expired | |
Options Forfeited | |
Outstanding at End of Period | 200,000 |
Exercisable at End of Period | 95,833 |
Weighted Average Exercise Price | |
Outstanding at Beginning of Period | $0.63 |
Options Granted | |
Options Exercised | |
Options Expired | |
Options Forfeited | |
Outstanding at End of Period | $0.63 |
Exercisable at End of Period | $0.63 |
Weighted Average Remaining Contractual Term | |
Outstanding at Beginning of Period | 9 years 29 days |
Outstanding at End of Period | 8 years 29 days |
Exercisable at End of Period | 8 years 29 days |
Aggregate Intrinsic Value | |
Outstanding at End of Period | $54,000 |
Exercisable at End of Period | $25,875 |
Employee_ShareBased_Compensati6
Employee Share-Based Compensation (Details 4) (Restricted Stock [Member], USD $) | 12 Months Ended | |
Jan. 03, 2015 | Dec. 28, 2013 | |
Summary of activity of restricted stock awards granted to employees- Shares | ||
Unvested shares at Beginning of Period | ||
Unvested shares at End of Period | 76,000 | |
Expected to Vest as of End of Period | 76,000 | |
Weighted Average Award-Date Fair Value | ||
Unvested shares at Beginning of Period | ||
Unvested shares at End of Period | $0.90 | |
Expected to Vest as of End of Period | $0.90 | |
Employee Stock Option [Member] | ||
Summary of activity of restricted stock awards granted to employees- Shares | ||
Unvested shares at Beginning of Period | 500,000 | |
Granted | 1,090,000 | |
Vested | ||
Forfeited | ||
Unvested shares at End of Period | 1,590,000 | |
Expected to Vest as of End of Period | 1,590,000 | |
Weighted Average Award-Date Fair Value | ||
Unvested shares at Beginning of Period | $0.69 | |
Granted | $1.41 | |
Vested | ||
Forfeited | ||
Unvested shares at End of Period | $1.18 | |
Expected to Vest as of End of Period | $1.18 |
Employee_ShareBased_Compensati7
Employee Share-Based Compensation (Details Narrative) (USD $) | 12 Months Ended | |
Jan. 03, 2015 | Dec. 28, 2013 | |
Employee Share-Based Compensation | ||
Closing stock price | $0.90 | |
Restricted stock issued | 1,090,000 | |
Restricted stock issued, value | $1,536,900 | |
General and Administrative Expense [Member] | ||
Employee Share-Based Compensation | ||
Recognized share based compensation expense (income) | 2,747,000 | 958,000 |
Options [Member] | ||
Employee Share-Based Compensation | ||
Expiration dates for stock options not exceeds | 10 years | |
Authorized stock options | 20.00% | |
Remaining amount available for issuance | 4,738,496 | |
Vesting period | 4 years | |
Unrecognized compensation expense | 1,768,000 | |
Cost is expected to be recognized over a weighted average period | 2 years 2 months 12 days | |
Realized tax benefit from stock options | 0 | 0 |
ServicePeriodBasedStockOptions [Member] | ||
Employee Share-Based Compensation | ||
Closing stock price | $0.90 | |
Aggregate intrinsic value of options exercised | $156,000 | $7,000 |
Weighted average fair value of options granted | $0.90 | $0.29 |
Performance Based Stock Options [Member] | ||
Employee Share-Based Compensation | ||
Closing stock price | $0.90 |
NonEmployee_ShareBased_Compens2
Non-Employee Share-Based Compensation (Details) (USD $) | 12 Months Ended |
Jan. 03, 2015 | |
Non-Employee Share-Based Compensation- Options | |
Outstanding at Beginning of Period | 847,300 |
Options Granted | 90,000 |
Options Classification from Employee to Non-Employee | 113,151 |
Options Exercised | |
Options Forfeited | |
Outstanding at End of Period | 1,050,451 |
