9. Segment Reporting and Geographic Information

ASC Topic 280, Segment Reporting (“ASC 280”) establishes standards for the reporting by public business enterprises of information about operating segments, products and services and by geographic areas. The method for determining what information to report is based on the way management organizes the operating segments within the Company for making operating decisions and assessing financial performance. An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenue and incur expenses and about which separate financial information is available to its chief operating decision makers (“CODM”). The Company’s CODM is considered its CEO.

The CODM reviews financial information and business performance for each operating segment. The Company evaluates the performance of its operating segments at the revenue and gross profit levels. The Company does not report total assets, capital expenditures or operating expenses by operating segment as such information is not used by the CODM for purposes of assessing performance or allocating resources or has not been accounted for at the segment level.

Net revenue and gross profit information by segment for the years ended December 31, 2017 and 2016 are as follows (in thousands):

	Year Ended December 31,
	2017			2016
Premises:
Net revenue	$	24,154		$	24,696
Gross profit		13,669			14,034
Gross profit margin		57	%		57	%
Identity:
Net revenue		14,293			12,902
Gross profit		5,117			5,015
Gross profit margin		36	%		39	%
Credentials:
Net revenue		21,772			17,992
Gross profit		3,374			4,427
Gross profit margin		15	%		25	%
All Other:
Net revenue		—			578
Gross profit		—			253
Gross profit margin		—			44	%
Total:
Net revenue		60,219			56,168
Gross profit		22,160			23,729
Gross profit margin		37	%		42	%
Operating expenses:
Research and development		6,146			6,520
Selling and marketing		13,452			14,032
General and administrative		7,241			11,309
Restructuring and severance		(49	)		3,088
Total operating expenses:		26,790			34,949
Loss from operations		(4,630	)		(11,220	)
Non-operating income (expense):
Interest expense, net		(2,590	)		(2,378	)
Loss on extinguishment of debt		(788	)		—
Foreign currency (losses) gains, net		(358	)		27
Loss before income taxes and noncontrolling interest	$	(8,366	)	$	(13,571	)

Geographic net revenue is based on the customer’s ship-to location. Information regarding net revenue by geographic region is as follows (in thousands):

	Year Ended December 31,
	2017			2016
Americas	$	40,018		$	38,135
Europe and the Middle East		7,887			8,589
Asia-Pacific		12,314			9,444
Total	$	60,219		$	56,168
Revenues:
Americas		67	%		68	%
Europe and the Middle East		13	%		15	%
Asia-Pacific		20	%		17	%
Total		100	%		100	%

Long-lived assets by geographic location as of December 31, 2017 and 2016 are as follows (in thousands):

	December 31,
	2017		2016
Property and equipment, net:
Americas	$	868	$	1,100
Europe and the Middle East		89		162
Asia-Pacific		1,086		1,154
Total property and equipment, net	$	2,043	$	2,416

The Company’s net revenue is represented by the following product categories as of December 31, 2017 and 2016 (in thousands):

	Year Ended December 31,
	2017		2016
Logical and physical access control readers	$	18,601	$	17,671
Controller panels		14,637		14,919
Tags and transponders		13,089		10,890
Access cards and provisioning		8,396		7,107
Services		3,816		3,258
Third party access control products		1,014		1,645
Software		666		100
Other		—		578
Total	$	60,219	$	56,168