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Note 8 - Segment Reporting
 9 Months Ended
Sep. 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 nine months ended September 30, 2024 and 2023 is presented in the following tables (in thousands):

 

  

Three Months Ended September 30, 2024

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $510  $68  $—  $578 

Cost of revenues

  295   204   —   499 

Gross profit

 $215  $(136) $—  $79 

Gross profit %

  42%  (200)%     14%
                 

Allocated operating expenses

 $60  $104  $—  $164 

Unallocated operating expenses

  —   —   987   987 

Total operating expenses

 $60  $104  $987  $1,151 
                 

Operating income (loss)

 $155  $(240) $(987) $(1,072)

Interest income, net

  (31)  (1)  —   (32)

Income (loss) before income taxes

  186   (239)  (987)  (1,040)

Income tax expense

  —   —   —   — 

Net income (loss)

 $186  $(239) $(987) $(1,040)

 

  

Three Months Ended September 30, 2023

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $603  $269  $—  $872 

Cost of revenues

  398   250   —   648 

Gross profit

 $205  $19  $—  $224 

Gross profit %

  34%  7%     26%
                 

Allocated operating expenses

 $—  $151  $—  $151 

Unallocated operating expenses

  —   —  $998   998 

Total operating expenses

 $—  $151  $998  $1,149 
                 

Operating income (loss)

 $205  $(132) $(998) $(925)

Interest income, net

  (35)  5   —   (30)

Income (loss) before income taxes

  240   (137)  (998)  (895)

Income tax expense

  —   —   —   — 

Net income (loss)

 $240  $(137) $(998) $(895)

 

  

Nine Months Ended September 30, 2024

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $1,540  $275  $—  $1,815 

Cost of revenues

  995   624   —   1,619 

Gross profit

 $545  $(349) $—  $196 

Gross profit %

  35%  (127)%     11%
                 

Allocated operating expenses

 $122  $347  $—  $469 

Unallocated operating expenses

  —   —   3,001   3,001 

Total operating expenses

 $122  $347  $3,001  $3,470 
                 

Operating income (loss)

 $423  $(696) $(3,001) $(3,274)

Interest income, net

  (98)  (26)  —   (124)

Income (loss) before income taxes

  521   (670)  (3,001)  (3,150)

Income tax expense

  6   3   —   9 

Net income (loss)

 $515  $(673) $(3,001) $(3,159)

 

 

  

Nine Months Ended September 30, 2023

 
  

Managed Services

  

Collaboration Products

  

Corporate

  

Total

 

Revenue

 $1,933  $933  $—  $2,866 

Cost of revenues

  1,288   956   —   2,244 

Gross profit

 $645  $(23) $—  $622 

Gross profit %

  33%  (2)%     22%
                 

Allocated operating expenses

 $3  $61  $—  $64 

Unallocated operating expenses

  —   —   3,777   3,777 

Total operating expenses

 $3  $61  $3,777  $3,841 
                 

Operating income (loss)

 $642  $(84) $(3,777) $(3,219)

Interest income, net

  (69)  (25)  —   (94)

Income (loss) before income taxes

  711   (59)  (3,777)  (3,125)

Income tax expense

  7   31   —   38 

Net income (loss)

 $704  $(90) $(3,777) $(3,163)

 

Unallocated operating expenses in Corporate include costs for the three and nine months ended September 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 months ended September 30, 2023, 11% of our revenue was attributable to the United Kingdom. For the three months ended September 30, 2024, and the nine months ended September 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 September 30,

  

Nine Months Ended September 30,

 
  

2024

  

2023

  

2024

  

2023

 

Domestic

 $227  $356  $698  $1,356 

Foreign

 $351  $516   1,117   1,510 
  $578  $872  $1,815  $2,866 

 

 

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 September 30,

 
  

2024

  

% of Revenue

  

2023

  

% of Revenue

 

Revenue: Managed Services

                

Video collaboration services

 $6   1% $38   4%

Network services

  502   87%  557   64%

Professional and other services

  2   —%  8   1%

Total Managed Services revenue

 $510   88% $603   69%
                 

Revenue: Collaboration Products

                

Visual collaboration product offerings

 $68   12% $268   31%

Professional and other services

  -   —%  1   —%

Total Collaboration Products revenue

 $68   12% $269   31%

Total revenue

 $578   100% $872   100%

 

 

 

  

Nine Months Ended September 30,

 
  

2024

  

% of Revenue

  

2023

  

% of Revenue

 

Revenue: Managed Services

                

Video collaboration services

 $41   2% $148   5%

Network services

  1,489   82%  1,758   61%

Professional and other services

  10   1%  27   1%

Total Managed Services revenue

 $1,540   85% $1,933   67%
                 

Revenue: Collaboration Products

                

Visual collaboration product offerings

 $275   15% $932   33%

Professional and other services

  -   —%  1   —%

Total Collaboration Products revenue

 $275   15% $933   33%

Total revenue

 $1,815   100% $2,866   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 September 30,

 
   

2024

  

2023

 
 

Segment

 

% of Revenue

  

% of Revenue

 

Customer A

Managed Services

  87%  60%

 

 

   

Nine Months Ended September 30,

 
   

2024

  

2023

 
 

Segment

 

% of Revenue

  

% of Revenue

 

Customer A

Managed Services

  83%  56%

 

Concentration of accounts receivable was as follows:

 

   

As of September 30,

 
   

2024

  

2023

 
   

% of Accounts

  

% of Accounts

 
 

Segment

 

Receivable

  

Receivable

 

Customer A

Managed Services

  15%  —%

Customer B

Collaboration Products

  55%  —%

Customer C

Collaboration Products

  —%  38%

Customer D

Collaboration Products

  —%  12%

Customer E

Managed Services

  11%  —%

Customer F

Collaboration Products

  11%  —%