Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Mar. 08, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | ChromaDex Corp. | ||
Entity Central Index Key | 1,386,570 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 30, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-30 | ||
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 | $ 144,800,000 | ||
Entity Common Stock, Shares Outstanding | 54,836,076 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 30, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash | $ 45,388,848 | $ 1,642,429 |
Trade receivables, net of allowance of $0.7 million and $1.1 million, repectively; receivables from Related Party: $1.0 million and $0, respectively | 5,337,868 | 5,852,030 |
Inventories | 5,796,281 | 7,912,630 |
Prepaid expenses and other assets | 655,321 | 311,539 |
Current assets held for sale | 0 | 18,315 |
Total current assets | 57,178,318 | 15,736,943 |
Leasehold Improvements and Equipment, net | 2,871,886 | 1,778,171 |
Deposits | 271,631 | 377,532 |
Receivable held at escrow | 750,358 | 0 |
Intangible assets, net | 1,651,407 | 486,226 |
Long-term investment, related party | 0 | 20,318 |
Noncurrent assets held for sale | 0 | 1,352,878 |
Total assets | 62,723,600 | 19,752,068 |
Current Liabilities | ||
Accounts payable | 3,718,407 | 5,978,288 |
Accrued expenses | 3,645,355 | 2,170,172 |
Current maturities of capital lease obligations | 195,533 | 255,461 |
Customer deposits and other | 314,335 | 389,010 |
Deferred rent, current | 114,304 | 76,219 |
Due to officer | 100,000 | 0 |
Total current liabilities | 8,087,934 | 8,869,150 |
Capital lease obligations, less current maturities | 310,089 | 343,589 |
Deferred rent, less current | 491,909 | 380,205 |
Noncurrent liabilities held for sale | 0 | 184,766 |
Total Liabilities | 8,889,932 | 9,777,710 |
Commitments and contingencies | ||
Stockholders' Equity | ||
Common stock, $.001 par value; authorized 150,000,000 shares; issued and outstanding 2017 54,696,741 shares and 2016 37,544,531 shares | 54,697 | 37,545 |
Additional paid-in capital | 110,380,163 | 55,160,387 |
Accumulated deficit | (56,601,192) | (45,223,574) |
Total stockholders' equity | 53,833,668 | 9,974,358 |
Total liabilities and stockholders' equity | $ 62,723,600 | $ 19,752,068 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts and returns | $ 700,000 | $ 1,100,000 |
Receivables from related party | $ 1,000,000 | $ 0 |
Common Stock, Par Value Per Share | $ .001 | $ 0.001 |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 |
Common Stock, Shares, Issued | 54,696,741 | 37,544,531 |
Common Stock, Shares, Outstanding | 54,696,741 | 37,544,531 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | ||
Income Statement [Abstract] | ||||
Sales, net | $ 21,201,482 | $ 21,664,648 | $ 17,884,886 | |
Cost of sales | 10,724,177 | 11,274,114 | 10,350,281 | |
Gross profit | 10,477,305 | 10,390,534 | 7,534,605 | |
Operating expenses: | ||||
Sales and marketing | 4,459,224 | 1,558,213 | 1,507,868 | |
Research and development | 4,007,381 | 2,522,768 | 891,601 | |
General and administrative | 17,641,889 | 9,214,763 | 7,201,231 | |
Other | 745,773 | 0 | 0 | |
Operating expenses | 26,854,267 | 13,295,744 | 9,600,700 | |
Operating loss | (16,376,962) | (2,905,210) | (2,066,095) | |
Nonoperating income (expense): | ||||
Interest expense, net | (152,784) | (333,286) | (566,917) | |
Loss on debt extinguishment | 0 | (313,099) | 0 | |
Nonoperating expenses | (152,784) | (646,385) | (566,917) | |
Loss before income taxes | (16,529,746) | (3,551,595) | (2,633,012) | |
Provision for taxes | 0 | 0 | (4,527) | |
Loss from continuing operations | (16,529,746) | (3,551,595) | (2,637,539) | |
Income (loss) from discontinued operations | (315,140) | 623,410 | (133,528) | |
Gain on sale of discontinued operations | 5,467,268 | 0 | 0 | |
Income (loss) from discontinued operations, net | 5,152,128 | 623,410 | (133,528) | |
Net loss | $ (11,377,618) | $ (2,928,185) | $ (2,771,067) | |
Basic and diluted earnings (loss) per common share: | ||||
Loss from continuing operations | $ (0.37) | $ (0.10) | $ (0.07) | |
Earnings (loss) from discontinued operations | 0.11 | 0.02 | (0.01) | |
Basic and diluted loss per common share | $ (0.26) | $ (0.08) | $ (0.08) | |
Basic and diluted weighted average common shares outstanding | [1] | 44,598,879 | 37,294,321 | 35,877,341 |
[1] | Includes approximately 0.5 million, 0.4 million and 0.4 million nonvested restricted stock for the years 2017, 2016 and 2015, respectively, which are participating securities that feature voting and dividend rights. |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning Balance, Shares at Jan. 03, 2015 | 35,090,352 | |||
Beginning Balance, Amount at Jan. 03, 2015 | $ 35,090 | $ 43,487,623 | $ (39,524,322) | $ 3,998,391 |
Issuance of common stock, net of offering costs, Shares | 533,334 | |||
Issuance of common stock, net of offering costs, Amount | $ 534 | 1,974,359 | $ 1,974,893 | |
Exercise of stock options, Shares | 40,236 | 0 | ||
Exercise of stock options, Amount | $ 40 | 94,806 | $ 94,846 | |
Vested restricted stock, Shares | 228,000 | |||
Vested restricted stock, Amount | $ 228 | (228) | 0 | |
Share-based compensation, Shares | 111,667 | |||
Share-based compensation, Amount | $ 112 | 1,977,499 | 1,977,611 | |
Net loss | (2,771,067) | (2,771,067) | ||
Ending Balance, Shares at Jan. 02, 2016 | 36,003,589 | |||
Ending Balance, Amount at Jan. 02, 2016 | $ 36,004 | 47,534,059 | (42,295,389) | 5,274,674 |
1 for 3 reverse stock split, isssuance due to fractional shares round up, Shares | 1,632 | |||
1 for 3 reverse stock split, isssuance due to fractional shares round up, Amount | $ 2 | (2) | 0 | |
Issuance of common stock, net of offering costs, Shares | 1,245,227 | |||
Issuance of common stock, net of offering costs, Amount | $ 1,245 | 5,716,230 | 5,717,475 | |
Exercise of stock options, Shares | 280,086 | |||
Exercise of stock options, Amount | $ 280 | 716,332 | 716,612 | |
Vested restricted stock, Shares | 13,997 | |||
Vested restricted stock, Amount | $ 14 | (14) | 0 | |
Share-based compensation, Amount | 1,193,782 | 1,193,782 | ||
Net loss | (2,928,185) | (2,928,185) | ||
Ending Balance, Shares at Dec. 31, 2016 | 37,544,531 | |||
Ending Balance, Amount at Dec. 31, 2016 | $ 37,545 | 55,160,387 | (45,223,574) | 9,974,358 |
Issuance of common stock, net of offering costs, Shares | 15,592,788 | |||
Issuance of common stock, net of offering costs, Amount | $ 15,593 | 47,578,626 | 47,594,219 | |
Exercise of stock options, Shares | 884,754 | |||
Exercise of stock options, Amount | $ 885 | 3,037,075 | 3,037,960 | |
Vested restricted stock, Shares | 674,668 | |||
Vested restricted stock, Amount | $ 674 | (674) | 0 | |
Share-based compensation, Amount | 4,604,749 | 4,604,749 | ||
Net loss | (11,377,618) | (11,377,618) | ||
Ending Balance, Shares at Dec. 30, 2017 | 54,696,741 | |||
Ending Balance, Amount at Dec. 30, 2017 | $ 54,697 | $ 110,380,163 | $ (56,601,192) | $ 53,833,668 |
Consolidated Statement of Stoc6
Consolidated Statement of Stockholders' Equity (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Statement of Stockholders' Equity [Abstract] | |||
Offering costs | $ 1,420,000 | $ 33,000 | $ 25,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Cash Flows From Operating Activities | |||
Net loss | $ (11,377,618) | $ (2,928,185) | $ (2,771,067) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation of leasehold improvements and equipment | 509,933 | 331,734 | 285,536 |
Amortization of intangibles | 206,208 | 87,826 | 45,014 |
Share-based compensation expense | 4,604,749 | 1,193,782 | 1,977,611 |
Allowance for doubtful trade receivables | (411,475) | 713,122 | 329,844 |
Gain from disposal of assets | (5,467,268) | 0 | 0 |
Loss from disposal of equipment | 4,649 | 7,114 | 19,643 |
Loss from impairment of intangibles | 0 | 0 | 19,495 |
Loss on debt extinguishment | 0 | 313,099 | 0 |
Non-cash financing costs | 120,759 | 110,161 | 188,442 |
Changes in operating assets and liabilities: | |||
Trade receivables | 937,093 | (4,114,561) | (873,726) |
Inventories | 2,177,263 | 240,851 | (4,439,458) |
Prepaid expenses and other assets | (296,312) | (133,855) | (82,124) |
Accounts payable | (2,363,653) | (245,670) | 2,772,350 |
Accrued expenses | 1,471,976 | 867,307 | 449,180 |
Customer deposits and other | (67,855) | 117,008 | 37,567 |
Deferred rent | 179,873 | 503,671 | (69,445) |
Due to officer | (32,500) | 0 | 0 |
Net cash used in operating activities | (9,804,178) | (2,936,596) | (2,111,138) |
Cash Flows From Investing Activities | |||
Proceeds from disposal of assets, net of transaction costs | 5,953,390 | 0 | 0 |
Purchases of leasehold improvements and equipment | (1,167,506) | (1,504,922) | (525,231) |
Purchases of intangible assets | (183,958) | (220,000) | (122,500) |
Net cash provided by (used in) investing activities | 4,601,926 | (1,724,922) | (647,731) |
Cash Flows From Financing Activities | |||
Proceeds from issuance of common stock, net of issuance costs | 46,594,216 | 5,717,474 | 1,974,893 |
Proceeds from exercise of stock options | 3,037,960 | 716,612 | 94,846 |
Proceeds from loan payable | 0 | 0 | 2,500,000 |
Payment of debt issuance cost | (75,178) | (176,836) | (15,000) |
Principal payments on loan payable | 0 | (5,000,000) | 0 |
Cash paid for debt extinguisment costs | 0 | (281,092) | 0 |
Principal payments on capital leases | (608,327) | (221,883) | (210,948) |
Net cash provided by financing activities | 48,948,671 | 754,275 | 4,343,791 |
Net increase (decrease) in cash | 43,746,419 | (3,907,243) | 1,584,922 |
Cash Beginning of Year | 1,642,429 | 5,549,672 | 3,964,750 |
Cash Ending of Year | 45,388,848 | 1,642,429 | 5,549,672 |
Supplemental Disclosures of Cash Flow Information | |||
Cash payments for interest | 57,024 | 261,738 | 427,591 |
Supplemental Schedule of Noncash Investing Activity | |||
Noncash consideration transferred for the acquisition of Healthspan Research LLC | 1,187,430 | 0 | 0 |
Capital lease obligation incurred for purchases of equipment | 514,899 | 156,655 | 303,933 |
Receivable from disposal of assets held at escrow | 750,000 | 0 | 0 |
Inventory supplied to Healthspan Research, LLC for equity interest, at cost | 0 | 20,318 | 0 |
Retirement of fully depreciated equipment - cost | 57,424 | 90,803 | 121,213 |
Retirement of fully depreciated equipment - accumulated depreciation | $ (57,424) | $ (90,803) | $ (121,213) |
Nature of Business and Liquidit
Nature of Business and Liquidity | 12 Months Ended |
Dec. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Business and Liquidity | Nature of business Liquidity The Company anticipates that its current cash, cash equivalents and cash to be generated from operations will be sufficient to meet its projected operating plans through at least March 16, 2019. The Company may, however, seek additional capital prior to March 16, 2019, both to meet its projected operating plans after March 16, 2019 and/or to fund its longer term strategic objectives. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 30, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant accounting policies are as follows: Basis of presentation: Change in Fiscal Year: Adopted Accounting Pronouncements Fiscal 2017 In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting to simplify the accounting for stock compensation. It focuses on income tax accounting, award classification, estimating forfeitures, and cash flow presentation. The Company adopted the amendments in this ASU effective as of January 1, 2017. The adoption of ASU 2016-09 did not have a material effect on our consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330) - Simplifying the Measurement of Inventory, which requires that inventories, other than those accounted for under Last-In-First-Out, will be reported at the lower of cost or net realizable value. Net realizable value is the estimated selling price less costs of completion, disposal and transportation. The Company adopted the amendments in this ASU effective as of January 1, 2017. The adoption of ASU 2015-11 did not have a material effect on our consolidated financial statements. Use of accounting estimates Revenue recognition Shipping and handling fees billed to customers and the cost of shipping and handling fees billed to customers are included in net sales. Shipping and handling fees billed to customers and the cost of shipping and handling fees billed to customers for the years ending December 30, 2017, December 31, 2016 and January 2, 2016 are as follows: 2017 2016 2015 Shipping and handling fees billed $ 137,000 $ 110,000 $ 113,000 Cost of shipping and handling fees billed $ 185,000 $ 108,000 $ 112,000 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 Trade accounts receivable, net 2017 2016 Allowances Related to Customer C $ 500,000 $ 800,000 Customer E - 198,000 Other Allowances 169,000 83,000 $ 669,000 $ 1,081,000 Trade accounts receivable are written off when deemed uncollectible. Recoveries of trade accounts receivable previously written off are recorded when received. Credit risk Inventories 2017 2016 Bulk ingredients $ 4,159,000 $ 7,044,000 Reference standards 1,027,000 1,033,000 Consumer Products - Finished Goods 503,000 - Consumer Products - Work in Process 249,000 - 5,938,000 8,077,000 Less valuation allowance 142,000 164,000 $ 5,796,000 $ 7,913,000 Our normal operating cycle for reference standards is currently longer than one year. The Company regularly reviews inventories on hand and reduces the carrying value for slow-moving and obsolete inventory, inventory not meeting quality standards and inventory subject to expiration. The reduction of the carrying value 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 Leasehold improvements and equipment, net 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. Customer deposits and other Income taxes 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 2014 to 2017, which statutes expire in 2018 to 2021, 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 December 30, 2017, the Company has no liability for unrecognized tax benefits. Research and development costs: Advertising: Share-based compensation The fair value of the Company’s stock options is estimated at the date of grant using the Black-Scholes based option valuation model. The volatility assumption is based on the historical volatility of the 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. For the expected term, the Company uses 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 to 90 days to exercise the share options; and (v) the share options are nontransferable and nonhedgeable. Market conditions that affect vesting of stock options are considered in the grant-date fair value. The issues surrounding the valuation for such awards can be complex and consideration needs to be given for how the market condition should be incorporated into the valuation of the award. The Company considers using other valuation techniques, such as Monte Carlo simulations based on a lattice approach, to value awards with market conditions. 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. Effective January 1, 2017, the Company made an election to recognize forfeitures when they occur as a result of the adoption of ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting to simplify the accounting for stock compensation. 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 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 carrying amounts reported in the balance sheet for capital lease obligations are present values of the obligations, excluding the interest portion. Recent accounting standards The Company will adopt ASU 2014-09, effective the first day of our fiscal year 2018, using the modified retrospective transition method. Under this method, the Company could elect to apply the cumulative effect method to either all contracts as of the date of initial application or only to contracts that are not complete as of that date. The Company elected to apply the modified retrospective method to contracts that are not complete as of the first day of our fiscal year 2018. In 2017, approximately $19.7 million of the Company's total revenue of $21.2 million, or 93% of the total revenue, was as a result of shipping physical goods to the customers. For such revenue streams which we ship physical goods, we believe that there will be a minimal impact compared to our current accounting policies as the duration of the contract term is short and it ends when control of the goods transfers to the customer. We also have a revenue stream which we provide regulatory consulting services to our clients. In 2017, our revenue from this stream was approximately $0.7 million, or 3% of the total revenue. For some of these services, we are currently recognizing revenue based on achievements of milestones as prescribed in the contracts with the customers. ASU 2014-09 states that an entity should recognize revenue over time by measuring the progress toward complete satisfaction of the performance obligation. This revenue stream will be impacted by the adoption of ASU 2014-09. We have begun the implementation process of adopting ASU 2014-09 and we do not believe there are any significant implementation matters that have not yet been addressed. We do not expect the adoption of ASU 2014-09 to have a material impact on our financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Public business entities should apply the amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted for all public business entities and all nonpublic business entities upon issuance. We are currently evaluating the impact of our pending adoption of ASU 2016-02 on our consolidated financial statements. |