Exercisable at End of Period | 971,701 |
Weighted Average Exercise Price | |
Outstanding at Beginning of Period | $1.44 |
Options Granted | $1.24 |
Options Classification from Employee to Non-Employee | $0.76 |
Options Exercised | |
Options Forfeited | |
Outstanding at End of Period | $1.35 |
Exercisable at End of Period | $1.36 |
Weighted Average Remaining Contractual Term | |
Outstanding at beginning of period | 5 years 8 months 26 days |
Options granted | 10 years |
Outstanding at End of Period | 5 years 5 months 15 days |
Exercisable at End of Period | 5 years 1 month 13 days |
Aggregate Intrinsic Value | |
Outstanding at End of Period | $37,550 |
Exercisable at End of Period | $37,550 |
NonEmployee_ShareBased_Compens3
Non-Employee Share-Based Compensation (Details 1) | 0 Months Ended | |
Oct. 27, 2014 | Sep. 29, 2014 | |
Non-Employee Warrant Award | ||
Volatility | 66.90% | 72.40% |
Expected dividends | 0.00% | 0.00% |
Expected term | 2 years | 5 years |
Risk-free rate | 0.41% | 1.76% |
NonEmployee_ShareBased_Compens4
Non-Employee Share-Based Compensation (Details 2) (Restricted Stock [Member], USD $) | 12 Months Ended | |
Jan. 03, 2015 | Dec. 28, 2013 | |
Summary of activity of restricted stock awards granted to Non-employees- Shares | ||
Unvested shares at Beginning of Period | ||
Unvested shares at End of Period | 76,000 | |
Expected to Vest as of End of Period | 76,000 | |
Weighted Average Award-Date Fair Value for Non-Employee Restricted Stock | ||
Unvested shares at Beginning of Period | ||
Unvested shares at End of Period | $0.90 | |
Expected to Vest as of End of Period | $0.90 | |
Nonemployees [Member] | ||
Summary of activity of restricted stock awards granted to Non-employees- Shares | ||
Granted | 96,000 | |
Vested | -20,000 | |
Forfeited | ||
Weighted Average Award-Date Fair Value for Non-Employee Restricted Stock | ||
Granted | $1.30 | |
Vested | $1.17 | |
Forfeited |
NonEmployee_ShareBased_Compens5
Non-Employee Share-Based Compensation (Details Narrative) (USD $) | 12 Months Ended | ||
Jan. 03, 2015 | Dec. 28, 2013 | Nov. 03, 2015 | |
Closing stock price | $0.90 | ||
Shares awarded during the period | $2,980,000 | ||
Fair value, stock award | 2,861,293 | 1,334,530 | |
Restricted Stock [Member] | Nonemployees [Member] | |||
Unrecognized expense | 68,000 | ||
Cost is expected to be recognized over a weighted average period | 3 years 2 months 12 days | ||
Fair value, stock award | 24,000 | ||
NonEmployee Share Based Compensation [Member] | Stock Options [Member] | |||
Aggregate intrinsic value, options exercised | 35,000 | ||
Unrecognized expense | 44,000 | ||
Cost is expected to be recognized over a weighted average period | 1 year 8 months 12 days | ||
NonEmployee Share Based Compensation [Member] | StockAward [Member] | |||
Unrecognized expense | 11,000 | ||
Cost is expected to be recognized over a weighted average period | 1 month | ||
Shares awarded during the period | 600,000 | ||
Compensation expense | 129,000 | 325,000 | |
NonEmployee Share Based Compensation [Member] | StockAward [Member] | StockAward 1 [Member] | |||
Cost is expected to be recognized over a weighted average period | 7 months | ||
Shares awarded during the period | 65,000 | ||
Fair value, stock award | 83,850 | ||
NonEmployee Shared Based Compensation [Member] | WarrantAward [Member] | |||
Unrecognized expense | 10,000 | ||
Cost is expected to be recognized over a weighted average period | 4 months | ||
