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SEGMENT REPORTING AND GEOGRAPHIC INFORMATION
 12 Months Ended
Dec. 31, 2024
Segment Reporting [Abstract]  
SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

NOTE 12—SEGMENT REPORTING AND GEOGRAPHIC INFORMATION

 

(a) General Information

 

As of December 31, 2024, the Company continues to operate in two reportable operating segments, PG and CP, both of which are performed through the Company’s OmniMetrix subsidiary. See Note 1, Nature of Operations, for a description of these segments.

 

The Company’s reportable segments are strategic business units, offering different products and services and are managed separately by the CODM as each business requires different technology and marketing strategies.

 

The CODM is the Company’s Chief Executive Officer (CEO).

 

(b) Information about profit or loss and assets

 

The accounting policies of all the segments are those described in the summary of significant accounting policies. The Company evaluates performance by segment based on revenue (driven by the number of connections), gross profit and net income or loss before taxes.

 

The Company does not systematically allocate assets to the divisions of the subsidiaries constituting its consolidated group, unless the division constitutes a significant operation. Accordingly, where a division of a subsidiary constitutes a segment that does not meet the quantitative thresholds of applicable accounting principles, depreciation expense is recorded against the operations of such segment, without allocating the related depreciable assets to that segment. However, where a division of a subsidiary constitutes a segment that does meet the quantitative thresholds, related depreciable assets, along with other identifiable assets, are allocated to such division.

 

Segment expense that is routinely provided to the CODM is COGS and R&D expense. R&D expense is allocated to each segment based on estimated time on projects within the segment. SG&A expense and interest income is allocated to each segment based on the percentage of segment revenue to total revenue instead of being specifically identified to each segment since the Company’s resources have a high level of shared utilization between the segments. Further, the CODM does not review the assets by segment.

 

 

The following tables represent segmented data for the years ended December 31, 2024 and 2023 (in thousands).

 

   PG   CP   Total 
Year ended December 31, 2024:               
Revenues from external customers  $9,882   $1,104   $10,986 
COGS   2,548    439    2,987 
Segment gross profit   7,334    665    7,999 
R&D expense   851    161    1,012 
SG&A expense   3,609    421    4,030 
Segment operating income   2,874    83    2,957 
Interest income, net   64    6    70 
Segment income before income taxes  $2,938   $89   $3,027 
                
Year ended December 31, 2023:               
Revenues from external customers  $7,000   $1,059   $8,059 
COGS   1,627    428    2,055 
Segment gross profit   5,373    631    6,004 
R&D expense   737    138    875 
SG&A expense   3,471    527    3,998 
Segment operating income (loss)   1,165    (34)   1,131 
Interest income, net   55    8    63 
Segment income (loss) before income taxes  $1,220   $(26)  $1,194 

 

(c) The following tables represent a reconciliation of the segment data to the consolidated statement of operations and balance sheet data for the years ended and as of December 31, 2024 and 2023 (in thousands):

 

   2024   2023 
  

Year ended

December 31,

 
   2024   2023 
Total net income before income taxes for reportable segments  $3,027   $1,194 
Unallocated cost of corporate headquarters   (1,017)   (1,056)
Consolidated net income before income taxes  $2,010   $138 

 

   2024   2023 
  

As of

December 31,

 
   2024   2023 
Assets:          
Total assets for OmniMetrix subsidiary  $5,901   $5,163 
Assets of corporate headquarters   260    286 
Deferred tax assets   4,435    — 
Total consolidated assets  $10,596   $5,449 

 

   2024   2023 
  

Year ended

December 31,

 
   2024   2023 
Revenues based on location of customer:          
United States  $10,955   $7,992 
Other   31    67 
Revenues  $10,986   $8,059 

 

All of the Company’s long-lived assets are located in the United States.

 

(d) Revenues and Accounts Receivable Balances from Major Customers (in thousands):

 

    Invoiced Sales     Accounts Receivable  
    2024     2023     2024     2023  
Customer   Total     %     Total     %     Balance     %     Balance     %  
A   $  1,843       19 %   $ -*       -* %   $ 1,188       61 %   $ -*       -* %
B   $ -*       -* %   $ -*       -* %   $ - *       -* %   $ 134       25 % 

 

* Balance is not significant.
     
    The revenue and accounts receivable of both customer A and B are within the PG segment.