Loss Per Share Applicable to Co
Loss Per Share Applicable to Common Stockholders | 12 Months Ended |
Dec. 30, 2017 | |
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 years ended December 30, 2017, December 31, 2016 and January 2, 2016. Years Ended 2017 2016 2015 Net loss $ (11,377,618 ) $ (2,928,185 ) $ (2,771,067 ) Basic and diluted loss per common share $ (0.26 ) $ (0.08 ) $ (0.08 ) Basic and diluted weighted average common shares outstanding (1): 44,598,879 37,294,321 35,877,341 Potentially dilutive securities (2): Stock options 6,534,167 5,210,334 5,244,918 Warrants 470,444 470,444 423,007 Convertible debt - - 257,798 (1) Includes approximately 0.5 million, 0.4 million and 0.4 million nonvested restricted stock for the years 2017, 2016 and 2015, 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. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible assets 2017 2016 Weighted Average Healthspan Research LLC Acquisition (See Note 9) $ 1,346,000 $ — 10 years License agreements and other 1,494,000 1,469,000 9 years Less accumulated depreciation (1,189,000 ) (983,000 ) $ 1,651,000 $ 486,000 Amortization Estimated aggregate amortization Years ending December: 2018 $ 233,000 2019 233,000 2020 228,000 2021 209,000 2022 171,000 Thereafter 577,000 $ 1,651,000 |
Leasehold Improvements and Equi
Leasehold Improvements and Equipment | 12 Months Ended |
Dec. 30, 2017 | |
Leasehold Improvements And Equipment | |
Leasehold Improvements and Equipment, Net | Leasehold improvements and 2017 2016 Useful Life Laboratory equipment $ 1,869,000 $ 1,142,000 10 years Leasehold improvements 1,699,000 1,332,000 Lesser of lease term or estimated useful life Computer equipment 511,000 400,000 3 to 5 years Furniture and fixtures 90,000 41,000 7 years Office equipment 18,000 10,000 10 years Construction in progress 131,000 170,000 4,318,000 3,095,000 Less accumulated depreciation 1,446,000 1,317,000 $ 2,872,000 $ 1,778,000 Depreciation expenses on leasehold improvements and equipment included in the consolidated statement of operations for the years ended December 30, 2017, December 31, 2016 and January 2, 2016 were approximately $510,000, $332,000 and $286,000, respectively. The Company leases equipment under capitalized lease obligations with a total cost of approximately $871,000 and $1,214,000 and accumulated amortization of $126,000 and $277,000 as of December 30, 2017 and December 31, 2016, respectively. |
Capitalized Lease Obligations
Capitalized Lease Obligations | 12 Months Ended |
Dec. 30, 2017 | |
Capitalized Lease Obligations | |
Capitalized Lease Obligations | Minimum future lease Year ending December: 2018 $ 236,000 2019 196,000 2020 126,000 2021 18,000 Total minimum lease payments 576,000 Less amount representing interest at a rate of approximately 9.8% per year 70,000 Present value of net minimum lease payments 506,000 Less current portion 196,000 Long-term obligations under capital leases $ 310,000 Interest expenses related to capital |
Line of Credit
Line of Credit | 12 Months Ended |
Dec. 30, 2017 | |
Line Of Credit | |
Line of Credit | On November 4, 2016, the Company entered into a business financing agreement (“Financing Agreement”) with Western Alliance Bank (“Western Alliance”), in order to establish a formula based revolving credit line pursuant to which the Company may borrow an aggregate principal amount of up to $5,000,000, subject to the terms and conditions of the Financing Agreement. As of December 30, 2017 and December 31, 2016, the Company did not have any outstanding loan payable from this line of credit arrangement. The interest rate will be calculated at a floating rate per month equal to (a) the greater of (i) 3.50% per year or (ii) the Prime Rate published in the Money Rates section of the Western Edition of The Wall Street Journal, or such other rate of interest publicly announced by Lender as its Prime Rate, plus (b) 2.50 percentage points, plus an additional 5.00 percentage points during any period that an event of default has occurred and is continuing. The Company’s obligations under the Financing Agreement are secured by a security interest in substantially all of the Company’s current and future personal property assets, including intellectual property. Any borrowings, interest or other fees or obligations that the Company owes Western Alliance pursuant to the Financing Agreement will be become due and payable on November 4, 2018. Debt Issuance Costs The Company incurred debt issuance costs of approximately $252,000 in connection with this line of credit arrangement and had an unamortized balance of approximately $115,000 as of December 30, 2017. For the line of credit arrangement, the Company has elected a policy to keep the debt issuance costs as an asset, regardless of whether an amount is drawn. The remaining unamortized deferred asset will be amortized over the remaining life of the line of credit arrangement. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 30, 2017 | |
Income Taxes | |
Income Taxes | The provision for income tax consists of following: 2017 2016 2015 Current Federal $ - $ - $ - State - - 4,527 Deferred (net of valuation allowance) Federal - - - State - - - Income tax provision $ - $ - $ 4,527 At December 30, 2017 and December 31, 2016, the Company maintained a full valuation allowance against the entire deferred income tax balance which resulted in an effective tax rates of 0%, 0% and 0.2% for years 2017, 2016 and 2015, respectively. At December 30, 2017 and December 31, 2016, we recorded a valuation allowance of $12.9 million and $15.5 million, respectively. The valuation allowance decreased by $2.6 million during 2017. A reconciliation of 2017 2016 2015 Federal income tax expense at statutory rate (34.0 )% (34.0 )% (34.0 )% State income tax, net of federal benefit (5.3 )% (5.3 )% (5.1 )% Permanent differences 7.6 % 8.4 % 5.7 % Change in tax rates 0 % (0.3 )% 0.7 % Changes of state net operating losses 1.3 % 1.8 % 17.4 % Change in stock options and restricted stock (1.3 )% 11.8 % 0.0 % Change in valuation allowance (23.1 )% 16.4 % 13.7 % Remeasurement of deferred taxes asset / liability 53.4 % - - Other 1.4 % 1.2 % 1.8 % Effective tax rate 0.0 % 0.0 % 0.2 % On December 22, 2017, new legislation was signed into law, informally titled the Tax Cuts and Jobs Act, which included, among other things, a provision to reduce the federal corporate income tax rate to 21%. Under ASC 740, Accounting for Income Taxes, the enactment of the Tax Act also requires companies, to recognize the effects of changes in tax laws and rates on deferred tax assets and liabilities and the retroactive effects of changes in tax laws in the period in which the new legislation is enacted. There is no further change to its assertion on maintaining a full valuation allowance against its U.S. deferred tax assets. The Company’s gross deferred tax assets have been revalued from 34% to 21% with a corresponding offset to the valuation allowance and any potential other taxes arising due to the Tax Act will result in reductions to its net operating loss carryforward and valuation allowance. Deferred tax assets of approximately $19.1 million have been revalued to approximately $13.0 million with a corresponding decrease to the Company’s valuation allowance. Upon completion of our 2017 U.S. income tax return in 2018 we may identify additional remeasurement adjustments to our recorded deferred tax liabilities and the one-time transition tax. We will continue to assess our provision for income taxes as future guidance is issued, but do not currently anticipate significant revisions will be necessary. Any such revisions will be treated in accordance with the measurement period guidance outlined in Staff Accounting Bulletin No. 118. The deferred income 2017 2016 Deferred tax assets: Net operating loss carryforward $ 9,963,000 $ 11,023,000 Capital loss carryforward - 811,000 Stock options and restricted stock 1,873,000 2,694,000 Inventory reserve 143,000 195,000 Allowance for doubtful accounts 183,000 425,000 Accrued expenses 674,000 487,000 Deferred revenue 19,000 13,000 Intangibles 27,000 29,000 Deferred rent 166,000 252,000 13,048,000 15,929,000 Less valuation allowance (12,904,000 ) (15,530,000 ) 144,000 399,000 Deferred tax liabilities: Leasehold improvements and equipment (9,000 ) (282,000 ) Prepaid expenses (135,000 ) (117,000 ) (144,000 ) (399,000 ) $ - $ - The Company has tax net operating loss carryforwards for federal and state income tax purposes of approximately $40.0 million and $29.6 million, respectively which begin to expire in the year ending December 31, 2023 and 2022, respectively. 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 has determined that the stock issued in the year of 2017 did not create a change in control under the Internal Revenue Code Section 382. 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 is currently not under examination by the Internal Revenue Service or any other jurisdictions for any tax years. The Company has not identified any uncertain tax positions requiring a reserve as of December 30, 2017 and December 31, 2016. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Asset acquisition On March 12, 2017, the Company acquired all of the outstanding equity interests of Healthspan from Robert Fried, Jeffrey Allen and Dr. Charles Brenner (the "Sellers"). Robert Fried is a member of the Board of Directors ("Board") of the Company, a position he has held since July 2015. Upon the closing of, and as consideration for, the acquisition, the Company issued an aggregate of 367,648 shares of the Company’s common stock to the Sellers. The fair value of these shares was approximately $1.0 million based on the closing price of $2.72 per share on March 12, 2017. Also on March 12, 2017, the Company appointed Robert Fried as President and Chief Strategy Officer, effective immediately. Mr. Fried continues to serve as a member of the Board, but resigned as a member of the Nominating and Corporate Governance Committee of the Board. Healthspan was formed in August 2015 to offer and sell finished bottle product TRU NIAGEN® directly to consumers through internet-based selling platforms. TRU NIAGEN® is currently the Company's leading product. Prior to the acquisition, the Company has supplied certain amount of NIAGEN® to Healthspan as a raw material inventory in exchange for a 4% equity interest in Healthspan. An additional 5% equity interest was received for granting certain exclusive rights to resell NIAGEN® prior to the total acquisition on March 12, 2017. This transaction was accounted for as an acquisition of assets. An intangible asset of approximately $1.35 million was recorded as a result of this acquisition, which is the difference of consideration transferred and the net amount of assets acquired and liabilities assumed. (A) Consideration transferred (B) Net amount of assets and liabilities Fair value Assets acquired Fair value Common Stock $ 1,000,000 Cash and cash equivalents $ 19,000 Transaction costs 178,000 Trade receivables 11,000 Previously held equity interest 20,000 Inventory 61,000 $ 1,198,000 Liabilities assumed Due to officer (132,000 ) Accounts payable (74,000 ) Credit card payable (30,000 ) Other accrued expenses (3,000 ) Consumer product business model, intangible asset (A) -(B) $ 1,346,000 Net assets $ (148,000 ) The acquired intangible asset is considered to have a useful life of 10 years. The expense is amortized using the straight-line method over the useful life and the Company recognized an amortization expense of approximately $109,000 for the year ended December 30, 2017. In cancellation of a loan owed by Healthspan to Mr. Fried prior to the acquisition, the Company repaid $32,500 to Mr. Fried on March 13, 2017 and also repaid $100,000 on March 9, 2018. No interest was paid for the $100,000 repaid on March 9, 2018. Sale of consumer products, related party During July 2017, the Company entered into an exclusivity agreement (the "Customer G Agreement") with Customer G, whereby the Company agreed to exclusively sell its TRU NIAGEN® dietary supplement product to Customer G in certain territories in Asia. During the year ended December 30, 2017, the Company sold approximately $4.1 million of TRU NIAGEN® dietary supplement product pursuant to the Customer G Agreement. As of December 30, 2017, the trade receivable from Customer G was approximately $1.0 million. Li Ka Shing, who beneficially owns more than 10% of the Company's common stock, beneficially owns approximately 30% of Entity A and Entity A beneficially owns approximately 75% of Customer G. In accordance with the Company's Related-Person Transactions Policy, the Audit Committee of the Company's Board of Directors ratified the terms of sales agreement with Customer G. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 30, 2017 | |
Discontinued Operations | |
Discontinued Operations | On September 5, 2017, the Company completed the sale of its operating assets that were used with the Company's quality verification program testing and analytical chemistry business for food and food related products (the "Lab Business") to Covance Laboratories Inc. ("Covance"). In consideration of the Lab Business sale, the Company received $6.75 million from Covance and additional cash consideration of $0.8 million is currently held in escrow to satisfy any potential indemnification claims by Covance. The Company was also eligible to receive an additional earnout payment from Covance in an amount equal to up to $1.0 million, tied to 2017 revenue of the Lab Business. However, 2017 revenue of the Lab Business came up short of the required threshold and this contingent consideration was not earned. The Company recorded a gain of approximately $5.5 million from the disposal. (A) Consideration received (C) Carrying value of the Lab Business Amount Assets disposed Carrying value Cash payment $ 6,750,000 Leasehold improvements and equipment, net $ 1,427,000 Cash payment held in escrow (1) 750,000 Prepaid expenses 11,000 Additional earnout payment - Deposits 20,000 $ 7,500,000 Liabilities disposed (B) Selling costs Deferred revenue (7,000 ) Amount Deferred rent (215,000 ) Legal $ 428,000 Financial consulting 250,000 Other 118,000 $ 796,000 Net assets $ 1,236,000 Gain from disposal (A) - (B) - (C) $ 5,468,000 (1) $750,000 is expected to be held in escrow until March 2019 to satisfy any indemnification claims. The sale of the Lab Business qualifies as a discontinued operation as the sale represents a strategic shift that has (or will have) a major effect on operations and financial results. The results of operations from the discontinued operations for the years ended December 30, 2017, December 31, 2016 and January 2, 2016 are as follows: Statements of Operations - Discontinued operations Years Ended December 30, 2017, December 31, 2016 and January 2, 2016 2017 2016 2015 Sales $ 2,820,631 $ 5,146,438 $ 4,129,254 Cost of sales 2,478,827 3,615,840 3,182,851 Gross profit 341,804 1,530,598 946,403 Operating expenses: Sales and marketing 482,134 692,376 818,920 General and administrative 150,171 178,446 215,220 Operating expenses 632,305 870,822 1,034,140 Operating income (loss) (290,501 ) 659,776 (87,737 ) Nonoperating income (expense): Interest expense, net (24,639 ) (36,366 ) (45,791 ) Nonoperating expenses (24,639 ) (36,366 ) (45,791 ) Income (loss) from discontinued operations $ (315,140 ) $ 623,410 $ (133,528 ) The assets and liabilities that are classified as held for sale as of December 31, 2016 are as follows: Dec. 31, 2016 Current assets held for sale Prepaid expenses $ 18,315 Leasehold Improvements and Equipment, net 1,333,203 Deposits 19,675 Total assets held for sale 1,371,193 Deferred rent 184,766 Total liabilities held for sale $ 184,766 Depreciation, capital expenditures and significant noncash investing activities of the discontinued operations for the years ended December 30, 2017, December 31, 2016 and January 2, 2016 are as follows: 2017 2016 2015 Depreciation $ 169,250 $ 254,755 $ 234,010 Purchase of leasehod improvements and equipment $ 111,232 $ 313,842 $ 190,632 Noncash investing activity Capital lease obligation incurred for the purchase of equipment $ - $ 156,655 $ 303,933 Retirement of fully depreciated equipment - cost $ 55,947 $ 76,050 $ 119,888 Retirement of fully depreciated equipment - accumulated depreciation $ (55,947 ) $ (76,050 ) $ (119,888 ) |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 30, 2017 | |
Employee Share-based Compensation | |