Shares awarded during the period | 50,000 | ||
Exercise price | $1.10 | $0.75 | |
Warrant term | 2 years | ||
Compensation expense | 6,000 | 4,000 | |
Intrinsic value, warrant exercised | $90,507 |
Stock_Issuance_Details_Narrati
Stock Issuance (Details Narrative) (USD $) | 12 Months Ended | |||
Dec. 28, 2013 | Jan. 03, 2015 | Jun. 18, 2014 | Jun. 11, 2014 | |
Stock Issuance | ||||
Common stock issued | 104,524,738 | 105,271,058 | ||
Sale of common stock | 3,500,000 | |||
Proceeds from sale of common stock | $2,980,000 | |||
Placement agent fee | 20,000 | |||
Vendor [Member] | ||||
Stock Issuance | ||||
Common stock issued | 82,000 | 44,605 | ||
Common stock issued, value | 76,306 | 52,188 | ||
Monthly Retainer fees | $3,000 |
Warrants_Details
Warrants (Details) (USD $) | 12 Months Ended | |
Jan. 03, 2015 | Dec. 28, 2013 | |
Warrants Details | ||
Warrants outstanding at beginning of period | 10,056,914 | |
Warrants Issued | 469,020 | |
Warrants Exercised | -8,338,564 | |
Warrants Expired | -1,718,350 | |
Warrants outstanding at end of period | 469,020 | |
Warrants exercisable at end of period | ||
Weighted Average Exercise Price | ||
Outstanding at beginning of period | $0.72 | |
Warrants issued | $1.07 | |
Warrants exercised | $0.25 | |
Warrant expired | $3 | |
Outstanding at end of period | $1.07 | |
Exercisable at end of period | $1.07 | |
Remaining Contractual Term, beginning of period | 5 months 8 days | |
Weighted average contractual term, warrants issued | 4 years 8 months 4 days | |
Remaining Contractual Term, end of period | 4 years 5 months 4 days |
Warrants_Details_Narrative
Warrants (Details Narrative) (USD $) | 12 Months Ended | |
Jan. 03, 2015 | Dec. 28, 2013 | |
Closing stock price | $0.90 | |
Warrants issued/awarded | 469,020 | |
Hercules [Member] | ||
Warrants issued/awarded | 419,020 | |
Exercise price of warrant | $1.06 | |
Nonemployee [Member] | ||
Warrants issued/awarded | 50,000 | |
Exercise price of warrant | $1.10 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (USD $) | Jan. 03, 2015 |
Minimum Future Rental Payments | |
2015 | $544,000 |
2016 | 319,000 |
2017 | 225,000 |
2018 | 233,000 |
2019 | 181,000 |
Minimum future rental payments | $1,502,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details 1) (USD $) | Jan. 03, 2015 |
Minimum Future Royalties | |
2015 | $272,000 |
2016 | 283,000 |
2017 | 320,000 |
2018 | 339,000 |
2019 | 339,000 |
Minimum royalties including license maintenance fees | $1,552,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details Narrative) (USD $) | 12 Months Ended | |
Jan. 03, 2015 | Dec. 28, 2013 | |
Lease | ||
Rent expense | $537,000 | $519,000 |
Royalty | ||
Royalty expense including license maintenance fees | 323,000 | 111,000 |
Jaksch [Member] | ||
Severance payments to executive officers | ||
Employment agreement term | 3 years | |
Salary | 275,000 | |
Maximum Bonus target | 50.00% | |
Varvaro [Member] | ||
Severance payments to executive officers | ||
Employment agreement term | 3 years | |
Salary | 225,000 | |
Maximum Bonus target | 40.00% | |
Rhonemus [Member] | ||
Severance payments to executive officers | ||
Salary | 180,000 | |
Maximum Bonus target | 30.00% | |
Minimum [Member] | ||
Lease | ||
Monthly lease payment | 1,320 | |
Royalty | ||
Minimum yearly royalty payments | 5,000 | |
Royalty payable on sales | 2.00% | |
Maximum [Member] | ||
Lease | ||
Monthly lease payment | 22,788 | |
Royalty | ||
Minimum yearly royalty payments | 50,000 | |
