11. Segment Reporting and Geographic Information

ASC 280, Segment Reporting (“ASC 280”) establishes standards for the reporting by public business enterprises of information about operating segments, products and services, geographic areas, and major customers. 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 its CEO.

The Company is organized into four reportable operating segments: Premises, Identity, Credentials and All Other.

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.

Net revenue and gross profit information by segment for the three months ended March 31, 2018 and 2017 is as follows (in thousands):

	Three Months Ended March 31,
	2018			2017
Premises:
Net revenue	$	7,506		$	5,364
Gross profit		4,155			3,099
Gross profit margin		55	%		58	%
Identity:
Net revenue		2,780			3,089
Gross profit		929			1,124
Gross profit margin		33	%		36	%
Credentials:
Net revenue		6,242			4,935
Gross profit		1,424			1,470
Gross profit margin		23	%		30	%
All Other:
Net revenue		—			4
Gross profit		—			4
Gross profit margin		—			100	%
Total:
Net revenue		16,528			13,392
Gross profit		6,508			5,697
Gross profit margin		39	%		43	%
Operating expenses:
Research and development		1,687			1,477
Selling and marketing		3,903			3,379
General and administrative		2,555			1,787
Restructuring and severance		110			—
Total operating expenses:		8,255			6,643
Loss from operations		(1,747	)		(946	)
Non-operating income (expense):
Interest expense, net		(476	)		(674	)
Gain on extinguishment of debt		—			977
Foreign currency (losses) gains, net		(38	)		(152	)
Loss before income taxes and noncontrolling interest	$	(2,261	)	$	(795	)

Geographic net revenue is based on the customer’s ship-to location. Information regarding net revenue by geographic region for the three months ended March 31, 2018 and 2017 is as follows (in thousands):

	Three Months Ended
	March 31,
	2018			2017
Americas	$	13,232		$	9,108
Europe and the Middle East		2,308			1,879
Asia-Pacific		988			2,405
Total	$	16,528		$	13,392
Revenues:
Americas		80	%		68	%
Europe and the Middle East		14	%		14	%
Asia-Pacific		6	%		18	%
Total		100	%		100	%

Long-lived assets by geographic location as of March 31, 2018 and December 31, 2017 are as follows (in thousands):

	March 31,		December 31,
	2018		2017
Property and equipment, net:
Americas	$	1,123	$	868
Europe and the Middle East		62		89
Asia-Pacific		966		1,086
Total property and equipment, net	$	2,151	$	2,043