Share-Based Compensation | 11A. Employee Share-Based Compensation Stock Option Plans At the discretion of the Company’s On June 20, 2017, the stockholders of the Company approved the ChromaDex Corporation 2017 Equity Incentive Plan (the "2017 Plan"). The 2017 Plan is intended to be the successor to the ChromaDex Corporation Second Amended and Restated 2007 Equity Incentive Plan (the "2007 Plan"). Under the 2017 Plan, the Company is authorized to issue stock options that total no more than the sum of (i) 3,000,000 new shares, (ii) approximately 384,000 unallocated shares remaining available for the grant of new awards under the 2007 Plan, and (iii) any returned shares from the 2007 Plan or the 2017 Plan, such as forfeited, cancelled, or expired shares. Under both 2007 Plan and 2017 Plan, the total number of shares the Company may grant, excluding returned shares, was approximately 10.8 million shares. The remaining amount available for issuance under the 2017 Plan totaled approximately 1.4 million shares at December 30, 2017. General Vesting Conditions The stock option awards generally vest ratably over a three to four-year period following grant date after a passage of time. However, some stock option awards are market or performance based and vest based on certain triggering events established by the Compensation Committee, subject to approval by the Board of Directors. The fair value of the Company’s stock options that are not market based 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 December 30, 2017, December 31, 2016 and January 2, 2016. Year Ended December 2017 2016 2015 Expected term 6 years 6 years 6 years Volatility 72 % 73 % 76 % Dividend Yield 0 % 0 % 0 % Risk-free rate 2 % 1 % 2 % 1) Service Period Based Stock Options The majority of options granted by the Company are The following table Weighted Average Remaining Aggregate Number of Exercise Contractual Fair Intrinsic Shares Price Term Value Value Outstanding at January 3, 2015 4,241,386 $ 3.39 7.00 Options Granted 730,562 3.66 10.00 $ 2.28 Options Classification from Employee to Non-Employee (514,024 ) 2.79 7.78 Options Exercised (40,236 ) 2.37 $ 58,000 Options Forfeited (103,425 ) 3.93 Outstanding at January 2, 2016 4,314,263 $ 3.50 6.44 Options Granted 742,485 3.91 10.00 $ 2.49 Options Exercised (238,423 ) 2.67 $ 502,000 Options Expired (183,334 ) 4.50 Options Forfeited (353,840 ) 4.15 Outstanding at December 31, 2016 4,281,151 $ 3.52 6.36 $ 1,352,000 Options Granted 1,110,404 3.25 10.00 $ 2.07 Options Exercised (863,712 ) 2.42 $ 2,455,000 Options Expired (3,334 ) 4.50 Options Forfeited (73,483 ) 3.88 Outstanding at December 30, 2017 4,451,026 $ 4.45 5.76 $ 10,740,000 * Exercisable at December 30, 2017 2,937,613 $ 3.54 5.18 $ 7,230,000 * *The aggregate 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: Weighted Average Remaining Aggregate Number of Exercise Contractual Fair Intrinsic Shares Price Term Value Value Outstanding at January 3, 2015 66,668 $ 1.89 8.08 Options Granted - - Options Exercised - - Options Forfeited - - Outstanding at January 2, 2016 66,668 $ 1.89 7.08 Options Granted - - Options Exercised - - Options Forfeited - - Outstanding at December 31, 2016 66,668 $ 1.89 6.08 Options Granted - - Options Exercised - - Options Forfeited - - Outstanding at December 30, 2017 66,668 $ 1.89 5.08 $ 266,000 Exercisable at December 30, 2017 66,668 $ 1.89 5.08 $ 266,000 The aggregate intrinsic value in the table above are, based on the Company’s closing stock price of $5.88 on the last day of business for the period ended December 30, 2017. 3) Market Based Stock Options The Company also grants stock option awards that are market based which have vesting conditions associated with a service condition as well as performance of the Company's stock price. The following table summarizes market based stock options activity: Weighted Average Remaining Aggregate Number of Exercise Contractual Fair Intrinsic Shares Price Term Value Value Outstanding at December 31, 2016 - $ - - Options Granted 1,000,000 4.24 10.00 $ 3.04 Options Exercised - - Options Forfeited - - Outstanding at December 30, 2017 1,000,000 $ 4.24 9.24 $ 1,640,000 Exercisable at December 30, 2017 55,556 $ 4.24 9.24 $ 91,000 The aggregate intrinsic value in the table above are, based on the Company’s closing stock price of $5.88 on the last day of business for the period ended December 30, 2017. The fair value of 1,000,000 options granted during the period ended December 30, 2017 was measured using Monte Carlo simulations based on a lattice approach with following assumptions: Volatility: 67% Contractual Term: 10 years Risk Free Rate: 2.4% Cost of Equity: 15.7% For the contractual term, we are using 10 years as this is not a "plain vanilla" option. SEC Staff Accounting Bulletin No. 107 simplified method for estimating the expected term can be only used if the option is a "plain vanilla" option. As of December 30, 2017, there was approximately $5.7 million 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 2.5 years. 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 Weighted Average Award-Date Shares Fair Value Unvested shares at January 3, 2015 530,007 $ 3.54 Granted - - Vested (173,336 ) 4.23 Forfeited - - Unvested shares at January 2, 2016 356,671 $ 3.21 Granted - - Vested (6,668 ) 4.23 Forfeited - - Unvested shares at December 31, 2016 350,003 $ 3.20 Granted 500,000 5.08 Vested (666,668 ) 4.60 Forfeited - - Unvested shares at December 30, 2017 183,335 $ 3.25 Expected to Vest as of December 30, 2017 183,335 $ 3.25 During the year ended December 30, 2017, the Company granted 500,000 shares of restricted stock award to the Company's President and Chief Operating Officer Robert Fried, which vested during the year ended December 30, 2017. The expense for vested restricted stock was approximately $2.5 million and was recognized during the year ended December 30, 2017. During the year ended December 30, 2017, the Company's former Chief Financial Officer, Thomas Varvaro resigned and received immediate vesting of his unvested restricted stock of 166,668 shares. The expense for the vested restricted stock was approximately $525,000 and was recognized prior to the fiscal year 2015. During the years ended December 31, 2016 and January 2, 2016, several members of the Board resigned from the Board and received immediate vesting of their unvested restricted stock of 6,668 shares and 173,336 shares, respectively. The expense for the vested restricted stock was approximately $761,000 and was recognized all during the fiscal year ended January 3, 2015. Employee Option and Restricted Stock Compensation The Company recognized share-based compensation expense of approximately $4.4 million, $1.1 million and $1.5 million in general and administrative expenses in the statement of operations for the years ended December 30, 2017, December 31, 2016 and January 2, 2016, respectively. 11B. Non-Employee Share-Based Compensation Stock Option Plan The following table summarizes activity of stock options granted to non-employees: Weighted Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value Outstanding at January 3, 2015 350,158 $ 4.05 5.46 Options Granted - - Options Classification from Employee to Non-Employee 514,024 2.79 7.78 Options Exercised - - Options Forfeited - - Outstanding at January 2, 2016 864,182 $ 3.31 6.04 Options Granted 40,000 2.85 10.00 Options Exercised (41,667 ) 1.92 $ 98,000 Options Forfeited - - Outstanding at December 31, 2016 862,515 $ 3.35 5.23 Options Granted 175,000 4.89 10.00 Options Exercised (21,042 ) 3.88 $ 24,000 Options Forfeited - - Outstanding at December 30, 2017 1,016,473 $ 3.61 5.16 $ 2,361,000 * Exercisable at December 30, 2017 824,806 $ 3.35 4.15 $ 2,088,000 * The aggregate intrinsic values in the table above are, based on the Company’s closing stock price of $5.88 on the last day of business for the year ended December 30, 2017. 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 non-employees during the years ended December 30, 2017 and December 31, 2016. Year Ended December 2017 2016 2015 Contractual term 6 years 5 years N/A Volatility 69 % 73 % N/A Dividend yield 0 % 0 % N/A Risk-free rate 2 % 2 % N/A As of December 30, 2017, there was approximately $651,000 of total unrecognized compensation expense related to non-vested share-based compensation arrangements granted under the plans for non-employee stock options. That cost is expected to be recognized over a weighted average period of 2.4 years. Stock and Restricted Stock Awards 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 following table summarizes activity of restricted stock awards issued to non-employees: Weighted Average Shares Fair Value Unvested shares at January 3, 2015 25,333 $ 2.70 Granted 46,668 2.58 Vested (54,668 ) 3.63 Forfeited - - Unvested shares at January 2, 2016 17,333 $ 3.66 Granted - - Vested (7,333 ) 3.79 Forfeited - - Unvested shares at December 31, 2016 10,000 $ 3.31 Granted - - Vested (8,000 ) 3.63 Forfeited - - Unvested shares expected to vest at December 30, 2017 2,000 $ 5.88 As of December 30, 2017, there was approximately $12,000 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 2 months as of December 30, 2017. The Company did not award any stock grants to non-employees in 2017 and 2016. For the year ended January 2, 2016, the Company awarded 116,668 shares of the Company’s common stock to non-employees and recognized expenses of $361,000. Non-Employee Option, Stock and Restricted Stock Awards For non-employee share-based compensation, the Company recognized share-based compensation expense of approximately $171,000, $61,000 and $435,000 in general and administrative expenses in the statement of operations for the years ended December 30, 2017, December 31, 2016 and January 2, 2016, respectively. |
Stock Issuance
Stock Issuance | 12 Months Ended |
Dec. 30, 2017 | |
Stock Issuance | |
Stock Issuance | Fiscal year 2017 On April 26, 2017, the Company entered into a Securities Purchase Agreement with certain purchasers named therein, pursuant to which the Company agreed to sell and issue up to $25.0 million of its common stock at a purchase price of $2.60 per share in three tranches of approximately $3.5 million, $16.4 million and $5.1 million, respectively. All three tranches closed during the year ended December 30, 2017, whereby approximately 9.6 million shares were issued for proceeds of $23.7 million, net of offering costs. On November 3, 2017 the Company entered into a Securities Purchase Agreement for the sale of approximately $23.0 million of its common stock in a private placement, in return for which the purchasers received approximately 5.6 million shares at a per share price of $4.10. The private placement closed during the year ended December 30, 2017 and the Company received proceeds of $22.9 million, net of offering costs. Fiscal year 2016 On March 11, 2016, the Company entered into a Securities Purchase Agreement (the "March 2016 SPA") to raise $500,000 in a registered direct offering. Pursuant to the March 2016 SPA, the Company sold a total of 128,205 Units at a purchase price of $3.90 per Unit, with each Unit consisting of one share of the Company’s common stock and a warrant to purchase one half of a share of common stock (64,103 total) with an exercise price of $4.80 and a term of 3 years. The estimated fair value of the warrant was approximately $108,000 and the warrant was determined to be classified as equity. The fair value was estimated at the date of issuance using the Black-Scholes based valuation model. The table below outlines the assumptions for the warrant issued. March 11, 2016 Fair value of common stock $ 4.41 Contractual term 3.0 years Volatility 60 % Risk-free rate 1.16 % Expected dividends 0 % On June 3, 2016, the Company entered into securities purchase agreements to raise $5,250,000 in a registered direct offering, pursuant to which, the Company sold a total of 1,117,022 shares of the Company’s common stock at a purchase price of $4.70 per share. Fiscal year 2015 In Fiscal Year 2015, the Company entered into securities purchase agreements with certain existing stockholders to raise $2,000,000 in a registered direct offering. Pursuant to those securities purchase agreements, the Company sold a total of 200,000 Units at a purchase price of $10.00 per Unit, with each Unit consisting of 2.667 shares of the Company’s common stock and a warrant to purchase 1.333 shares of common stock (266,667 total) with an exercise price of $4.50 and a term of 3 years. The aggregate estimated fair value of the warrants was approximately $489,000 and these warrants were determined to be classified as equity. The fair value was estimated at the date of issuance using the Black-Scholes based valuation model. The table below outlines the assumptions for the warrants issued. November 9, 2015 Fair value of common stock $ 4.41 Contractual term 3.0 years Volatility 62 % Risk-free rate 1.27 % Expected dividends 0 % |
Warrants
Warrants | 12 Months Ended |
Dec. 30, 2017 | |
FairValueAssumptionsRiskFreeInterestRateStockIssuance | |
Warrants | The following table summarizes activity of warrants at December 30, 2017, December 31, 2016 and January 2, 2016 and changes during the years then ended: Weighted Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value Outstanding and exercisable at January 3, 2015 156,341 3.21 4.43 Warrants Issued 266,667 4.50 Warrants Exercised - - Warrants Expired - - Outstanding and exercisable at January 2, 2016 423,008 4.02 3.07 Warrants Issued 64,103 4.80 Warrants Exercised - - Warrants Expired (16,667 ) 3.30 Outstanding and exercisable at December 31, 2016 470,444 4.15 2.17 Warrants Issued - - Warrants Exercised - - Warrants Expired - - Outstanding and exercisable at December 30, 2017 470,444 $ 4.15 1.17 $ 814,000 The aggregate intrinsic values in the table above are based on the Company’s closing stock price of $5.88 on the last day of business for the year ended December 30, 2017. The fair values of warrants issued were estimated at the date of issuance using the Black-Scholes based valuation model. The table below outlines the weighted average assumptions for the warrants issued during the years ended December 31, 2016 and January 2, 2016. 2016 2015 Fair value of common stock $ 4.41 $ 4.41 Contractual term 3.0 years 3.0 years Volatility 60 % 62 % Risk-free rate 1.16 % 1.27 % Expected dividends 0 % 0 % |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 30, 2017 | |
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 September 2018 through February 2024. Monthly lease payments range from $1,500 per month to $24,000 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 as of December 30, 2017 are as follows: Fiscal years ending: 2018 $ 601,000 2019 590,000 2020 424,000 2021 340,000 2022 138,000 Thereafter 167,000 $ 2,260,000 Rent expense was approximately $729,000, $606,000 and $536,000 for the years ended December 30, 2017, December 31, 2016 and January 2, 2016, respectively. As of December 30, 2017, deferred rent from these operating lease agreements increased to $492,000 compared to $380,000 as of December 31, 2016. On July 6, 2017, the Company entered into a lease for an office space located in Los Angeles, California. Pursuant to the term of the lease, the landlord provided tenant improvements for approximately $122,000. The landlord provided lease incentive (a) has been recorded as leasehold improvement asset and is amortized over the lease term which is through September 2021; and (b) has been recorded as deferred rent and is amortized as reductions to lease expense over the lease term. Subsequent to the year ended December 30, 2017, the Company entered into a lease amendment to lease additional office space located in Los Angeles, California through October 2021. Pursuant to the lease, the Company will make additional monthly lease payments ranging from approximately $9,000 to $11,000, as the payments escalate during the term of the lease. Purchase obligations The Company enters into purchase obligations with various vendors for goods and services that we need for our operations. The purchase obligations for goods and services include inventory, research and development, and laboratory supplies. Minimum future payments under purchase obligations as of December 30, 2017 are as follows: Fiscal years ending: 2018 $ 3,489,000 2019 82,000 $ 3,571,000 Royalty The Company has 11 licensing agreements with leading research universities and other patent holders, 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 an estimated year of 2037. Yearly minimum royalty payments including license maintenance fees range from $10,000 per year to $83,000 per year, however, these minimum payments escalate each year with a maximum of $200,000 per year. In addition, the Company is required to pay a range of 2% to 8% of sales related to the licensed products under these agreements. Total royalty expenses including license maintenance fees from continuing operations for the years ended December 30, 2017, December 31, 2016 and January 2, 2016 were approximately $992,000, $773,000 and $583,000, respectively under these agreements. Minimum royalties including license maintenance fees for the next five years are as follows: Fiscal years ending: 2018 $ 446,000 2019 612,000 2020 467,000 2021 485,000 2022 450,000 $ 2,460,000 Legal proceedings On December 29, 2016, ChromaDex, Inc. filed a complaint (the “Complaint”) in the United States District Court for the Central District of California, naming Elysium Health, Inc. (together with Elysium Health, LLC, “Elysium”) as defendant. Among other allegations, ChromaDex, Inc. alleged