Royalty maximum | $150,000 | |
Royalty payable on sales | 5.00% |
Business_Segmentation_and_Geog2
Business Segmentation and Geographical Distribution (Details) (USD $) | 12 Months Ended | |
Jan. 03, 2015 | Dec. 28, 2013 | |
Net sales | $15,313,179 | $10,160,964 |
Cost of sales | 9,987,514 | 7,027,828 |
Gross profit (loss) | 5,325,665 | 3,133,136 |
Sales and marketing | 2,136,584 | 2,357,605 |
General and administrative | 8,374,601 | 5,117,016 |
Loss from investment in affiliate | 45,829 | 44,961 |
Operating expenses | 10,557,014 | 7,519,582 |
Operating income (loss) | -5,231,349 | -4,386,446 |
CoreStandardsContractServices [Member] | ||
Net sales | 7,487,189 | 6,643,832 |
Cost of sales | 5,141,667 | 4,893,649 |
Gross profit (loss) | 2,345,522 | 1,750,183 |
Sales and marketing | 975,800 | 1,459,620 |
General and administrative | ||
Loss from investment in affiliate | ||
Operating expenses | 975,800 | 1,459,620 |
Operating income (loss) | 1,369,722 | 290,563 |
Ingredients Segment [Member] | ||
Net sales | 6,857,177 | 2,430,699 |
Cost of sales | 4,257,347 | 1,501,187 |
Gross profit (loss) | 2,599,830 | 929,512 |
Sales and marketing | 1,081,209 | 752,121 |
General and administrative | ||
Loss from investment in affiliate | ||
Operating expenses | 1,081,209 | 752,121 |
Operating income (loss) | 1,518,621 | 177,391 |
Regulatory Consulting [Member] | ||
Net sales | 968,813 | 1,146,718 |
Cost of sales | 588,500 | 632,037 |
Gross profit (loss) | 380,313 | 514,681 |
Sales and marketing | 79,575 | 14,705 |
General and administrative | ||
Loss from investment in affiliate | ||
Operating expenses | 79,575 | 14,705 |
Operating income (loss) | 300,738 | 499,976 |
Other Segment [Member] | ||
Net sales | -60,285 | |
Cost of sales | 955 | |
Gross profit (loss) | -61,240 | |
Sales and marketing | 131,159 | |
General and administrative | 8,374,601 | 5,117,016 |
Loss from investment in affiliate | 45,829 | 44,961 |
Operating expenses | 8,420,430 | 5,293,136 |
Operating income (loss) | ($8,420,430) | ($5,354,376) |
Business_Segmentation_and_Geog3
Business Segmentation and Geographical Distribution (Details1) (USD $) | Jan. 03, 2015 | Dec. 28, 2013 |
Total assets | $11,608,208 | $8,986,892 |
CoreStandardsContractServices [Member] | ||
Total assets | 3,220,518 | 2,952,270 |
Ingredients Segment [Member] | ||
Total assets | 3,757,073 | 1,083,856 |
Regulatory Consulting [Member] | ||
Total assets | 105,711 | 139,765 |
Other Segment [Member] | ||
Total assets | $4,524,906 | $4,811,001 |
Business_Segmentation_and_Geog4
Business Segmentation and Geographical Distribution (Details Narrative) (USD $) | 12 Months Ended | |
Jan. 03, 2015 | Dec. 28, 2013 | |
CoreStandardsContractServices [Member] | ||
Revenue from international sources | $1,756,000 | $1,488,000 |
Ingredients Segment [Member] | ||
Revenue from international sources | 35,000 | 22,000 |
Scientific Regulatory [Member] | ||
Revenue from international sources | $104,000 | $450,000 |
Subsequent_Events_Details_Narr
Subsequent Events (Details Narrative) (USD $) | 3 Months Ended |
Mar. 18, 2015 | |
Subsequent events | |
Common stock issued for services | 350,000 |
Brauser [Member] | |
Subsequent events | |
Stock options vested | 26,667 |
Stock options exercise price | 1.25 |
Shares of restricted stock vested | 250,000 |
Honig [Member] | |
Subsequent events | |
Stock options vested | 26,667 |
Stock options exercise price | 1.25 |
Shares of restricted stock vested | 250,000 |