Note 21 - Segment Information

9 Months Ended

Sep. 30, 2020

Notes

Note 21 - Segment Information

Note 21 – Segment Information

The Company is an operating, acquisition, and investment business. Subsidiaries in which the Company has a controlling financial interest are consolidated. The Company has determined that there are two reportable segments; 1) the cannabis and medical marijuana segment which includes the cost basis of membership interests of Electrum, the contractual interest in the Electrum legal recovery, the notes receivable from G Farma, the contractual interest in the G Farma legal recovery, the equity in G Farma Equity Entities, finance leases to G Farma and finance leases to Pueblo West, the operation of subsidiaries in the cannabis and medical marijuana sector, and in 2019, included the fair value of cannabis stock securities investments, and 2) the Company’s long standing investment in WCI which works with business park owners, governmental centers, and apartment complexes to reduce their facility related operating costs. The Company also has a small investment in General Dynamics Corp. (NYSE: GD), an aerospace and defense corporation, an investment in note receivable from a non-affiliated party, the fair value of convertible notes receivable and accrued interest from NeuCourt, and the investment in Neucourt that is included in the Corporate, Other, and Eliminations section below. The NeuCourt investments were previously reported as an investment that would be useful in the cannabis space, however, NeuCourt has determined it will not become a cannabis legal services company. Prior period segment information presented below contains reclassification of NeuCourt investments from the cannabis and medical marijuana segment to the Corporate, other, and eliminations segment.

		Cannabis and Medical Marijuana Segment		Facility Operations Related		Corporate, Other and Eliminations		Consolidated
Three months ended September 30, 2020
Net revenue	$	11,730	$	1,219,800	$	-	$	1,231,530
Operating income (loss)		4,516		(230,490)		(189,005)		(414,979)
Interest income		8		-		24,960		24,968
Interest expense		-		9,517		(1,004)		8,513
Property additions		-		6,490		2,581		9,071
Depreciation and amortization		-		3,892		2,038		5,930
Three months ended September 30, 2019
Net revenue	$	13,312	$	1,058,025	$	-	$	1,071,337
Operating income (loss)		(38,426)		9,276		(280,397)		(309,547)
Interest income		30		4		21,507		21,541
Interest expense		-		7,214		(1,134)		6,080
Property additions		-		-		-		-
Depreciation and amortization		-		2,653		2,932		5,585
Nine months ended September 30, 2020
Net revenue	$	36,297	$	3,503,563	$	-	$	3,539,860
Operating income (loss)		(16,624)		(174,878)		(665,076)		(856,578)
Interest income		-		-		65,504		65,504
Interest expense		-		25,829		(3,132)		22,697
Property additions		-		23,231		7,593		30,824
Depreciation and amortization		-		10,190		4,679		14,869
Total assets		2,095,569		1,955,675		702,561		4,753,805
Nine months ended September 30, 2019
Net revenue	$	145,564	$	3,031,519	$	-	$	3,177,083
Operating income (loss)		(734,818)		67,162		(784,471)		(1,452,127)
Interest income		19,745		10		67,251		87,006
Interest expense		-		19,857		(3,402)		16,455
Property additions		-		8,159		-		8,159
Depreciation and amortization		-		7,959		8,796		16,755
Total assets		2,661,427		1,662,764		945,089		5,269,280

The following table reconciles operating segments and corporate-unallocated operating income (loss) to consolidated income before income taxes, as presented in the unaudited condensed consolidated income statements:

		Three Months Ended September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019
Operating loss	$	(414,979)	$	(309,547)	$	(856,578)	$	(1,452,127)
Gain (loss) on investments		(2,758)		(45,638)		(8,676)		(1,747,608)
Interest income		24,968		21,541		65,504		87,006
Interest expense		(8,513)		(6,080)		(22,697)		(16,455)
Gain on equipment disposals		3,372		-		3,372		1,500
EIDL Advance		-		-		10,000		-
Other income		7,994		-		24,352		11,340
Income before income taxes	$	(389,916)	$	(339,724)	$	(784,723)	$	(3,116,344)