in the Complaint that (i) Elysium breached the Supply Agreement, dated June 26, 2014, by and between ChromaDex, Inc. and Elysium (the “pTeroPure® Supply Agreement”), by failing to make payments to ChromaDex, Inc. for purchases of pTeroPure® pursuant to the pTeroPure® Supply Agreement, (ii) Elysium breached the Supply Agreement, dated February 3, 2014, by and between ChromaDex, Inc. and Elysium, as amended (the “NIAGEN® Supply Agreement”), by failing to make payments to ChromaDex, Inc. for purchases of NIAGEN® pursuant to the NIAGEN® Supply Agreement, (iii) Elysium breached the Trademark License and Royalty Agreement, dated February 3, 2014, by and between ChromaDex, Inc. and Elysium (the “License Agreement”), by failing to make payments to ChromaDex, Inc. for royalties due pursuant to the License Agreement and (iv) certain officers of Elysium made false promises and representations to induce ChromaDex, Inc. into providing large supplies of pTeroPure® and NIAGEN® to Elysium pursuant to the pTeroPure® Supply Agreement and NIAGEN® Supply Agreement. ChromaDex, Inc. is seeking punitive damages, money damages and interest. On January 25, 2017, Elysium filed an answer and counterclaims (the “Counterclaim”) in response to the Complaint. Among other allegations, Elysium alleges in the Counterclaim that (i) ChromaDex, Inc. breached the NIAGEN® Supply Agreement by not issuing certain refunds or credits to Elysium and for violating certain confidential information provisions, (ii) ChromaDex, Inc. breached the implied covenant of good faith and fair dealing pursuant to the NIAGEN® Supply Agreement, (iii) ChromaDex, Inc. breached certain confidential provisions of the pTeroPure® Supply Agreement, (iv) ChromaDex, Inc. fraudulently induced Elysium into entering into the License Agreement (the “Fraud Claim”), (v) ChromaDex, Inc.’s conduct constitutes misuse of its patent rights (the “Patent Claim”) and (vi) ChromaDex, Inc. has engaged in unlawful or unfair competition under California state law (the “Unfair Competition Claim”). Elysium is seeking damages for ChromaDex, Inc.’s alleged breaches of the NIAGEN® Supply Agreement and pTeroPure® Supply Agreement, and compensatory damages, punitive damages and/or rescission of the License Agreement and restitution of any royalty payments conveyed by Elysium pursuant to the License Agreement, and a declaratory judgment that ChromaDex, Inc. has engaged in patent misuse. On February 15, 2017, ChromaDex, Inc. filed an amended complaint. In the amended complaint, ChromaDex, Inc. re-alleges the claims in the Complaint, and also alleges that Elysium willfully and maliciously misappropriated ChromaDex, Inc.’s trade secrets. On February 15, 2017, ChromaDex, Inc. also filed a motion to dismiss the Fraud Claim, the Patent Claim and the Unfair Competition Claim. On March 1, 2017, Elysium filed a motion to dismiss ChromaDex, Inc.'s fraud and trade secret misappropriation causes of action. On March 6, 2017, Elysium filed a first amended counterclaim. On March 20, 2017, ChromaDex, Inc. moved to dismiss Elysium's amended fraud, declaratory judgment of patent misuse and the Unfair Competition Claim. On May 10, 2017, the court ruled on the motions to dismiss, denying ChromaDex, Inc.’s motion as to Elysium’s fraud and declaratory judgment claims and granting ChromaDex, Inc.’s motion with prejudice as to Elysium’s Unfair Competition Claim. With respect to Elysium’s motion, the court granted the motion with prejudice as to ChromaDex, Inc.’s fraud claim and granted with leave to amend the motion as to ChromaDex, Inc.’s trade secret misappropriation claims. On May 24, 2017, ChromaDex, Inc. answered the first amended counterclaim and asserted several affirmative defenses. Also on May 24, 2017, ChromaDex, Inc. filed a second amended complaint, amending the trade secret misappropriation claims and addressing Elysium’s declaratory judgment of patent misuse counterclaim. On June 7, 2017, ChromaDex, Inc. filed a third amended complaint dismissing the trade secret misappropriation claims and asserting two breach of contract claims for Elysium’s failure to pay for the product delivered. On June 16, 2017, Elysium answered the third amended complaint. On August 14, 2017, ChromaDex, Inc. moved for judgment on the pleadings as to Elysium’s declaratory judgment of patent misuse counterclaim. On September 26, 2017, the court denied ChromaDex’s motion without prejudice and directed Elysium to file an amended counterclaim if it intended to maintain its declaratory judgment counterclaim. On October 11, 2017, Elysium filed a second amended counterclaim, re-alleging the claims in the first amended counterclaim and adding a claim for unjust enrichment and restitution of the royalties Elysium paid to ChromaDex, Inc. pursuant to the License Agreement. On October 25, 2017, ChromaDex, Inc. filed a motion to dismiss the declaratory judgment of patent misuse and unjust enrichment claims and/or strike allegations in the unjust enrichment claim contained in the second amended counterclaim. On November 28, 2017, the court denied the motion. ChromaDex, Inc. answered the second amended counterclaim on December 12, 2017. The parties are currently in discovery. On July 17, 2017, Elysium filed petitions with the U.S. Patent and Trademark Office for inter partes review of U.S. Patent No. 8,197,807 (the “’807 Patent”) and 8,383,086 (the “’086 Patent”), patents to which ChromaDex, Inc. is the exclusive licensee. The U.S. Patent Trial and Appeal Board (“PTAB”) denied institution of an inter partes review for the ’807 Patent on January 18, 2018. For the ’086 patent, on January 29, 2018 the PTAB granted institution of an inter partes review as to claims 1, 3, 4, and 5 and denied institution as to claim 2. On September 27, 2017, Elysium Health Inc. ("Elysium Health") filed a complaint in the United States District Court for the Southern District of New York, against ChromaDex, Inc. (the “SDNY Complaint”). Elysium Health alleges in the SDNY Complaint that ChromaDex, Inc. made false and misleading statements in a citizen petition to the Food and Drug Administration it filed on or about August 18, 2017. Among other allegations, Elysium Health avers that the citizen petition made Elysium Health’s product appear dangerous, while casting ChromaDex, Inc.’s own product as safe. The SDNY Complaint asserts four claims for relief: (i) false advertising under the Lanham Act, 15 U.S.C. § 1125(a); (ii) trade libel; (iii) deceptive business practices under New York General Business Law § 349; and (iv) tortious interference with prospective economic relations. ChromaDex, Inc. denies the claims in the SDNY Complaint and intends to defend against them vigorously. On October 26, 2017, ChromaDex, Inc. moved to dismiss the SDNY Complaint on the grounds that, inter alia Noerr-Pennington On October 26, 2017, ChromaDex, Inc. filed a complaint in the United States District Court for the Southern District of New York against Elysium Health (the “ChromaDex SDNY Complaint”). ChromaDex alleges that Elysium Health made material false and misleading statements to consumers in the promotion, marketing, and sale of its health supplement product, Basis, and asserts five claims for relief: (i) false advertising under the Lanham Act, 15 U.S.C. §1125(a); (ii) unfair competition under 15 U.S.C. § 1125(a); (iii) deceptive practices under New York General Business Law § 349; (iv) deceptive practices under New York General Business Law § 350; and (v) tortious interference with prospective economic advantage. On November 16, 2017, Elysium Health moved to dismiss for failure to state a claim. ChromaDex, Inc. opposed the motion on November 30, 2017 and Elysium Health filed a reply on December 7, 2017. On November 3, 2017, the Court consolidated the SDNY Complaint and the ChromaDex SDNY Complaint actions under the caption In re Elysium Health-ChromaDex Litigation The Company is unable to predict the outcome of these matters and, at this time, cannot reasonably estimate the possible loss or range of loss with respect to the legal proceedings discussed herein. As of December 31, 2017, ChromaDex, Inc. did not accrue a potential loss for the Counterclaim or the SDNY Complaint because ChromaDex, Inc. believes that the allegations are without merit and thus it is not probable that a liability has been incurred. From time to time we are involved in legal proceedings arising in the ordinary course of our business. We believe that there is no other litigation pending that is likely to have, individually or in the aggregate, a material adverse effect on our financial condition or results of operations. Severance payments to named executive officers As of December 30, 2017, the Company has four named executive officers, Frank Jaksch, Jr., Chief Executive Officer, Robert Fried, President and Chief Operating Officer, Kevin Farr, Chief Financial Officer and Troy Rhonemus, Executive Vice President. Upon termination, Mr. Jaksch, Mr. Fried, Mr. Farr 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 “Jaksch Agreement”) with Frank L. Jaksch Jr. The Jaksch Agreement automatically renews unless terminated in accordance with its terms. On January 2, 2014, the Board approved raising the annual base salary of Mr. Jaksch to $275,000 per year and the annual cash bonus target up to 50% of his base salary. On March 14, 2016, the Board increased the base salary of Mr. Jaksch to $320,000. On April 25, 2016, Mr. Jaksch’s base salary increased to $370,000 as the Company’s common stock was listed on Nasdaq Stock Market. The severance terms provide that in the event Mr. Jaksch’s employment with the Company is terminated voluntarily, 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 for the bonus. In addition, if Mr. Jaksch leaves the Company for “Good Reason”, (as defined in Jaksch Agreement), he will also be entitled to severance equal to 50% of his salary, 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 up to 12 months paid salary. In the event the Company terminates Mr. Jaksch’s employment “without Cause” (as defined in the 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 until 24 months from the date of termination (the “Severance Period”), and he will receive a bonus of 50% of his base salary as well as the full vesting of any otherwise unvested stock awards. Employment Agreement with Robert Fried On March 12, 2017, the Company entered into an Employment Agreement (the "Fried Agreement") with Robert Fried. Mr. Fried is entitled to receive certain severance payments per the terms of the Fried Agreement. The key terms of the Fried Agreement, including the severance terms are as follows: Mr. Fried is entitled to: (i) an annual base salary of $300,000; (ii) an annual cash bonus equal to (a) 1% of net direct-to-consumer sales of products with nicotinamide riboside as a lead ingredient by the Company plus (b) 2% of direct to consumer net sales of products with nicotinamide riboside as a lead ingredient for the portion of such sales that exceeded prior year sales plus (c) 1% of the gross profit derived from nicotinamide riboside ingredient sales to dietary supplement producers; (iii) an option to purchase up to 500,000 shares of Common Stock under the 2007 Plan, subject to monthly vesting over a three-year period, which option grant Mr. Fried received on March 12, 2017; and (iv) 166,667 shares of restricted Common Stock, which vested on December 20, 2017 in connection with an amendment to the Fried Agreement (the "Fried Amendment") by and between the Company and Mr. Fried, dated December 20, 2017. In addition, Mr. Fried received 333,333 shares of restricted stock on December 20, 2017, which were immediately vested in connection with the Fried Amendment. Subject to Mr. Fried’s continuous service through such date, Mr. Fried is also eligible to receive up to 500,000 shares of fully-vested restricted Common Stock that will be granted upon the achievement of certain performance goals. The Fried Amendment also provides that Mr. Fried will be granted these shares of performance-based restricted Common Stock immediately prior to the consummation of a change in control of the Company, subject to Mr. Fried's continuous service through such change in control. Any unvested options or shares of restricted stock will vest in full upon (a) a change in control of the Company, (b) Mr. Fried’s death, (c) Mr. Fried’s disability, (d) termination by the Company of Mr. Fried’s employment without cause or (e) Mr. Fried’s resignation for good reason, subject in each case to Mr. Fried’s continuous service as an employee or consultant of the Company or any of its subsidiaries though such event. The severance terms of the Fried Agreement provide that if (i) Mr. Fried’s employment is terminated by the Company without cause, for death or disability, or Mr. Fried resigns for good reason, or (ii) (a) a change in control of the Company occurs and (b) within one month prior to the date of such change in control or twelve months after the date of such change in control Mr. Fried’s employment is terminated by the Company other than for cause, then, subject to executing a release, Mr. Fried will receive (w) continuation of his base salary for 12 months, (x) health care continuation coverage payments premiums for 12 months, (y) a prorated annual cash bonus earned for the fiscal year in which such termination or resignation occurs, and (z) an extended exercise period for his options. Employment Agreement with Kevin Farr On October 5, 2017, the Company entered into an Employee Agreement (the "Farr Agreement") with Kevin M. Farr who was appointed by the Board to serve as Chief Financial Officer, principal accounting officer and principal financial officer. Mr. Farr is entitled to receive certain severance payments per the terms of the Farr Agreement. The key terms of the Farr Agreement, including the severance terms are as follows: Mr. Farr is entitled to: (i) an annual base salary of $300,000 and (ii) a discretionary annual bonus based on the achievement of certain performance goals to be determined by the Board. Pursuant to the Farr Agreement, Mr. Farr also received an option to purchase up to 1,000,000 shares of ChromaDex common stock under the ChromaDex 2017 Equity Incentive Plan, subject to monthly vesting over a three-year period, with an exercise price equal to $4.24 per share. Any unvested options will vest in full (a) upon a change of control of the Company, subject to Mr. Farr’s continuous service through such change of control, (b) on the date (the “Price Threshold Date”) that the unweighted average closing price of the Company’s common stock as quoted on the Nasdaq Capital Market (or such similar established stock exchange) over the previous 20 trading days (including the date such calculation is measured) first equals or exceeds $10.00 per share, subject to Mr. Farr’s continuous service through such Price Threshold Date, or (c) if Mr. Farr is terminated by the Company without cause or if Mr. Farr resigns for good reason within 90 days prior to such change of control or Price Threshold Date. If Mr. Farr’s employment is terminated by the Company without cause or Mr. Farr resigns for good reason, then, subject to executing a release, Mr. Farr will receive (i) continuation of his base salary for 12 months, (ii) COBRA premiums for 12 months, (iii) a prorated annual cash bonus, based on the good faith determination of the Board of the actual results and period of employment during the year of such termination, (iv) accelerated vesting of time-based equity that would have otherwise become vested by the one year anniversary of such termination date and (v) an extended exercise period for his options. 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. On March 17, 2015, the Board increased the base salary to $190,000. The Rhonemus Agreement provides for an annual cash bonus (based on performance targets) of up to 30% of his base salary. On March 14, 2016, the Board increased the base salary of Mr. Rhonemus to $210,000. On April 25, 2016, Mr. Rhonemus’ base salary increased to $235,000 as the Company’s common stock was listed on Nasdaq Stock Market. On February 1, 2018, the Compensation Committee increased the base salary of Mr. Rhonemus to $250,000. In the event of a 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,” (as defined in the Rhonemus Agreement) 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 Geogr
Business Segmentation and Geographical Distribution | 12 Months Ended |
Dec. 30, 2017 | |
Intangible Assets Details | |
