Note 19 - Segment Reporting

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

NOTE 19. SEGMENT REPORTING

The Company’s chief operating decision maker (“CODM”), who is the Company’s Chief Executive Officer, allocates resources and assesses performance based on financial information of the Company. The CODM reviews financial information presented for each reportable segment for purposes of making operating decisions and assessing financial performance.

Prior to the DERMAdoctor Acquisition in November 2021 (see Note 3, “Business Combination”), the Company was managed as a single segment primarily focused on commercializing Avenova in the United States. After the DERMAdoctor Acquisition, the Company began managing and aggregating its operational and financial information in accordance with two reportable segments: (1) Optical &Wound Care and (2) Skin Care. The Optical & Wound Care segment consists of products historically sold by NovaBay prior to the DERMAdoctor Acquisition. The Skin Care segment consists of products acquired in the DERMAdoctor Acquisition and skincare products subsequently sold under the DERMAdoctor brand.

Select financial information for each segment is as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Net sales
Optical & Wound Care	$	2,507		$	2,265		$	7,646		$	7,031
Skin Care		1,319			—			3,115			—
Consolidated	$	3,826		$	2,265		$	10,761		$	7,031
Operating loss
Optical & Wound Care	$	(257	)	$	(2,289	)	$	(3,605	)	$	(5,668	)
Skin Care		(200	)		—			(1,386	)		—
Consolidated	$	(457	)	$	(2,289	)	$	(4,991	)	$	(5,668	)

The Company’s reportable segments are strategic business units that offer different products. Each segment is managed independently because they require different operations and markets to distinct classes of customers. Operating costs included in one segment may benefit other segments, and therefore these segments are not designed to measure operating income or loss directly related to the products included in each segment. Management will continually evaluate the alignment of product development organizations, sales organizations, and inter-segment commissions for segment reporting purposes, which may result in changes to segment allocations in future periods.