(14) Segment Information

The Company currently has two reportable business units: Astro Scientific and Astral.

Astro Scientific

Astro Scientific is a technology incubator that commercializes innovative technologies. Subsidiaries 1^st Detect and Astrogenetix currently reside in Astro Scientific:

1^st Detect - 1^st Detect is a manufacturer of advanced chemical detection technology that detects and identifies trace amounts of explosives and narcotics. The Company offers technology with capabilities that exceed those of the currently deployed competitive solutions, providing laboratory-quality performance capable of detecting a wide range of threats with minimal to no false positives, rapid analysis time, and an easy user interface. The Company worked with prime contractors in adapting our technology to be used in enhancing the government’s detection capabilities for a variety of applications.

Astrogenetix - Astrogenetix is applying a fast-track, on-orbit discovery platform using the International Space Station to develop vaccines. The Center for Vaccine Development at UMD, one of the leading vaccinology institutions in the world, independently validated our target vaccine for Salmonella through funding provided by NASA. We are currently looking for funding to finance the pursuit of an IND application with the FDA.

Astral Images

Astral Images - Astral is a developer of advanced film restoration and enhancement software. The Company offers significant cost savings to content owners who traditionally employ a laborious, inconsistent, and expensive manual frame-by-frame restoration process. At 24 frames-per-second, a full-length movie can easily have in excess of 200,000 frames, making manual conversion prohibitively expensive in some instances. Movie studios are at the precipice of a large shift to 4K and/or HDR (collectively known as UHD) content, and therefore, film assets will need to be rescanned and restored in order to remain relevant in the next generation of video content distribution through OTT providers such as Netflix, Amazon Prime, and Hulu. Astral is positioned to lead this shift using its powerful AI-driven algorithms that remove dust, scratches, and defects from film while converting the content to a digital format with significantly enhanced resolution. In addition, the intelligent software automatically restores the film’s original color, optimizing the content to be viewed in 4K. Coupled with Astral’s HDR technology, which maximizes the contrast ratio, or the difference in light intensity from the darkest blacks and brightest whites, and a significantly expanded color gamut (1.06 billion available colors instead of 16 million), Astral’s technology yields a result that is optimized for today’s most state of the art televisions.

This same technology is being applied to film held at film archives and museums with significant film collections throughout the world. This market is less driven by optimizing content for the latest standards and more concerned with preserving their treasured film assets. Film degrades over time, colors fade, buckling occurs, the film becomes brittle and eventually turns to dust, and in some cases, it becomes combustible. Astral provides an ideal solution for such entities as they tend to be more cost conscious than film studios, and Astral’s automated process is much less expensive than their alternative – manual restoration.

All intercompany transactions between business units have been eliminated in consolidation.

Key financial metrics of the Company’s segments are as follows:

	Three Months Ended March 31, 2018							Three Months Ended March 31, 2017
Revenue, Depreciation, and Income (In thousands)	Revenue		Depreciation		Loss before Income Taxes			Revenue		Depreciation		Loss before Income Taxes
Astro Scientific	$	—	$	99	$	(2,363	)	$	403	$	100	$	(2,153	)
Astral		—		91		(492	)		8		79		(692	)
Total	$	—	$	190	$	(2,855	)	$	411	$	179	$	(2,845	)

	Nine Months Ended March 31, 2018							Nine Months Ended March 31, 2017
Revenue, Depreciation, and Income (In thousands)	Revenue		Depreciation		Loss before Income Taxes			Revenue		Depreciation		Loss before Income Taxes
Astro Scientific	$	—	$	305	$	(7,380	)	$	1,929	$	284	$	(6,916	)
Astral		41		271		(1,618	)		8		240		(2,050	)
Total	$	41	$	576	$	(8,998	)	$	1,937	$	524	$	(8,966	)

	March 31, 2018						June 30, 2017
Assets (In thousands)	Fixed Assets, Net		Total Capital Expenditures (1)		Total Assets		Fixed Assets, Net		Total Capital Expenditures (2)		Total Assets
Astro Scientific	$	927	$	8	$	7,580	$	1,224	$	468	$	16,833
Astral		1,691		6		1,731		1,956		31		2,002
Total	$	2,618	$	14	$	9,311	$	3,180	$	499	$	18,835

(1)

Total capital expenditures are for the nine months ended March 31, 2018.

(2)

Total capital expenditures are for the twelve months ended June 30, 2017.