Business Segmentation and Geographical Distribution | Since the year ended December 31, 2016, the Company has made operational changes to merge its scientific and regulatory consulting segment into core standards and contract services segment. Additionally, with the acquisition of Healthspan in March 2017, the Company began selling consumer products that contain the Company's branded NIAGEN® ingredient. The Company made operational changes and began segregating its financial results for consumer products operations. As a result, the Company has the following three reportable segments: ● Ingredients segment develops and commercializes proprietary-based ingredient technologies and supplies these ingredients to consumers in finished products or as raw materials to the manufacturers of consumer products in various industries including the nutritional supplement, food and beverage and animal health industries. ● Consumer products segment provides directly to consumers as well as to distributors finished dietary supplement products that contain the Company's proprietary ingredients. ● Core standards and contract services segment includes (i) supply of phytochemical reference standards, (ii) scientific and regulatory consulting and (iii) other research and development services. On September 5, 2017, the Company completed the sale of the Lab Business which was a part of the core standards and contract services segment. The discontinued operations related to the Lab Business are not included in following statement of operations for business segments. The “Corporate and other” classification includes corporate items not allocated by the Company to each reportable segment. Further, there are no intersegment sales that require elimination. The Company evaluates performance and allocates resources based on reviewing gross margin by reportable segment. Year ended December 30, 2017 Ingredients Consumer Products Core Standards and Contract Services Corporate segment segment segment and other Total Net sales $ 11,153,371 $ 5,464,843 $ 4,583,268 $ - $ 21,201,482 Cost of sales 5,491,920 2,189,597 3,042,660 - 10,724,177 Gross profit 5,661,451 3,275,246 1,540,608 - 10,477,305 Operating expenses: Sales and marketing 1,280,004 2,672,810 506,410 - 4,459,224 Research and development 2,903,249 1,104,132 4,007,381 General and administrative - - - 17,641,889 17,641,889 Other 745,773 - - - 745,773 Operating expenses 4,929,026 3,776,942 506,410 17,641,889 26,854,267 Operating income (loss) $ 732,425 $ (501,696 ) $ 1,034,198 $ (17,641,889 ) $ (16,376,962 ) Year ended December 31, 2016 Ingredients Consumer Products Core Standards and Contract Services Corporate segment segment segment and other Total Net sales $ 16,774,641 $ - $ 4,890,007 $ - $ 21,664,648 Cost of sales 7,920,516 - 3,353,598 - 11,274,114 Gross profit 8,854,125 - 1,536,409 - 10,390,534 Operating expenses: Sales and marketing 1,196,711 - 361,502 - 1,558,213 Research and development 2,487,978 - 34,790 - 2,522,768 General and administrative - - - 9,214,763 9,214,763 Operating expenses 3,684,689 - 396,292 9,214,763 13,295,744 Operating income (loss) $ 5,169,436 $ - $ 1,140,117 $ (9,214,763 ) $ (2,905,210 ) Year ended January 2, 2016 Ingredients Consumer Products Core Standards and Contract Services Corporate segment segment segment and other Total Net sales $ 12,542,314 $ - $ 5,342,572 $ - $ 17,884,886 Cost of sales 6,664,164 - 3,686,117 - 10,350,281 Gross profit 5,878,150 - 1,656,455 - 7,534,605 Operating expenses: Sales and marketing 1,111,993 - 395,875 - 1,507,868 Research and development 891,601 - - - 891,601 General and administrative - - - 7,201,231 7,201,231 Operating expenses 2,003,594 - 395,875 7,201,231 9,600,700 Operating income (loss) $ 3,874,556 $ - $ 1,260,580 $ (7,201,231 ) $ (2,066,095 ) At December 30, 2017 Ingredients Consumer Products Core Standards and Contract Services Corporate segment segment segment and other Total Total assets $ 9,742,400 $ 3,398,800 $ 2,558,801 $ 47,023,599 $ 62,723,600 At December 31, 2016 Ingredients Consumer Products Core Standards and Contract Services Corporate segment segment segment and other Total Total assets $ 13,257,289 $ - $ 2,547,427 $ 3,947,352 $ 19,752,068 Revenues from international sources for the ingredients segment approximated $0.4 million, $0.5 million and $0.3 million for the years ended December 30, 2017, December 31, 2016 and January 2, 2016, respectively. Revenues from international sources for the consumer products segment approximated $4.2 million for the year ended December 30, 2017. Revenues from international sources for the core standards and contract services segment from continuing operations approximated $1.0 million, $1.6 million and $1.8 million for the years ended December 30, 2017, December 31, 2016 and January 2, 2016, respectively. International sources which the Company generates revenue from include Europe, North America, South America, Asia, and Oceania. The Company’s long-lived assets are located within the United States. Disclosure of major customers Major customers who accounted for more than 10% of the Company’s total sales from continuing operations were as follows: Years Ended Major Customers 2017 2016 2015 Customer G - Related Party 19.4 % * * Customer D 10.2 % 11.0 % * Customer C (1) * 23.9 % * Customer B * * 13.6 % * Represents less than 10%. (1) There is ongoing litigation with Customer C Major customers who accounted for more than 10% of the Company’s total trade receivables were as follows: Percentage of the Company's Total Trade Receivables Major Customers At December 30, 2017 At December 31, 2016 Customer G - Related Party 18.1 % * Customer D 13.4 % 10.2 % Customer C (1) 41.8 % 45.8 % * Represents less than 10%. (1) There is ongoing litigation with Customer C Disclosure of major vendors Major vendors who accounted for more than 10% of the Company's total accounts payable were as follows: Percentage of the Company's Total Accounts Payable Major Vendors At December 30, 2017 At December 31, 2016 Vendor A * 39.5 % Vendor B * 20.8 % Vendor C 14.5 % * Vendor D 10.4 % * Vendor E 10.3 % * * Represents less than 10%. |
Other Expense
Other Expense | 12 Months Ended |
Dec. 30, 2017 | |
Other Expense | |
Other Expense | Loss from an ongoing litigation, Elysium During the year ended December 30, 2017, the Company incurred a write-off of approximately $746,000 in gross trade receivable from Elysium related to royalties, due to inherent uncertainty about collecting all damages sought by the Company, as well as the Company’s decision to not seek damages for any unpaid royalty payments under the License Agreement in connection with the defense of Elysium’s claims for patent misuse and unjust enrichment. As a result of this write-off and after further analysis, the Company made an adjustment to the total allowance amount from ($800,000) to ($500,000). |
Quarterly Financial Information
Quarterly Financial Information (unaudited) | 12 Months Ended |
Dec. 30, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (unaudited) | Three Months Ended April 1, July 1, September 30, December 30, Sales, net $ 3,367,647 $ 4,218,310 $ 6,084,690 $ 7,530,836 Cost of sales 1,749,911 2,109,109 3,169,321 3,695,837 Gross profit 1,617,736 2,109,201 2,915,369 3,834,999 Operating expenses 3,390,625 4,758,708 6,092,153 12,612,782 Operating loss (1,772,889 ) (2,649,507 ) (3,176,784 ) (8,777,783 ) Nonoperating expenses (28,349 ) (35,894 ) (44,508 ) (44,033 ) Loss from continuing operations (1,801,238 ) (2,685,401 ) (3,221,292 ) (8,821,816 ) Income (loss) from discontinued operations (127,517 ) (78,723 ) 5,358,369 — Net income (loss) $ (1,928,755 ) $ (2,764,124 ) $ 2,137,077 $ (8,821,816 ) Basic earnings (loss) per common share $ (0.05 ) $ (0.07 ) $ 0.05 $ (0.17 ) Diluted earnings (loss) per common share $ (0.05 ) $ (0.07 ) $ 0.04 $ (0.17 ) Basic weighted average common shares outstanding 38,030,688 42,121,150 47,065,009 51,178,664 Diluted weighted average common shares outstanding 38,030,688 42,121,150 47,556,697 51,178,664 Three Months Ended April 2, 2016 July 2, 2016 October 1, 2016 December 31, 2016 Sales, net $ 5,852,109 $ 7,422,470 $ 3,937,286 $ 4,452,783 Cost of sales 3,008,391 3,748,684 2,074,325 2,442,714 Gross profit 2,843,718 3,673,786 1,862,961 2,010,069 Operating expenses 2,811,652 3,514,974 2,787,123 4,181,995 Operating income (loss) 32,066 158,812 (924,162 ) (2,171,926 ) Nonoperating expenses (177,350 ) (448,416 ) (2,260 ) (18,360 ) Provision for income taxes (10,740 ) 4,087 3,153 3,500 Loss from continuing operations (156,024 ) (285,517 ) (923,269 ) (2,186,786 ) Income (loss) from discontinued operations 411,649 202,850 (31,121 ) 40,033 Net income (loss) $ 255,625 $ (82,667 ) $ (954,390 ) $ (2,146,753 ) Basic earnings (loss) per common share $ 0.01 $ (0.00 ) $ (0.03 ) $ (0.06 ) Diluted earnings (loss) per common share $ 0.01 $ (0.00 ) $ (0.03 ) $ (0.06 ) Basic weighted average common shares outstanding 36,414,041 36,990,032 37,868,672 37,904,534 Diluted weighted average common shares outstanding 37,472,579 36,990,032 37,868,672 37,904,534 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent to the year ended December 30, 2017, the Board granted a total of 470,000 stock options at an exercise price of $5.85 per share and 500,000 stock options at an exercise price $5.65 per share to the Company's executive officers. |
Significant Accounting Polici26
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation: |
Change in fiscal year | Change in Fiscal Year: |
Adopted accounting pronouncements fiscal 2017 | Adopted Accounting Pronouncements Fiscal 2017 In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting to simplify the accounting for stock compensation. It focuses on income tax accounting, award classification, estimating forfeitures, and cash flow presentation. The Company adopted the amendments in this ASU effective as of January 1, 2017. The adoption of ASU 2016-09 did not have a material effect on our consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330) - Simplifying the Measurement of Inventory, which requires that inventories, other than those accounted for under Last-In-First-Out, will be reported at the lower of cost or net realizable value. Net realizable value is the estimated selling price less costs of completion, disposal and transportation. The Company adopted the amendments in this ASU effective as of January 1, 2017. The adoption of ASU 2015-11 did not have a material effect on our consolidated financial statements. |
Use of accounting estimates | Use of accounting estimates |
Revenue recognition | Revenue recognition Shipping and handling fees billed to customers and the cost of shipping and handling fees billed to customers are included in net sales. Shipping and handling fees billed to customers and the cost of shipping and handling fees billed to customers for the years ending December 30, 2017, December 31, 2016 and January 2, 2016 are as follows: 2017 2016 2015 Shipping and handling fees billed $ 137,000 $ 110,000 $ 113,000 Cost of shipping and handling fees billed $ 185,000 $ 108,000 $ 112,000 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 |
Trade accounts receivable, net | Trade accounts receivable, net 2017 2016 Allowances Related to Customer C $ 500,000 $ 800,000 Customer E - 198,000 Other Allowances 169,000 83,000 $ 669,000 $ 1,081,000 Trade accounts receivable are written off when deemed uncollectible. Recoveries of trade accounts receivable previously written off are recorded when received. |
Credit risk | Credit risk |
Inventories | Inventories 2017 2016 Bulk ingredients $ 4,159,000 $ 7,044,000 Reference standards 1,027,000 1,033,000 Consumer Products - Finished Goods 503,000 - Consumer Products - Work in Process 249,000 - 5,938,000 8,077,000 Less valuation allowance 142,000 164,000 $ 5,796,000 $ 7,913,000 Our normal operating cycle for reference standards is currently longer than one year. The Company regularly reviews inventories on hand and reduces the carrying value for slow-moving and obsolete inventory, inventory not meeting quality standards and inventory subject to expiration. The reduction of the carrying value 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 |
Leasehold improvements and equipment | Leasehold improvements and equipment, net 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. |
Customer deposits and other | Customer deposits and other |
Income taxes | Income taxes 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 2014 to 2017, which statutes expire in 2018 to 2021, 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 December 30, 2017, the Company has no liability for unrecognized tax benefits. |
Research and development costs | Research and development costs: |
Advertising | Advertising: |
Share-based compensation | Share-based compensation The fair value of the Company’s stock options is estimated at the date of grant using the Black-Scholes based option valuation model. The volatility assumption is based on the historical volatility of the 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. For the expected term, the Company uses 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 to 90 days to exercise the share options; and (v) the share options are nontransferable and nonhedgeable. Market conditions that affect vesting of stock options are considered in the grant-date fair value. The issues surrounding the valuation for such awards can be complex and consideration needs to be given for how the market condition should be incorporated into the valuation of the award. The Company considers using other valuation techniques, such as Monte Carlo simulations based on a lattice approach, to value awards with market conditions. 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. Effective January 1, 2017, the Company made an election to recognize forfeitures when they occur as a result of the adoption of ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting to simplify the accounting for stock compensation. 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 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 carrying amounts reported in the balance sheet for capital lease obligations are present values of the obligations, excluding the interest portion. |
Recent accounting standards | Recent accounting standards The Company will adopt ASU 2014-09, effective the first day of our fiscal year 2018, using the modified retrospective transition method. Under this method, the Company could elect to apply the cumulative effect method to either all contracts as of the date of initial application or only to contracts that are not complete as of that date. The Company elected to apply the modified retrospective method to contracts that are not complete as of the first day of our fiscal year 2018. In 2017, approximately $19.7 million of the Company's total revenue of $21.2 million, or 93% of the total revenue, was as a result of shipping physical goods to the customers. For such revenue streams which we ship physical goods, we believe that there will be a minimal impact compared to our current accounting policies as the duration of the contract term is short and it ends when control of the goods transfers to the customer. We also have a revenue stream which we provide regulatory consulting services to our clients. In 2017, our revenue from this stream was approximately $0.7 million, or 3% of the total revenue. For some of these services, we are currently recognizing revenue based on achievements of milestones as prescribed in the contracts with the customers. ASU 2014-09 states that an entity should recognize revenue over time by measuring the progress toward complete satisfaction of the performance obligation. This revenue stream will be impacted by the adoption of ASU 2014-09. We have begun the implementation process of adopting ASU 2014-09 and we do not believe there are any significant implementation matters that have not yet been addressed. We do not expect the adoption of ASU 2014-09 to have a material impact on our financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). ASU 2016-02 requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. Public business entities should apply the amendments in ASU 2016-02 for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted for all public business entities and all nonpublic business entities upon issuance. We are currently evaluating the impact of our pending adoption of ASU 2016-02 on our consolidated financial statements. |
Significant Accounting Polici27
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Accounting Policies [Abstract] | |
Shipping and handling fees | 2017 2016 2015 Shipping and handling fees billed $ 137,000 $ 110,000 $ 113,000 Cost of shipping and handling fees billed $ 185,000 $ 108,000 $ 112,000 |
Doubtful receivables | 2017 2016 Allowances Related to Customer C $ 500,000 $ 800,000 Customer E - 198,000 Other Allowances 169,000 83,000 $ 669,000 $ 1,081,000 |
Inventories | 2017 2016 Bulk ingredients $ 4,159,000 $ 7,044,000 Reference standards 1,027,000 1,033,000 Consumer Products - Finished Goods 503,000 - Consumer Products - Work in Process 249,000 - 5,938,000 8,077,000 Less valuation allowance 142,000 164,000 $ 5,796,000 $ 7,913,000 |
Loss Per Share Applicable to 28
Loss Per Share Applicable to Common Stockholders (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Earnings Per Share Tables | |
Earnings Per Share | Years Ended 2017 2016 2015 Net loss $ (11,377,618 ) $ (2,928,185 ) $ (2,771,067 ) Basic and diluted loss per common share $ (0.26 ) $ (0.08 ) $ (0.08 ) Basic and diluted weighted average common shares outstanding (1): 44,598,879 37,294,321 35,877,341 Potentially dilutive securities (2): Stock options 6,534,167 5,210,334 5,244,918 Warrants 470,444 470,444 423,007 Convertible debt - - 257,798 (1) Includes approximately 0.5 million, 0.4 million and 0.4 million nonvested restricted stock for the years 2017, 2016 and 2015, 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. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Intangible Assets Tables | |
