Note 16 - Segment Reporting

Prior to the acquisition of Oblong Industries on October 1, 2019, the Company operated in one segment. Effective October 1, 2019, the former businesses of Glowpoint and Oblong Industries were managed separately during the fourth quarter of 2019 and involve different products and services. Accordingly, the Company currently operates in two segments: (1) the Glowpoint (now named Oblong) business which mainly consists of managed services for video collaboration and network applications; and (2) the Oblong Industries business which consists of products and services for visual collaboration technologies.

Because the closing of the acquisition of Oblong Industries occurred on October 1, 2019, the Company’s consolidated financial statements as of and for the years ended December 31, 2019 and 2018 included in this Report only reflect Oblong Industries’ financial results for the fourth quarter of 2019. Certain information concerning the Company’s segments for the year ended December 31, 2019 is presented in the following tables (in thousands):



	For the Year Ended December 31, 2019
	Glowpoint			Oblong Industries			Total
Revenue	$	9,660		$	3,167		$	12,827
Cost of revenues	6,269			1,158			7,427
Gross profit	$	3,391		$	2,009		$	5,400
Gross profit %	35		%	63		%	42		%

Allocated operating expenses	$	6,835		$	5,183		$	12,018
Unallocated operating expenses	—			—			956
Total operating expenses	$	6,835		$	5,183		$	12,974

Loss from operations	$	(3,444	)	$	(3,173	)	$	(7,574	)
Interest and other expense, net	—			—			(187		)
Loss before income taxes	$	(3,444	)	$	(3,173	)	$	(7,761	)

	As of December 31, 2019
Total assets	$	5,942		$	28,967		$	34,909

Unallocated operating expenses include costs during the fourth quarter of 2019 (after the October 1, 2019 acquisition date) 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. Interest and other expense, net, is also not allocated to the operating segments.

For the years ended December 31, 2019 and 2018, there was no material revenue attributable to any individual foreign country. Approximately 1% of foreign revenue is billed in foreign currency and foreign currency gains and losses are not material. Revenue by geographic area is allocated as follows (in thousands):



	Year Ended December 31,
	2019		2018
Domestic	$	9,096	$	8,423
Foreign	3,731		4,134
	$	12,827	$	12,557

Disaggregated information for the Company’s revenue has been recognized in the accompanying consolidated statements of operations and is presented below according to contract type (dollars in thousands):



	Year Ended December 31,
	2019		% of Revenue		2018		% of Revenue
Revenue: Glowpoint
Video collaboration services	$	5,566	43	%	$	7,589	60	%
Network services	3,860		30	%	4,351		35	%
Professional and other services	234		2	%	617		5	%
Total Glowpoint revenue	$	9,660	75	%	$	12,557	100	%

Revenue: Oblong
Visual collaboration product offerings	$	2,180	17	%	$	—	—	%
Professional services	709		6	%	—		—	%
Licensing	278		2	%	—		—	%
Total Oblong Industries revenue	$	3,167	25	%	$	—	—	%
Total revenue	$	12,827	100	%	$	12,557	100	%

Glowpoint’s fixed assets were 100% located in domestic markets during both years ended December 31, 2019 and 2018. Oblong Industries’ long-lived assets were located 83% in domestic and 17% in foreign markets for the year ended December 31, 2019.

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 revenues was as follows:



		Year Ended December 31,
		2019		2018
	Segment	% of Revenue		% of Revenue
Customer A	Glowpoint	20	%	25	%
Customer B	Glowpoint	18	%	21	%

Concentration of accounts receivable was as follows:



		December 31, 2019		December 31, 2018
	Segment	% of Accounts Receivable		% of Accounts Receivable
Customer A	Glowpoint	12	%	54	%
Customer B	Glowpoint	*		*
Customer C	Oblong Industries	18	%	*
Customer D	Oblong Industries	16	%	*

* The amount did not exceed 10% of the Company’s consolidated total accounts receivable.