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Note 8 - Segment Reporting
 6 Months Ended
Jun. 30, 2024
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

Note 8 - Segment Reporting

 

The Company currently operates in two segments: (1) “Managed Services” which represents the business surrounding managed services for video collaboration and network applications; and (2) “Collaboration Products” which represents the business surrounding our Mezzanine™ product offerings.

 

Certain information concerning the Company’s segments for the three and six months ended June 30, 2024 and 2023 is presented in the following tables (in thousands):

 

  

Three Months Ended June 30, 2024

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $508  $103  $—  $611 

Cost of revenues

  331   160   —   491 

Gross profit

 $177  $(57) $—  $120 

Gross profit %

  35%  (55)%     20%
                 

Allocated operating expenses

 $31  $122  $—  $153 

Unallocated operating expenses

  —   —   985   985 

Total operating expenses

 $31  $122  $985  $1,138 
                 

Operating income (loss)

 $146  $(179) $(985) $(1,018)

Interest income, net

  (35)  (9)  —   (44)

Income (loss) before income taxes

  181   (170)  (985)  (974)

Income tax expense

  6   3   —   9 

Net income (loss)

 $175  $(173) $(985) $(983)

 

  

Three Months Ended June 30, 2023

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $640  $316  $—  $956 

Cost of revenues

  430   404   —   834 

Gross profit

 $210  $(88) $—  $122 

Gross profit %

  33%  (28)%     13%
                 

Allocated operating expenses

 $3  $(376) $—  $(373)

Unallocated operating expenses

  —   —  $1,586   1,586 

Total operating expenses

 $3  $(376) $1,586  $1,213 
                 

Operating income (loss)

 $207  $288  $(1,586) $(1,091)

Interest income, net

  (37)  (5)  —   (42)

Income (loss) before income taxes

  244   293   (1,586)  (1,049)

Income tax expense

  —   —   —   — 

Net income (loss)

 $244  $293  $(1,586) $(1,049)

 

  

Six Months Ended June 30, 2024

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $1,030  $207  $—  $1,237 

Cost of revenues

  700   420   —   1,120 

Gross profit

 $330  $(213) $—  $117 

Gross profit %

  32%  (103)%     9%
                 

Allocated operating expenses

 $62  $243  $—  $305 

Unallocated operating expenses

  —   —   2,014   2,014 

Total operating expenses

 $62  $243  $2,014  $2,319 
                 

Operating income (loss)

 $268  $(456) $(2,014) $(2,202)

Interest income, net

  (67)  (25)  —   (92)

Income (loss) before income taxes

  335   (431)  (2,014)  (2,110)

Income tax expense

  6   3   —   9 

Net income (loss)

 $329  $(434) $(2,014) $(2,119)

 

 

  

Six Months Ended June 30, 2023

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $1,330  $664  $—  $1,994 

Cost of revenues

  890   706   —   1,596 

Gross profit

 $440  $(42) $—  $398 

Gross profit %

  33%  (6)%     20%
                 

Allocated operating expenses

 $3  $(90) $—  $(87)

Unallocated operating expenses

  —   —   2,779   2,779 

Total operating expenses

 $3  $(90) $2,779  $2,692 
                 

Operating income (loss)

 $437  $48  $(2,779) $(2,294)

Interest income, net

  (34)  (30)  —   (64)

Income (loss) before income taxes

  471   78   (2,779)  (2,230)

Income tax expense

  7   31   —   38 

Net income (loss)

 $464  $47  $(2,779) $(2,268)

 

Unallocated operating expenses in Corporate include costs for the three and six months ended June 30, 2024 and 2023 that are not specific to a particular segment but are general to the group; included are expenses incurred for administrative and accounting staff, general liability and other insurance, professional fees, and other similar corporate expenses.

 

For the three and six months ended June 30, 2024 and 2023, there was no material revenue attributable to any individual foreign country.

 

Revenue by geographic area is allocated as follows (in thousands):

 

  

Three Months Ended June 30,

  

Six Months Ended June 30,

 
  

2024

  

2023

  

2024

  

2023

 

Domestic

 $209  $437  $470  $1,000 

Foreign

 $402  $519   767   994 
  $611  $956  $1,237  $1,994 

 

Disaggregated information for the Company’s revenue has been recognized in the accompanying Condensed Consolidated Statements of Operations and is presented below according to contract type (in thousands):

 

  

Three Months Ended June 30,

 
  

2024

  

% of Revenue

  

2023

  

% of Revenue

 

Revenue: Managed Services

                

Video collaboration services

 $21   3% $46   5%

Network services

  484   79%  583   61%

Professional and other services

  3   0%  11   1%

Total Managed Services revenue

 $508   83% $640   67%
                 

Revenue: Collaboration Products

                

Visual collaboration product offerings

 $103   17% $316   33%

Total revenue

 $611   100% $956   100%

 

 

  

Six Months Ended June 30,

 
  

2024

  

% of Revenue

  

2023

  

% of Revenue

 

Revenue: Managed Services

                

Video collaboration services

 $35   3% $110   6%

Network services

  987   80%  1,201   60%

Professional and other services

  8   1%  19   1%

Total Managed Services revenue

 $1,030   83% $1,330   67%
                 

Revenue: Collaboration Products

                

Visual collaboration product offerings

 $207   17% $664   33%

Total revenue

 $1,237   100% $1,994   100%

 

The Company considers a significant customer to be one that comprises more than 10% of the Company’s consolidated revenues or accounts receivable. The loss of or a reduction in sales or anticipated sales to our most significant or several of our smaller customers could have a material adverse effect on our business, financial condition, and results of operations.

 

Concentration of consolidated revenues was as follows:

 

   

Three Months Ended June 30,

 
   

2024

  

2023

 
 

Segment

 

% of Revenue

  

% of Revenue

 

Customer A

Managed Services

  81%  56%

 

 

   

Six Months Ended June 30,

 
   

2024

  

2023

 
 

Segment

 

% of Revenue

  

% of Revenue

 

Customer A

Managed Services

  81%  54%

 

Concentration of accounts receivable was as follows:

 

   

As of June 30, 2024

 
   

2024

  

2023

 
   

% of Accounts

  

% of Accounts

 
 

Segment

 

Receivable

  

Receivable

 

Customer A

Managed Services

  —%  58%

Customer B

Collaboration Products

  40%  —%

Customer C

Collaboration Products

  —%  14%

Customer D

Managed Services

  12%  2%

Customer E

Collaboration Products

  12%  —%

Customer F

Managed Services

  —%  11%