Intangible assets | 2017 2016 Weighted Average Healthspan Research LLC Acquisition (See Note 9) $ 1,346,000 $ — 10 years License agreements and other 1,494,000 1,469,000 9 years Less accumulated depreciation (1,189,000 ) (983,000 ) $ 1,651,000 $ 486,000 |
Estimated aggregate amortization expense | Years ending December: 2018 $ 233,000 2019 233,000 2020 228,000 2021 209,000 2022 171,000 Thereafter 577,000 $ 1,651,000 |
Leasehold Improvements and Eq30
Leasehold Improvements and Equipment (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Leasehold Improvements And Equipment | |
Leasehold Improvements and Equipment | 2017 2016 Useful Life Laboratory equipment $ 1,869,000 $ 1,142,000 10 years Leasehold improvements 1,699,000 1,332,000 Lesser of lease term or estimated useful life Computer equipment 511,000 400,000 3 to 5 years Furniture and fixtures 90,000 41,000 7 years Office equipment 18,000 10,000 10 years Construction in progress 131,000 170,000 4,318,000 3,095,000 Less accumulated depreciation 1,446,000 1,317,000 $ 2,872,000 $ 1,778,000 |
Capitalized Lease Obligations (
Capitalized Lease Obligations (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Capitalized Lease Obligations Tables | |
Minimum future lease payments | Year ending December: 2018 $ 236,000 2019 196,000 2020 126,000 2021 18,000 Total minimum lease payments 576,000 Less amount representing interest at a rate of approximately 9.8% per year 70,000 Present value of net minimum lease payments 506,000 Less current portion 196,000 Long-term obligations under capital leases $ 310,000 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Income Taxes Tables | |
Provision for income tax | 2017 2016 2015 Current Federal $ - $ - $ - State - - 4,527 Deferred (net of valuation allowance) Federal - - - State - - - Income tax provision $ - $ - $ 4,527 |
Reconciliation of income tax expense (benefit) | 2017 2016 2015 Federal income tax expense at statutory rate (34.0 )% (34.0 )% (34.0 )% State income tax, net of federal benefit (5.3 )% (5.3 )% (5.1 )% Permanent differences 7.6 % 8.4 % 5.7 % Change in tax rates 0 % (0.3 )% 0.7 % Changes of state net operating losses 1.3 % 1.8 % 17.4 % Change in stock options and restricted stock (1.3 )% 11.8 % 0.0 % Change in valuation allowance (23.1 )% 16.4 % 13.7 % Remeasurement of deferred taxes asset / liability 53.4 % - - Other 1.4 % 1.2 % 1.8 % Effective tax rate 0.0 % 0.0 % 0.2 % |
Deferred income tax assets and liabilities | 2017 2016 Deferred tax assets: Net operating loss carryforward $ 9,963,000 $ 11,023,000 Capital loss carryforward - 811,000 Stock options and restricted stock 1,873,000 2,694,000 Inventory reserve 143,000 195,000 Allowance for doubtful accounts 183,000 425,000 Accrued expenses 674,000 487,000 Deferred revenue 19,000 13,000 Intangibles 27,000 29,000 Deferred rent 166,000 252,000 13,048,000 15,929,000 Less valuation allowance (12,904,000 ) (15,530,000 ) 144,000 399,000 Deferred tax liabilities: Leasehold improvements and equipment (9,000 ) (282,000 ) Prepaid expenses (135,000 ) (117,000 ) (144,000 ) (399,000 ) $ - $ - |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Related Party Transactions Tables | |
Net amount of assets and liabilities acquired | (A) Consideration transferred (B) Net amount of assets and liabilities Fair value Assets acquired Fair value Common Stock $ 1,000,000 Cash and cash equivalents $ 19,000 Transaction costs 178,000 Trade receivables 11,000 Previously held equity interest 20,000 Inventory 61,000 $ 1,198,000 Liabilities assumed Due to officer (132,000 ) Accounts payable (74,000 ) Credit card payable (30,000 ) Other accrued expenses (3,000 ) Consumer product business model, intangible asset (A) -(B) $ 1,346,000 Net assets $ (148,000 ) |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Discontinued Operations Tables | |
Discontinued operations | (A) Consideration received (C) Carrying value of the Lab Business Amount Assets disposed Carrying value Cash payment $ 6,750,000 Leasehold improvements and equipment, net $ 1,427,000 Cash payment held in escrow (1) 750,000 Prepaid expenses 11,000 Additional earnout payment - Deposits 20,000 $ 7,500,000 Liabilities disposed (B) Selling costs Deferred revenue (7,000 ) Amount Deferred rent (215,000 ) Legal $ 428,000 Financial consulting 250,000 Other 118,000 $ 796,000 Net assets $ 1,236,000 Gain from disposal (A) - (B) - (C) $ 5,468,000 (1) $750,000 is expected to be held in escrow until March 2019 to satisfy any indemnification claims. The sale of the Lab Business qualifies as a discontinued operation as the sale represents a strategic shift that has (or will have) a major effect on operations and financial results. The results of operations from the discontinued operations for the years ended December 30, 2017, December 31, 2016 and January 2, 2016 are as follows: Statements of Operations - Discontinued operations Years Ended December 30, 2017, December 31, 2016 and January 2, 2016 2017 2016 2015 Sales $ 2,820,631 $ 5,146,438 $ 4,129,254 Cost of sales 2,478,827 3,615,840 3,182,851 Gross profit 341,804 1,530,598 946,403 Operating expenses: Sales and marketing 482,134 692,376 818,920 General and administrative 150,171 178,446 215,220 Operating expenses 632,305 870,822 1,034,140 Operating income (loss) (290,501 ) 659,776 (87,737 ) Nonoperating income (expense): Interest expense, net (24,639 ) (36,366 ) (45,791 ) Nonoperating expenses (24,639 ) (36,366 ) (45,791 ) Income (loss) from discontinued operations $ (315,140 ) $ 623,410 $ (133,528 ) The assets and liabilities that are classified as held for sale as of December 31, 2016 are as follows: Dec. 31, 2016 Current assets held for sale Prepaid expenses $ 18,315 Leasehold Improvements and Equipment, net 1,333,203 Deposits 19,675 Total assets held for sale 1,371,193 Deferred rent 184,766 Total liabilities held for sale $ 184,766 Depreciation, capital expenditures and significant noncash investing activities of the discontinued operations for the years ended December 30, 2017, December 31, 2016 and January 2, 2016 are as follows: 2017 2016 2015 Depreciation $ 169,250 $ 254,755 $ 234,010 Purchase of leasehod improvements and equipment $ 111,232 $ 313,842 $ 190,632 Noncash investing activity Capital lease obligation incurred for the purchase of equipment $ - $ 156,655 $ 303,933 Retirement of fully depreciated equipment - cost $ 55,947 $ 76,050 $ 119,888 Retirement of fully depreciated equipment - accumulated depreciation $ (55,947 ) $ (76,050 ) $ (119,888 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Employee Share-based Compensation Tables | |
Weighted average assumptions of stock options granted | Year Ended December 2017 2016 2015 Expected term 6 years 6 years 6 years Volatility 72 % 73 % 76 % Dividend Yield 0 % 0 % 0 % Risk-free rate 2 % 1 % 2 % |
Service Period Based Stock Options | Weighted Average Remaining Aggregate Number of Exercise Contractual Fair Intrinsic Shares Price Term Value Value Outstanding at January 3, 2015 4,241,386 $ 3.39 7.00 Options Granted 730,562 3.66 10.00 $ 2.28 Options Classification from Employee to Non-Employee (514,024 ) 2.79 7.78 Options Exercised (40,236 ) 2.37 $ 58,000 Options Forfeited (103,425 ) 3.93 Outstanding at January 2, 2016 4,314,263 $ 3.50 6.44 Options Granted 742,485 3.91 10.00 $ 2.49 Options Exercised (238,423 ) 2.67 $ 502,000 Options Expired (183,334 ) 4.50 Options Forfeited (353,840 ) 4.15 Outstanding at December 31, 2016 4,281,151 $ 3.52 6.36 $ 1,352,000 Options Granted 1,110,404 3.25 10.00 $ 2.07 Options Exercised (863,712 ) 2.42 $ 2,455,000 Options Expired (3,334 ) 4.50 Options Forfeited (73,483 ) 3.88 Outstanding at December 30, 2017 4,451,026 $ 4.45 5.76 $ 10,740,000 * Exercisable at December 30, 2017 2,937,613 $ 3.54 5.18 $ 7,230,000 * *The aggregate |
Performance Based Stock Options | Weighted Average Remaining Aggregate Number of Exercise Contractual Fair Intrinsic Shares Price Term Value Value Outstanding at January 3, 2015 66,668 $ 1.89 8.08 Options Granted - - Options Exercised - - Options Forfeited - - Outstanding at January 2, 2016 66,668 $ 1.89 7.08 Options Granted - - Options Exercised - - Options Forfeited - - Outstanding at December 31, 2016 66,668 $ 1.89 6.08 Options Granted - - Options Exercised - - Options Forfeited - - Outstanding at December 30, 2017 66,668 $ 1.89 5.08 $ 266,000 Exercisable at December 30, 2017 66,668 $ 1.89 5.08 $ 266,000 |
Market Based Stock Options | Weighted Average Remaining Aggregate Number of Exercise Contractual Fair Intrinsic Shares Price Term Value Value Outstanding at December 31, 2016 - $ - - Options Granted 1,000,000 4.24 10.00 $ 3.04 Options Exercised - - Options Forfeited - - Outstanding at December 30, 2017 1,000,000 $ 4.24 9.24 $ 1,640,000 Exercisable at December 30, 2017 55,556 $ 4.24 9.24 $ 91,000 |
Market Based Stock Options assumptions | Volatility: 67% Contractual Term: 10 years Risk Free Rate: 2.4% Cost of Equity: 15.7% |
Restricted stock awards granted to employees | Weighted Average Award-Date Shares Fair Value Unvested shares at January 3, 2015 530,007 $ 3.54 Granted - - Vested (173,336 ) 4.23 Forfeited - - Unvested shares at January 2, 2016 356,671 $ 3.21 Granted - - Vested (6,668 ) 4.23 Forfeited - - Unvested shares at December 31, 2016 350,003 $ 3.20 Granted 500,000 5.08 Vested (666,668 ) 4.60 Forfeited - - Unvested shares at December 30, 2017 183,335 $ 3.25 Expected to Vest as of December 30, 2017 183,335 $ 3.25 |
Non-Employee stock options | Weighted Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value Outstanding at January 3, 2015 350,158 $ 4.05 5.46 Options Granted - - Options Classification from Employee to Non-Employee 514,024 2.79 7.78 Options Exercised - - Options Forfeited - - Outstanding at January 2, 2016 864,182 $ 3.31 6.04 Options Granted 40,000 2.85 10.00 Options Exercised (41,667 ) 1.92 $ 98,000 Options Forfeited - - Outstanding at December 31, 2016 862,515 $ 3.35 5.23 Options Granted 175,000 4.89 10.00 Options Exercised (21,042 ) 3.88 $ 24,000 Options Forfeited - - Outstanding at December 30, 2017 1,016,473 $ 3.61 5.16 $ 2,361,000 * Exercisable at December 30, 2017 824,806 $ 3.35 4.15 $ 2,088,000 * |
Non-Employee stock options assumptions | Year Ended December 2017 2016 2015 Contractual term 6 years 5 years N/A Volatility 69 % 73 % N/A Dividend yield 0 % 0 % N/A Risk-free rate 2 % 2 % N/A |
Restricted stock award activity | Weighted Average Shares Fair Value Unvested shares at January 3, 2015 25,333 $ 2.70 Granted 46,668 2.58 Vested (54,668 ) 3.63 Forfeited - - Unvested shares at January 2, 2016 17,333 $ 3.66 Granted - - Vested (7,333 ) 3.79 Forfeited - - Unvested shares at December 31, 2016 10,000 $ 3.31 Granted - - Vested (8,000 ) 3.63 Forfeited - - Unvested shares expected to vest at December 30, 2017 2,000 $ 5.88 |
Stock Issuance (Tables)
Stock Issuance (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Stock Issuance Tables | |
Warrant assumptions | March 11, 2016 Fair value of common stock $ 4.41 Contractual term 3.0 years Volatility 60 % Risk-free rate 1.16 % Expected dividends 0 % November 9, 2015 Fair value of common stock $ 4.41 Contractual term 3.0 years Volatility 62 % Risk-free rate 1.27 % Expected dividends 0 % |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Warrants Tables | |
Warrants | Weighted Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value Outstanding and exercisable at January 3, 2015 156,341 3.21 4.43 Warrants Issued 266,667 4.50 Warrants Exercised - - Warrants Expired - - Outstanding and exercisable at January 2, 2016 423,008 4.02 3.07 Warrants Issued 64,103 4.80 Warrants Exercised - - Warrants Expired (16,667 ) 3.30 Outstanding and exercisable at December 31, 2016 470,444 4.15 2.17 Warrants Issued - - Warrants Exercised - - Warrants Expired - - Outstanding and exercisable at December 30, 2017 470,444 $ 4.15 1.17 $ 814,000 |
Warrant assumptions | 2016 2015 Fair value of common stock $ 4.41 $ 4.41 Contractual term 3.0 years 3.0 years Volatility 60 % 62 % Risk-free rate 1.16 % 1.27 % Expected dividends 0 % 0 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Commitments Tables | |
Minimum future rental payments | Fiscal years ending: 2018 $ 601,000 2019 590,000 2020 424,000 2021 340,000 2022 138,000 Thereafter 167,000 $ 2,260,000 |
Purchase obligations | Fiscal years ending: 2018 $ 3,489,000 2019 82,000 $ 3,571,000 |
Minimum royalties including license maintenance fees | Fiscal years ending: 2018 $ 446,000 2019 612,000 2020 467,000 2021 485,000 2022 450,000 $ 2,460,000 |
Business Segmentation and Geo39
Business Segmentation and Geographical Distribution (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Business Segmentation And Geographical Distribution Tables | |
Business Segmentation and Geographical Distribution | Year ended December 30, 2017 Ingredients Consumer Products Core Standards and Contract Services Corporate segment segment segment and other Total Net sales $ 11,153,371 $ 5,464,843 $ 4,583,268 $ - $ 21,201,482 Cost of sales 5,491,920 2,189,597 3,042,660 - 10,724,177 Gross profit 5,661,451 3,275,246 1,540,608 - 10,477,305 Operating expenses: Sales and marketing 1,280,004 2,672,810 506,410 - 4,459,224 Research and development 2,903,249 1,104,132 4,007,381 General and administrative - - - 17,641,889 17,641,889 Other 745,773 - - - 745,773 Operating expenses 4,929,026 3,776,942 506,410 17,641,889 26,854,267 Operating income (loss) $ 732,425 $ (501,696 ) $ 1,034,198 $ (17,641,889 ) $ (16,376,962 ) Year ended December 31, 2016 Ingredients Consumer Products Core Standards and Contract Services Corporate segment segment segment and other Total Net sales $ 16,774,641 $ - $ 4,890,007 $ - $ 21,664,648 Cost of sales 7,920,516 - 3,353,598 - 11,274,114 Gross profit 8,854,125 - 1,536,409 - 10,390,534 Operating expenses: Sales and marketing 1,196,711 - 361,502 - 1,558,213 Research and development 2,487,978 - 34,790 - 2,522,768 General and administrative - - - 9,214,763 9,214,763 Operating expenses 3,684,689 - 396,292 9,214,763 13,295,744 Operating income (loss) $ 5,169,436 $ - $ 1,140,117 $ (9,214,763 ) $ (2,905,210 ) Year ended January 2, 2016 Ingredients Consumer Products Core Standards and Contract Services Corporate segment segment segment and other Total Net sales $ 12,542,314 $ - $ 5,342,572 $ - $ 17,884,886 Cost of sales 6,664,164 - 3,686,117 - 10,350,281 Gross profit 5,878,150 - 1,656,455 - 7,534,605 Operating expenses: Sales and marketing 1,111,993 - 395,875 - 1,507,868 Research and development 891,601 - - - 891,601 General and administrative - - - 7,201,231 7,201,231 Operating expenses 2,003,594 - 395,875 7,201,231 9,600,700 Operating income (loss) $ 3,874,556 $ - $ 1,260,580 $ (7,201,231 ) $ (2,066,095 ) At December 30, 2017 Ingredients Consumer Products Core Standards and Contract Services Corporate segment segment segment and other Total Total assets $ 9,742,400 $ 3,398,800 $ 2,558,801 $ 47,023,599 $ 62,723,600 At December 31, 2016 Ingredients Consumer Products Core Standards and Contract Services Corporate segment segment segment and other Total Total assets $ 13,257,289 $ - $ 2,547,427 $ 3,947,352 $ 19,752,068 |
Major customers | Years Ended Major Customers 2017 2016 2015 Customer G - Related Party 19.4 % * * Customer D 10.2 % 11.0 % * Customer C (1) * 23.9 % * Customer B * * 13.6 % * Represents less than 10%. (1) There is ongoing litigation with Customer C Major customers who accounted for more than 10% of the Company’s total trade receivables were as follows: Percentage of the Company's Total Trade Receivables Major Customers At December 30, 2017 At December 31, 2016 Customer G - Related Party 18.1 % * Customer D 13.4 % 10.2 % Customer C (1) 41.8 % 45.8 % * Represents less than 10%. (1) There is ongoing litigation with Customer C Disclosure of major vendors Major vendors who accounted for more than 10% of the Company's total accounts payable were as follows: Percentage of the Company's Total Accounts Payable Major Vendors At December 30, 2017 At December 31, 2016 Vendor A * 39.5 % Vendor B * 20.8 % Vendor C 14.5 % * Vendor D 10.4 % * Vendor E 10.3 % * * Represents less than 10%. |
Quarterly Financial Informati40
Quarterly Financial Information (unaudited) (Tables) | 12 Months Ended |
Dec. 30, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule Of Quarterly Financial Information Table | Three Months Ended April 1, July 1, September 30, December 30, Sales, net $ 3,367,647 $ 4,218,310 $ 6,084,690 $ 7,530,836 Cost of sales 1,749,911 2,109,109 3,169,321 3,695,837 Gross profit 1,617,736 2,109,201 2,915,369 3,834,999 Operating expenses 3,390,625 4,758,708 6,092,153 12,612,782 Operating loss (1,772,889 ) (2,649,507 ) (3,176,784 ) (8,777,783 ) Nonoperating expenses (28,349 ) (35,894 ) (44,508 ) (44,033 ) Loss from continuing operations (1,801,238 ) (2,685,401 ) (3,221,292 ) (8,821,816 ) Income (loss) from discontinued operations (127,517 ) (78,723 ) 5,358,369 — Net income (loss) $ (1,928,755 ) $ (2,764,124 ) $ 2,137,077 $ (8,821,816 ) Basic earnings (loss) per common share $ (0.05 ) $ (0.07 ) $ 0.05 $ (0.17 ) Diluted earnings (loss) per common share $ (0.05 ) $ (0.07 ) $ 0.04 $ (0.17 ) Basic weighted average common shares outstanding 38,030,688 42,121,150 47,065,009 51,178,664 Diluted weighted average common shares outstanding 38,030,688 42,121,150 47,556,697 51,178,664 Three Months Ended April 2, 2016 July 2, 2016 October 1, 2016 December 31, 2016 Sales, net $ 5,852,109 $ 7,422,470 $ 3,937,286 $ 4,452,783 Cost of sales 3,008,391 3,748,684 2,074,325 2,442,714 Gross profit 2,843,718 3,673,786 1,862,961 2,010,069 Operating expenses 2,811,652 3,514,974 2,787,123 4,181,995 Operating income (loss) 32,066 158,812 (924,162 ) (2,171,926 ) Nonoperating expenses (177,350 ) (448,416 ) (2,260 ) (18,360 ) Provision for income taxes (10,740 ) 4,087 3,153 3,500 Loss from continuing operations (156,024 ) (285,517 ) (923,269 ) (2,186,786 ) Income (loss) from discontinued operations 411,649 202,850 (31,121 ) 40,033 Net income (loss) $ 255,625 $ (82,667 ) $ (954,390 ) $ (2,146,753 ) Basic earnings (loss) per common share $ 0.01 $ (0.00 ) $ (0.03 ) $ (0.06 ) Diluted earnings (loss) per common share $ 0.01 $ (0.00 ) $ (0.03 ) $ (0.06 ) Basic weighted average common shares outstanding 36,414,041 36,990,032 37,868,672 37,904,534 Diluted weighted average common shares outstanding 37,472,579 36,990,032 37,868,672 37,904,534 |
