Revenue, Segment and Geographic Information

9 Months Ended

Sep. 30, 2020

Revenue, Segment and Geographic Information

NOTE 12 – REVENUE, SEGMENT AND GEOGRAPHIC INFORMATION

The Company operates in two reportable segments: the design and manufacture of high-performance customized computers and flash arrays, which is inclusive of in-flight entertainment & connectivity, and value-added reseller with minimal customization. The Company evaluates financial performance on a company-wide basis. As of June 1, 2020, CDI’s operations became fully integrated and combined with the operation of OSS’ core business operations located in Escondido, California. It is the Company’s intention to dissolve CDI as a standalone entity upon resolution of certain outstanding items.

Segment detail for the three and nine month periods ended September 30, 2020 and 2019 is as follows:

	For The Three Month Ended September 30, 2020									For The Three Month Ended September 30, 2019
	OSS			Bressner			Total			OSS			Bressner			Total
Revenues	$	8,976,539		$	3,999,519		$	12,976,058		$	9,735,630		$	5,203,334		$	14,938,964
Cost of revenues		(4,976,063	)		(3,098,382	)		(8,074,445	)		(5,937,592	)		(3,971,453	)		(9,909,045	)
Gross profit		4,000,476			901,137			4,901,613			3,798,038			1,231,881			5,029,919
Gross margin %		44.6	%		22.5	%		37.8	%		39.0	%		23.7	%		33.7	%
Total operating expenses		3,052,949			869,222			3,922,171			3,730,788			879,574			4,610,362
Income from operations	$	947,527		$	31,915		$	979,442		$	67,250		$	352,307		$	419,557

	For The Nine Month Ended September 30, 2020									For The Nine Month Ended September 30, 2019
	OSS			Bressner			Total			OSS			Bressner			Total
Revenues	$	24,722,066		$	13,238,957		$	37,961,023		$	26,167,536		$	13,715,563		$	39,883,099
Cost of revenues		(15,899,150	)		(10,439,377	)		(26,338,527	)		(16,442,130	)		(10,586,269	)		(27,028,399	)
Gross profit		8,822,916			2,799,580			11,622,496			9,725,406			3,129,294			12,854,700
Gross profit %		35.7	%		21.1	%		30.6	%		37.2	%		22.8	%		32.2	%
Total operating expenses		9,883,997			2,676,097			12,560,094			12,703,649			2,744,182			15,447,831
Income (loss) from operations	$	(1,061,081	)	$	123,483		$	(937,598	)	$	(2,978,243	)	$	385,112		$	(2,593,131	)

Revenue from customers with non-U.S. billing addresses represented approximately 35% and 60% and 44% and 63% respective of the Company’s revenue during the three and nine month periods ended September 30, 2020 and 2019, respectively.

As of September 30, 2020, substantially all the Company’s long-lived assets were located in the United States of America with the exception of assets of $219,627 located in Germany.