Nature of Business and Liquid41
Nature of Business and Liquidity (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | Jan. 03, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||
Operating loss | $ (8,777,783) | $ (3,176,784) | $ (2,649,507) | $ (1,772,889) | $ (2,171,926) | $ (924,162) | $ 158,812 | $ 32,066 | $ (16,376,962) | $ (2,905,210) | $ (2,066,095) | |
Net loss | (8,821,816) | $ 2,137,077 | $ (2,764,124) | $ (1,928,755) | (2,146,753) | $ (954,390) | $ (82,667) | $ 255,625 | (11,377,618) | (2,928,185) | (2,771,067) | |
Cash and cash equivalents | $ 45,388,848 | $ 1,642,429 | $ 45,388,848 | $ 1,642,429 | $ 5,549,672 | $ 3,964,750 |
Significant Accounting Polici42
Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Significant Accounting Policies Details | |||
Shipping and handling fees billed | $ 137,000 | $ 110,000 | $ 113,000 |
Cost of shipping and handling fees billed | $ 185,000 | $ 108,000 | $ 112,000 |
Significant Accounting Polici43
Significant Accounting Policies (Details 1) - USD ($) | Dec. 30, 2017 | Dec. 31, 2016 |
Allowance for doubtful receivables | $ 669,000 | $ 1,081,000 |
Customer C | ||
Allowance for doubtful receivables | 500,000 | 800,000 |
Customer E | ||
Allowance for doubtful receivables | 0 | 198,000 |
Other Allowances | ||
Allowance for doubtful receivables | $ 169,000 | $ 83,000 |
Significant Accounting Polici44
Significant Accounting Policies (Details 2) - USD ($) | Dec. 30, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||
Bulk ingredients | $ 4,159,000 | $ 7,044,000 |
Reference standards | 1,027,000 | 1,033,000 |
Consumer Products - Finished Goods | 503,000 | 0 |
Consumer Products - Work in Process | 249,000 | 0 |
Inventory-gross | 5,938,000 | 8,077,000 |
Less valuation allowance | 142,000 | 164,000 |
Inventory-net | $ 5,796,281 | $ 7,912,630 |
Significant Accounting Polici45
Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Accounting Policies [Abstract] | |||
Uninsured cash amount | $ 45,400,000 | ||
Advertising expense | $ 1,914,000 | $ 58,000 | $ 104,000 |
Loss Per Share Applicable to 46
Loss Per Share Applicable to Common Stockholders (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | ||
Earnings per share | ||||||||||||
Net loss | $ (8,821,816) | $ 2,137,077 | $ (2,764,124) | $ (1,928,755) | $ (2,146,753) | $ (954,390) | $ (82,667) | $ 255,625 | $ (11,377,618) | $ (2,928,185) | $ (2,771,067) | |
Basic and diluted loss per common share | $ (0.26) | $ (0.08) | $ (0.08) | |||||||||
Weighted average common shares outstanding | [1] | 44,598,879 | 37,294,321 | 35,877,341 | ||||||||
Stock Options [Member] | ||||||||||||
Potentially dilutive securities | ||||||||||||
Diliutive securities | [2] | $ 6,534,167 | $ 5,210,334 | $ 5,244,918 | ||||||||
Warrant [Member] | ||||||||||||
Potentially dilutive securities | ||||||||||||
Diliutive securities | [2] | 470,444 | 470,444 | 423,007 | ||||||||
Convertible Debt Securities [Member] | ||||||||||||
Potentially dilutive securities | ||||||||||||
Diliutive securities | [2] | $ 0 | $ 0 | $ 257,798 | ||||||||
[1] | Includes approximately 0.5 million, 0.4 million and 0.4 million nonvested restricted stock for the years 2017, 2016 and 2015, 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. |
Loss Per Share Applicable to 47
Loss Per Share Applicable to Common Stockholders (Details Narrative) - shares | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Loss Per Share Applicable To Common Stockholders Details Narrative | |||
Weighted average nonvested shares of restricted stock | 500,000 | 400,000 | 400,000 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 30, 2017 | Dec. 31, 2016 | |
Accumulated Amortization | $ (1,189,000) | $ (983,000) |
Net Amount | 1,651,000 | 486,000 |
Healthspan Research LLC Acquisition | ||
Gross Carrying Amount | $ 1,346,000 | |
Weighted Average Total Amortization Period | 10 years | |
License agreements and other | ||
Gross Carrying Amount | $ 1,494,000 | $ 1,469,000 |
Weighted Average Total Amortization Period | 9 years |
Intangible Assets (Details 1)
Intangible Assets (Details 1) - USD ($) | Dec. 30, 2017 | Dec. 31, 2016 |
Intangible Assets Details 1 | ||
2,018 | $ 233,000 | |
2,019 | 233,000 | |
2,020 | 228,000 | |
2,021 | 209,000 | |
2,022 | 171,000 | |
Thereafter | 577,000 | |
Intangible assets | $ 1,651,000 | $ 486,000 |
Intangible Assets (Details Narr
Intangible Assets (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Intangible Assets Details Narrative | |||
Amortization expense on amortizable intangible assets | $ 206,208 | $ 87,826 | $ 45,014 |
Leasehold Improvements and Eq51
Leasehold Improvements and Equipment (Details) - USD ($) | Dec. 30, 2017 | Dec. 31, 2016 |
Leasehold Improvements And Equipment Details | ||
Laboratory equipment (10 years) | $ 1,869,000 | $ 1,142,000 |
Leasehold improvements (Until the end of the lease term) | 1,699,000 | 1,332,000 |
Computer equipment (3 to 5 years) | 511,000 | 400,000 |
Furniture and fixtures (7 years) | 90,000 | 41,000 |
Office equipment (10 years) | 18,000 | 10,000 |
Construction in progress | 131,000 | 170,000 |
Leasehold improvements, gross | 4,318,000 | 3,095,000 |
Less accumulated depreciation | 1,446,000 | 1,317,000 |
Leasehold improvements, total | $ 2,872,000 | $ 1,778,000 |
Leasehold Improvements and Eq52
Leasehold Improvements and Equipment (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Leasehold Improvements And Equipment Details Narrative | |||
Depreciation expense | $ 510,000 | $ 332,000 | $ 286,000 |
Capitalized lease obligations total cost | 871,000 | 1,214,000 | |
Capitalized lease obligations accumulated amortization | $ 126,000 | $ 277,000 |
Capitalized Lease Obligations53
Capitalized Lease Obligations (Details) | Dec. 30, 2017USD ($) |
Capitalized Lease Obligations Details | |
2,018 | $ 236,000 |
2,019 | 196,000 |
2,020 | 126,000 |
2,021 | 18,000 |
Total minimum lease payments | 576,000 |
Less amount representing interest at a rate of approximately 9.8% per year | 70,000 |
Present value of net minimum lease payments | 506,000 |
Less current portion | 196,000 |
Long-term obligations under capital leases | $ 310,000 |
Capitalized Lease Obligations54
Capitalized Lease Obligations (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Capitalized Lease Obligations Details Narrative | |||
Interest expense | $ 57,000 | $ 48,000 | $ 62,000 |
Line of Credit (Details Narrati
Line of Credit (Details Narrative) | Dec. 30, 2017USD ($) |
Line Of Credit Details Narrative | |
Debt issuance costs, Line of credit | $ 252,000 |
Unamortized debt issuance costs, Line of credit | $ 115,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Current | |||
Federal | $ 0 | $ 0 | $ 0 |
State | 0 | 0 | 4,527 |
Deferred (net of valuation allowance) | |||
Federal | 0 | 0 | 0 |
State | 0 | 0 | 0 |
Income tax provision | $ 0 | $ 0 | $ 4,527 |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Income Tax Disclosure [Abstract] | |||
Federal income tax expense at statutory rate | (34.00%) | (34.00%) | (34.00%) |
State income tax, net of federal benefit | (5.30%) | (5.30%) | (5.10%) |
Permanent differences | 7.60% | 8.40% | 5.70% |
Change in tax rates | 0.00% | (0.30%) | 0.70% |
Changes of state net operating losses | 1.30% | 1.80% | 17.40% |
Change in stock options and restricted stock | (1.30%) | 11.80% | 0.00% |
Change in valuation allowance | (23.10%) | 16.40% | 13.70% |
Remeasurement of deferred taxes asset / liability | 53.40% | 0.00% | 0.00% |
Other | 1.40% | 1.20% | 1.80% |
Effective Tax Rate | 0.00% | 0.00% | 0.20% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) | Dec. 30, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Net operating loss carryforward | $ 9,963,000 | $ 11,023,000 |
Capital loss carryforward | 0 | 811,000 |
Stock options and restricted stock | 1,873,000 | 2,694,000 |
Inventory reserve | 143,000 | 195,000 |
Allowance for doubtful accounts | 183,000 | 425,000 |
Accrued expenses | 674,000 | 487,000 |
Deferred revenue | 19,000 | 13,000 |
Intangibles | 27,000 | 29,000 |
Deferred rent | 166,000 | 252,000 |
Deferred Tax Assets Gross | 13,048,000 | 15,929,000 |
Less valuation allowance | (12,904,000) | (15,530,000) |
Deferred Tax Assets Net | 144,000 | 399,000 |
Deferred tax liabilities: | ||
Leasehold improvements and equipment | (9,000) | (282,000) |
Prepaid expenses | (135,000) | (117,000) |
Deferred Income Tax Liabilities | (144,000) | (399,000) |
Deferred Tax Liabilities | $ 0 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Effective income tax rates | 0.00% | 0.00% | 0.20% |
Increase in valuation allowance | $ (2,600,000) | ||
Operating loss carryforwards | 9,963,000 | $ 11,023,000 | |
Federal [Member] | |||
Operating loss carryforwards | $ 40,000,000 | $ 29,600,000 | |
Operating loss carryforwards expiration date (start) | Dec. 31, 2023 | ||
State [Member] | |||
Operating loss carryforwards expiration date (start) | Dec. 31, 2022 |
Related Party Transactions (Det
Related Party Transactions (Details) | 12 Months Ended |
Dec. 30, 2017USD ($) | |
Related Party Transactions Details | |
Common Stock | $ 1,000,000 |
Transaction costs | 178,000 |
Previously held equity interest | 20,000 |
Consideration transferred (A) | 1,198,000 |
Assets acquired | |
Cash and cash equivalents | 19,000 |
Trade receivables | 11,000 |
Inventory | 61,000 |
Liabilities assumed | |
Due to officer | (132,000) |
Accounts payable | (74,000) |
Credit card payable | (30,000) |
Other accrued expenses | (3,000) |
Net assets (B) | (148,000) |
Consumer product business model, intangible asset (A) -(B) | $ 1,346,000 |
Related Party Transactions (D61
Related Party Transactions (Details Narrative) | 12 Months Ended |
Dec. 30, 2017USD ($) | |
Amortized expense for the acquired intangible asset | $ 109,000 |
Useful life of the acquired intangible asset | 10 years |
Repayment of loan to Mr. Robert Fried | $ 32,500 |
Additional amount to repay to Mr. Fried on March 9, 2018 | $ 100,000 |
Li Ka Shing [Member] | Entity A [Member | |
Beneficial ownership | 30.00% |
Li Ka Shing [Member] | Minimum [Member] | |
Beneficial ownership | 10.00% |
Entity A [Member | Entity G [Member | |
Beneficial ownership | 75.00% |
Customer G [Member] | |
Sales to Customer G | $ 4,100,000 |
Trade receivable from Customer G | $ 1,000,000 |
Discontinued Operations (Detail
Discontinued Operations (Details) - USD ($) | 12 Months Ended | |||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | ||
Discontinued Operations Details | ||||
Cash payment | $ 6,750,000 | |||
Cash payment held in escrow | [1] | 750,000 | ||
Additional earnout payment | 0 | |||
Consideration received | 7,500,000 | |||
Legal | 428,000 | |||
Financial consulting | 250,000 | |||
Other | 118,000 | |||
Selling costs | 796,000 | |||
Assets disposed: Leasehold improvements and equipment, net | 1,427,000 | |||
Assets disposed: Prepaid expenses | 11,000 | |||
Assets disposed:Deposits | 20,000 | |||
Liabilities disposed: Deferred revenue | (7,000) | |||
Liabilities disposed: Deferred rent | (215,000) | |||
Net assets | 1,236,000 | $ 1,371,013 | ||
Gain from disposal | $ 5,467,268 | $ 0 | $ 0 | |
[1] | $750,000 is expected to be held in escrow until March 2019 to satisfy any indemnification claims. |
Discontinued Operations (Deta63
Discontinued Operations (Details 1) - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Discontinued Operations Details 1 | |||
Sales | $ 2,820,631 | $ 5,146,438 | $ 4,129,254 |
Cost of sales | 2,478,827 | 3,615,840 | 3,182,851 |
Gross profit | 341,804 | 1,530,598 | 946,403 |
Sales and marketing | 482,134 | 692,376 | 818,920 |
General and administrative | 150,171 | 178,446 | 215,220 |
Operating expenses | 632,305 | 870,822 | 1,034,140 |
Operating income (loss) | (290,501) | 659,776 | (87,737) |
Interest expense, net | (24,639) | (36,366) | (45,791) |
Nonoperating expenses | (24,639) | (36,366) | (45,791) |
Income (loss) from discontinued operations | $ (315,140) | $ 623,410 | $ (133,528) |
Discontinued Operations (Deta64
Discontinued Operations (Details 2) - USD ($) | Dec. 30, 2017 | Dec. 31, 2016 |
Current assets held for sale | $ 0 | $ 18,315 |
Noncurrent assets held for sale | 0 | 1,352,878 |
Assets held for sale | 1,236,000 | 1,371,013 |
Liabilities held for sale | $ 0 | 184,766 |
Prepaid expenses | ||
Current assets held for sale | 18,315 | |
Leasehold Improvements and Equipment, net | ||
Noncurrent assets held for sale | 1,333,203 | |
Deposits | ||
Noncurrent assets held for sale | 19,675 | |
Deferred rent | ||
Liabilities held for sale | $ 184,766 |
Discontinued Operations (Deta65
Discontinued Operations (Details 3) - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Discontinued Operations Details 3 | |||
Depreciation | $ 169,250 | $ 254,755 | $ 234,010 |
Purchase of leasehold improvements and equipment | 111,232 | 313,842 | 190,632 |
Capital lease obligation incurred for the purchase of equipment | 0 | 156,655 | 303,933 |
Retirement of fully depreciated equipment - cost | 55,947 | 76,050 | 119,888 |
Retirement of fully depreciated equipment - accumulated depreciation | $ (55,947) | $ (76,050) | $ (119,888) |
Share-Based Compensation (Detai
Share-Based Compensation (Details) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Options [Member] | |||
Expected term | 6 years | 6 years | 6 years |
Expected volatility | 72.00% | 73.00% | 76.00% |
Expected dividends | 0.00% | 0.00% | 0.00% |
Risk-free rate | 2.00% | 1.00% | 2.00% |
Market Based Stock Options [Member] | |||
Expected term | 10 years | ||
Expected volatility | 67.00% | ||
Risk-free rate | 2.40% | ||
Cost of equity | 15.70% | ||
Non-Employee Stock Options [Member] | |||
Expected term | 6 years | 5 years | 0 years |
Expected volatility | 69.00% | 73.00% | 0.00% |
Expected dividends | 0.00% | 0.00% | 0.00% |
Risk-free rate | 2.00% | 2.00% | 0.00% |
Share-Based Compensation (Det67
Share-Based Compensation (Details 1) - ServicePeriodBasedStockOptions [Member] - USD ($) | 12 Months Ended | ||||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |||
Number of Shares | |||||
Outstanding at Beginning of Period | 4,281,151 | 4,314,263 | 4,241,386 | ||
Options Granted | 1,110,404 | 742,485 | 730,562 | ||
Option classification from Employee to Non-Employee | (514,024) | ||||
Options Exercised | (863,712) | (238,423) | (40,236) | ||
Options Expired | (3,334) | (183,334) | |||
Options Forfeited | (73,483) | (353,840) | (103,425) | ||
Outstanding at End of Period | 4,451,026 | 4,281,151 | 4,314,263 | ||
Exercisable at End of Period | 2,937,613 | ||||
Weighted Average Exercise Price | |||||
Outstanding at Beginning of Period | $ 3.52 | $ 3.50 | $ 3.39 | ||
Options Granted | 3.25 | 3.91 | 3.66 | ||
Option classification from Employee to Non-Employee | 2.79 | ||||
Options Exercised | 2.42 | 2.67 | 2.37 | ||
Options Expired | 4.50 | 4.50 | |||
Options Forfeited | 3.88 | 4.15 | 3.93 | ||
Outstanding at End of Period | 4.45 | $ 3.52 | $ 3.50 | ||
Exercisable at End of Period | $ 3.54 | ||||
Weighted Average Remaining Contractual Term | |||||
Outstanding at Beginning of Period | 6 years 4 months 10 days | 6 years 5 months 8 days | 7 years | ||
Options granted | 10 years | 10 years | 10 years | ||
Option classification from Employee to Non-Employee | 7 years 9 months 11 days | ||||
Outstanding at End of Period | 5 years 9 months 4 days | 6 years 4 months 10 days | 6 years 5 months 8 days | ||
Exercisable at End of Period | 5 years 2 months 5 days | ||||
Fair Value of Options Granted | $ 2.07 | $ 2.49 | $ 2.28 | ||
Aggregate Intrinsic Value | |||||
Aggregate Intrinsic Value, exercised | $ 2,455,000 | $ 502,000 | $ 58,000 | ||
Aggregate Intrinsic Value outstanding | 10,740,000 | [1] | $ 1,352,000 | ||
Aggregate Intrinsic Value exercisable | [1] | $ 7,230,000 | |||
[1] | The aggregate intrinsic values in the table above are based on the Company's closing stock price of $5.88 on the last day of business for the year ended December 30, 2017. |
Share-Based Compensation (Det68
Share-Based Compensation (Details 2) - Performance Based Stock Options [Member] - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Summary of performance based stock option activity- Shares | |||
Outstanding at Beginning of Period | 66,668 | 66,668 | 66,668 |
Options Granted | 0 | 0 | 0 |
Options Exercised | 0 | 0 | 0 |
Options Forfeited | 0 | 0 | 0 |
Outstanding at End of Period | 66,668 | 66,668 | 66,668 |
Exercisable at End of Period | 66,668 | ||
Weighted Average Exercise Price | |||
Outstanding at Beginning of Period | $ 1.89 | $ 1.89 | $ 1.89 |
Options Granted | 0 | 0 | 0 |
Options Exercised | 0 | 0 | 0 |
Options Forfeited | 0 | 0 | 0 |
Outstanding at End of Period | 1.89 | $ 1.89 | $ 1.89 |
Exercisable at End of Period | $ 1.89 | ||
Weighted Average Remaining Contractual Term | |||
Outstanding at Beginning of Period | 6 years 29 days | 7 years 29 days | 8 years 29 days |
Outstanding at End of Period | 5 years 29 days | 6 years 29 days | 7 years 29 days |
Exercisable at End of Period | 5 years 29 days | ||
Aggregate Intrinsic Value | |||
Outstanding at End of Period | $ 266,000 | ||
Exercisable at End of Period | $ 266,000 |
Share-Based Compensation (Det69
Share-Based Compensation (Details 3) - Market Based Stock Options [Member] | 12 Months Ended |
Dec. 30, 2017USD ($)$ / sharesshares | |
Summary of market based stock option activity- Shares | |
Outstanding at Beginning of Period | shares | 0 |
Options Granted | shares | 1,000,000 |
Options Exercised | shares | 0 |
Options Forfeited | shares | 0 |
Outstanding at End of Period | shares | 1,000,000 |
Exercisable at End of Period | shares | 55,556 |
Weighted Average Exercise Price | |
Outstanding at Beginning of Period | $ 0 |
Options Granted | 4.24 |
Options Exercised | 0 |
Options Forfeited | 0 |
Outstanding at End of Period | 4.24 |
Exercisable at End of Period | $ 4.24 |
Weighted Average Remaining Contractual Term | |
Outstanding at Beginning of Period | 0 years |
Options Granted | 10 years |
Outstanding at End of Period | 9 years 2 months 26 days |
Exercisable at End of Period | 9 years 2 months 26 days |
Fair Value of Options Granted | $ 3.04 |
Aggregate Intrinsic Value | |
Outstanding at End of Period | $ | $ 1,640,000 |
Exercisable at End of Period | $ | $ 91,000 |
Share-Based Compensation (Det70
Share-Based Compensation (Details 4) - Restricted Stock [Member] - Employee Stock Option [Member] - $ / shares | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Summary of activity of restricted stock awards granted to employees- Shares | |||
Unvested shares at Beginning of Period | 350,003 | 356,671 | 530,007 |
Granted | 500,000 | 0 | 0 |
Vested | (666,668) | (6,668) | (173,336) |
Forfeited | 0 | 0 | 0 |
Unvested shares at End of Period | 183,335 | 350,003 | 356,671 |
Expected to Vest as of End of Period | 183,335 | ||
Weighted Average Award-Date Fair Value | |||
Unvested shares at Beginning of Period | $ 3.20 | $ 3.21 | $ 3.54 |
Granted | 5.08 | 0 | 0 |
Vested | 4.60 | 4.23 | 4.23 |
Forfeited | 0 | 0 | 0 |
Unvested shares at End of Period | 3.25 | $ 3.20 | $ 3.21 |
Expected to Vest as of End of Period | $ 3.25 |
Share-Based Compensation (Det71
Share-Based Compensation (Details 5) - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Non-Employee Share-Based Compensation- Options | |||
Outstanding at Beginning of Period | 862,515 | 864,182 | 350,158 |
Options Granted | 175,000 | 40,000 | 0 |
Options Classification from Employee to Non-Employee | 514,024 | ||
Options Exercised | (21,042) | (41,667) | 0 |
Options Forfeited | 0 | 0 | 0 |
Outstanding at End of Period | 1,016,473 | 862,515 | 864,182 |
Exercisable at End of Period | 824,806 | ||
Weighted Average Exercise Price | |||
Outstanding at Beginning of Period | $ 3.35 | $ 3.31 | $ 4.05 |
Options Granted | 4.89 | 2.85 | 0 |
Options Classification from Employee to Non-Employee | 2.79 | ||
Options Exercised | 3.88 | 1.92 | 0 |
Options Forfeited | 0 | 0 | 0 |
Outstanding at End of Period | 3.61 | $ 3.35 | $ 3.31 |
Exercisable at End of Period | $ 3.35 | ||
Weighted Average Remaining Contractual Term | |||
Outstanding at beginning of period | 5 years 2 months 23 days | 6 years 14 days | 5 years 5 months 16 days |
Options granted | 10 years | 10 years | |
Options Classification from Employee to Non-Employee | 7 years 9 months 11 days | ||
Outstanding at End of Period | 5 years 1 month 28 days | 5 years 2 months 23 days | 6 years 14 days |
Exercisable at End of Period | 4 years 1 month 24 days | ||
Aggregate Intrinsic Value | |||
Exercised | $ 24,000 | $ 98,000 | |
Outstanding at End of Period | 2,361,000 | ||
Exercisable at End of Period | $ 2,088,000 |
Share-Based Compensation (Det72
Share-Based Compensation (Details 6) - Restricted Stock [Member] - Nonemployees [Member] - $ / shares | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Summary of activity of restricted stock awards granted to Non-employees- Shares | |||
Unvested shares at Beginning of Period | 10,000 | 17,333 | 25,333 |
Granted | 0 | 0 | 46,668 |
Vested | (8,000) | (7,333) | (54,668) |
Forfeited | 0 | 0 | 0 |
Unvested shares at End of Period | 2,000 | 10,000 | 17,333 |
Expected to Vest as of End of Period | 2,000 | ||
Weighted Average Award-Date Fair Value for Non-Employee Restricted Stock | |||
Unvested shares at Beginning of Period | $ 3.31 | $ 3.66 | $ 2.70 |
Granted | 0 | 0 | 2.58 |
Vested | 3.63 | 3.79 | 3.63 |
Forfeited | 0 | 0 | 0 |
Unvested shares at End of Period | 5.88 | $ 3.31 | $ 3.66 |
Expected to Vest as of End of Period | $ 5.88 |
Share-Based Compensation (Det73
Share-Based Compensation (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
2007 Equity Incentive Plan | |||
Remaining amount available for issuance | 1,400,000 | ||
Employee [Member] | |||
Unrecognized compensation expense | $ 5,700,000 | ||
Cost is expected to be recognized over a weighted average period | 2 years 6 months | ||
Recognized share based compensation expense | $ 4,400,000 | $ 1,100,000 | $ 1,500,000 |
NonEmployee [Member] | |||
Closing stock price | $ 5.88 | ||
Unrecognized compensation expense | $ 651,000 | ||
Cost is expected to be recognized over a weighted average period | 2 years 4 months 24 days | ||
Recognized share based compensation expense | $ 171,000 | $ 61,000 | $ 435,000 |
Performance Based Stock Options [Member] | |||
Closing stock price | $ 5.88 | ||
Market Based Stock Options [Member] | |||
Closing stock price | $ 5.88 |
Stock Issuance (Details)
Stock Issuance (Details) - SPA - $ / shares | Mar. 11, 2016 | Nov. 09, 2015 |
Assumptions for Warrants Issued | ||
Fair value of common stock | $ 4.41 | $ 4.41 |
Contractual term | 3 years | 3 years |
Volatility | 60.00% | 62.00% |
Risk-free rate | 1.16% | 1.27% |
Expected dividends | 0.00% | 0.00% |
Warrants (Details)
Warrants (Details) - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Number of Shares | |||
Warrants outstanding at beginning of period | 470,444 | 423,008 | 156,341 |
Warrants Issued | 0 | 64,103 | 266,667 |
Warrants Exercised | 0 | 0 | 0 |
Warrants Expired | 0 | (16,667) | 0 |
Warrants outstanding at end of period | 470,444 | 470,444 | 423,008 |
Warrants exercisable at end of period | 470,444 | 470,444 | 423,008 |
Weighted Average Exercise Price | |||
Outstanding at beginning of period | $ 4.15 | $ 4.02 | $ 3.21 |
Warrants issued | 0 | 4.80 | 4.50 |
Warrants exercised | 0 | 0 | 0 |
Warrant expired | 0 | 3.30 | .00 |
Outstanding at end of period | 4.15 | 4.15 | 4.02 |
Exercisable at end of period | $ 4.15 | $ 4.15 | $ 4.02 |
Remaining Contractual Term, beginning of period | 2 years 2 months 12 days | 3 years 25 days | 4 years 5 months 5 days |
Remaining Contractual Term, ending of period | 1 year 2 months 12 days | 2 years 2 months 12 days | 3 years 25 days |
Aggregate Intrinsic Value | $ 814,000 |
Warrants (Details 1)
Warrants (Details 1) - Warrant [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2016 | Jan. 02, 2016 | |
Fair value of common stock | $ 4.41 | $ 4.41 |
Contractual term | 3 years | 3 years |
Volatility | 60.00% | 62.00% |
Risk-free rate | 1.16% | 1.27% |
Expected dividends | 0.00% | 0.00% |
Warrants (Details Narrative)
Warrants (Details Narrative) | Dec. 30, 2017$ / shares |
Warrants Details Narrative | |
Closing stock price | $ 5.88 |
Commitments and Contingencies78
Commitments and Contingencies (Details) - Lease Obligations [Member] | Dec. 30, 2017USD ($) |
2,018 | $ 601,000 |
2,019 | 590,000 |
2,020 | 424,000 |
2,021 | 340,000 |
2,022 | 138,000 |
Thereafter | 167,000 |
Minimum future rental payments | $ 2,260,000 |
Commitments and Contingencies79
Commitments and Contingencies (Details 1) - Purchase Commitment [Member] | Dec. 30, 2017USD ($) |
2,018 | $ 3,489,000 |
2,019 | 82,000 |
Total purchase obligations | $ 3,571,000 |
Commitments and Contingencies80
Commitments and Contingencies (Details 2) - Royalty Agreements [Member] | Dec. 30, 2017USD ($) |
2,018 | $ 446,000 |
2,019 | 612,000 |
2,020 | 467,000 |
2,021 | 485,000 |
2,022 | 450,000 |
Minimum royalties including license maintenance fees | $ 2,460,000 |
Commitments and Contingencies81
Commitments and Contingencies (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Lease | |||
Rent expense | $ 729,000 | $ 606,000 | $ 536,000 |
Deferred rent | 492,000 | 380,000 | |
Royalty | |||
Royalty expense including license maintenance fees | 992,000 | $ 773,000 | $ 583,000 |
Minimum [Member] | |||
Lease | |||
Monthly lease payment | 1,500 | ||
Royalty | |||
Minimum yearly royalty payments | 10,000 | ||
Maximum [Member] | |||
Lease | |||
Monthly lease payment | 24,000 | ||
Royalty | |||
Minimum yearly royalty payments | $ 83,000 |
Business Segmentation and Geo82
Business Segmentation and Geographical Distribution (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Net sales | $ 7,530,836 | $ 6,084,690 | $ 4,218,310 | $ 3,367,647 | $ 4,452,783 | $ 3,937,286 | $ 7,422,470 | $ 5,852,109 | $ 21,201,482 | $ 21,664,648 | $ 17,884,886 |
Cost of sales | 10,724,177 | 11,274,114 | 10,350,281 | ||||||||
Gross profit | 3,834,999 | 2,915,369 | 2,109,201 | 1,617,736 | 2,010,069 | 1,862,961 | 3,673,786 | 2,843,718 | 10,477,305 | 10,390,534 | 7,534,605 |
Operating expenses: | |||||||||||
Sales and marketing | 4,459,224 | 1,558,213 | 1,507,868 | ||||||||
Research and development | 4,007,381 | 2,522,768 | 891,601 | ||||||||
General and administrative | 17,641,889 | 9,214,763 | 7,201,231 | ||||||||
Other | 745,773 | 0 | 0 | ||||||||
Operating expenses | 12,612,782 | 6,092,153 | 4,758,708 | 3,390,625 | 4,181,995 | 2,787,123 | 3,514,974 | 2,811,652 | 26,854,267 | 13,295,744 | 9,600,700 |
Operating income (loss) | (8,777,783) | $ (3,176,784) | $ (2,649,507) | $ (1,772,889) | (2,171,926) | $ (924,162) | $ 158,812 | $ 32,066 | (16,376,962) | (2,905,210) | (2,066,095) |
Total assets | 62,723,600 | 19,752,068 | 62,723,600 | 19,752,068 | |||||||
Ingredients Segment [Member] | |||||||||||
Net sales | 11,153,371 | 16,774,641 | 12,542,314 | ||||||||
Cost of sales | 5,491,920 | 7,920,516 | 6,664,164 | ||||||||
Gross profit | 5,661,451 | 8,854,125 | 5,878,150 | ||||||||
Operating expenses: | |||||||||||
Sales and marketing | 1,280,004 | 1,196,711 | 1,111,993 | ||||||||
Research and development | 2,903,249 | 2,487,978 | 891,601 | ||||||||
General and administrative | 0 | 0 | 0 | ||||||||
Other | 745,773 | ||||||||||
Operating expenses | 4,929,026 | 3,684,689 | 2,003,594 | ||||||||
Operating income (loss) | 732,425 | 5,169,436 | 3,874,556 | ||||||||
Total assets | 9,742,400 | 13,257,289 | 9,742,400 | 13,257,289 | |||||||
Consumer Products Segment [Member] | |||||||||||
Net sales | 5,464,843 | 0 | 0 | ||||||||
Cost of sales | 2,189,597 | 0 | 0 | ||||||||
Gross profit | 3,275,246 | 0 | 0 | ||||||||
Operating expenses: | |||||||||||
Sales and marketing | 2,672,810 | 0 | 0 | ||||||||
Research and development | 1,104,132 | 0 | 0 | ||||||||
General and administrative | 0 | 0 | 0 | ||||||||
Other | 0 | ||||||||||
Operating expenses | 3,776,942 | 0 | 0 | ||||||||
Operating income (loss) | (501,696) | 0 | 0 | ||||||||
Total assets | 3,398,800 | 0 | 3,398,800 | 0 | |||||||
Core Standards Contract Services [Member] | |||||||||||
Net sales | 4,583,268 | 4,890,007 | 5,342,572 | ||||||||
Cost of sales | 3,042,660 | 3,353,598 | 3,686,117 | ||||||||
Gross profit | 1,540,608 | 1,536,409 | 1,656,455 | ||||||||
Operating expenses: | |||||||||||
Sales and marketing | 506,410 | 361,502 | 395,875 | ||||||||
Research and development | 0 | 34,790 | 0 | ||||||||
General and administrative | 0 | 0 | 0 | ||||||||
Other | 0 | ||||||||||
Operating expenses | 506,410 | 396,292 | 395,875 | ||||||||
Operating income (loss) | 1,034,198 | 1,140,117 | 1,260,580 | ||||||||
Total assets | 2,558,801 | 2,547,427 | 2,558,801 | 2,547,427 | |||||||
Other Segment [Member] | |||||||||||
Net sales | 0 | 0 | 0 | ||||||||
Cost of sales | 0 | 0 | 0 | ||||||||
Gross profit | 0 | 0 | 0 | ||||||||
Operating expenses: | |||||||||||
Sales and marketing | 0 | 0 | 0 | ||||||||
Research and development | 0 | 0 | 0 | ||||||||
General and administrative | 17,641,889 | 9,214,763 | 7,201,231 | ||||||||
Other | 0 | ||||||||||
Operating expenses | 17,641,889 | 9,214,763 | 7,201,231 | ||||||||
Operating income (loss) | (17,641,889) | (9,214,763) | $ (7,201,231) | ||||||||
Total assets | $ 47,023,599 | $ 3,947,352 | $ 47,023,599 | $ 3,947,352 |
Business Segmentation and Geo83
Business Segmentation and Geographical Distribution (Details 2) | 12 Months Ended | ||||||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |||||
Customer G - Related Party | Total Sales | |||||||
Concentration risk | 19.40% | [1] | [1] | ||||
Customer G - Related Party | Total Trade Receivables | |||||||
Concentration risk | 18.10% | [1] | |||||
Customer D | Total Sales | |||||||
Concentration risk | 10.20% | 11.00% | [1] | ||||
Customer D | Total Trade Receivables | |||||||
Concentration risk | 13.40% | 10.20% | |||||
Customer C | Total Sales | |||||||
Concentration risk | [2] | [1] | 23.90% | [1] | |||
Customer C | Total Trade Receivables | |||||||
Concentration risk | [2] | 41.80% | 45.80% | ||||
Customer B | Total Sales | |||||||
Concentration risk | [1] | [1] | 13.60% | ||||
Vendor A | Accounts Payable [Member] | |||||||
Concentration risk | [1] | 39.50% | |||||
Vendor B | Accounts Payable [Member] | |||||||
Concentration risk | [1] | 20.80% | |||||
Vendor C | Accounts Payable [Member] | |||||||
Concentration risk | 14.50% | [1] | |||||
Vendor D | Accounts Payable [Member] | |||||||
Concentration risk | 10.40% | [1] | |||||
Vendor E | Accounts Payable [Member] | |||||||
Concentration risk | 10.30% | [1] | |||||
[1] | Represents less than 10%. | ||||||
[2] | There is ongoing litigation with Customer C. |
Business Segmentation and Geo84
Business Segmentation and Geographical Distribution (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Ingredients Segment [Member] | |||
Revenue from international sources | $ 400,000 | $ 500,000 | $ 300,000 |
Consumer Products Segment [Member] | |||
Revenue from international sources | 4,200,000 | ||
Core Standards Contract Services [Member] | |||
Revenue from international sources | $ 1,000,000 | $ 1,600,000 | $ 1,800,000 |
Other Expense (Details Narrativ
Other Expense (Details Narrative) | 12 Months Ended |
Dec. 30, 2017USD ($) | |
Other Expense | |
Loss from ongoing litigation | $ 746,000 |
Allowance amount, beginning | (800,000) |
Allowance amount, ending | $ (500,000) |
Quarterly Financial Informati86
Quarterly Financial Information (unaudited) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Apr. 02, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jan. 02, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Sales, net | $ 7,530,836 | $ 6,084,690 | $ 4,218,310 | $ 3,367,647 | $ 4,452,783 | $ 3,937,286 | $ 7,422,470 | $ 5,852,109 | $ 21,201,482 | $ 21,664,648 | $ 17,884,886 |
Cost of sales | 3,695,837 | 3,169,321 | 2,109,109 | 1,749,911 | 2,442,714 | 2,074,325 | 3,748,684 | 3,008,391 | |||
Gross profit | 3,834,999 | 2,915,369 | 2,109,201 | 1,617,736 | 2,010,069 | 1,862,961 | 3,673,786 | 2,843,718 | 10,477,305 | 10,390,534 | 7,534,605 |
Operating expenses | 12,612,782 | 6,092,153 | 4,758,708 | 3,390,625 | 4,181,995 | 2,787,123 | 3,514,974 | 2,811,652 | 26,854,267 | 13,295,744 | 9,600,700 |
Operating income (loss) | (8,777,783) | (3,176,784) | (2,649,507) | (1,772,889) | (2,171,926) | (924,162) | 158,812 | 32,066 | (16,376,962) | (2,905,210) | (2,066,095) |
Nonoperating expenses | (44,033) | (44,508) | (35,894) | (28,349) | (18,360) | (2,260) | (448,416) | (177,350) | (152,784) | (646,385) | (566,917) |
Provision for income taxes | 3,500 | 3,153 | 4,087 | (10,740) | 0 | 0 | (4,527) | ||||
Loss from continuing operations | (8,821,816) | (3,221,292) | (2,685,401) | (1,801,238) | (2,186,786) | (923,269) | (285,517) | (156,024) | (16,529,746) | (3,551,595) | (2,637,539) |
Income (loss) from discontinued operations | 0 | 5,358,369 | (78,723) | (127,517) | 40,033 | (31,121) | 202,850 | 411,649 | 5,152,128 | 623,410 | (133,528) |
Net income (loss) | $ (8,821,816) | $ 2,137,077 | $ (2,764,124) | $ (1,928,755) | $ (2,146,753) | $ (954,390) | $ (82,667) | $ 255,625 | $ (11,377,618) | $ (2,928,185) | $ (2,771,067) |
Basic earnings (loss) per common share | $ (0.17) | $ 0.05 | $ (0.07) | $ (0.05) | $ (0.06) | $ (0.03) | $ 0 | $ 0.01 | |||
Diluted earnings (loss) per common share | $ (0.17) | $ 0.04 | $ (0.07) | $ (0.05) | $ (0.06) | $ (0.03) | $ 0 | $ 0.01 | |||
Basic weighted average common shares outstanding | 51,178,664 | 47,065,009 | 42,121,150 | 38,030,688 | 37,904,534 | 37,868,672 | 36,990,032 | 36,414,041 | |||
Diluted weighted average common shares outstanding | 51,178,664 | 47,556,697 | 42,121,150 | 38,030,688 | 37,904,534 | 37,868,672 | 36,990,032 | 37,472,579 |