Note 16

Business Segments:

The Company organized its business into two operating segments to better align its organization based upon the Company’s management structure, products and services offered, markets served and types of customers, as follows: The Dermatology Recurring Procedures segment derives its revenues from the usage of its equipment by dermatologists to perform XTRAC procedures. The Dermatology Procedures Equipment segment generates revenues from the sale of equipment, such as lasers and lamp products. Management reviews financial information presented on an operating segment basis for the purposes of making certain operating decisions and assessing financial performance.

Unallocated operating expenses include costs 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 financing income (expense), net, is also not allocated to the operating segments.

The following tables reflect results of operations from our business segments for the periods indicated below:

Year Ended December 31, 2019

	Dermatology Recurring Procedures			Dermatology Procedures Equipment			TOTAL
Revenues	$	23,713		$	7,873		$	31,586
Costs of revenues		7,033			4,283			11,316
Gross profit		16,680			3,590			20,270
Gross profit %		70.3	%		45.6	%		64.2	%

Allocated operating expenses:
Engineering and product development		845			157			1,002
Selling and marketing expenses		11,191			812			12,003
Unallocated operating expenses					-			10,275
		12,036			969			23,280
Income (loss) from operations		4,644			2,621			(3,010	)
Interest expense, net								(515	)
Loss on extinguishment of debt		-			-			(414	)
Income (loss) before income taxes	$	4,644		$	2,621		$	(3,939	)

Year Ended December 31, 2018

	Dermatology Recurring Procedures			Dermatology Procedures Equipment			TOTAL
Revenues	$	21,053		$	8,802		$	29,855
Costs of revenues		7,378			5,357			12,735
Gross profit		13,675			3,445			17,120
Gross profit %		65.0	%		39.1	%		57.3	%

Allocated operating expenses:
Engineering and product development		855			210			1,065
Selling and marketing expenses		9,249			1,375			10,624
Unallocated operating expenses		-			-			8,786
		10,104			1,585			20,475
Income (loss) from operations		3,571			1,860			(3,355	)
Interest expense, net		-			-			(1,142	)
Other income, net		-			-			200
Income (loss) before income taxes	$	3,571		$	1,860		$	(4,297	)

As of December 31, 2019, and 2018, total assets by reportable segment were as follows:

	December 31,
Assets:	2019		2018
Dermatology Recurring Procedures	$	27,620	$	26,789
Dermatology Procedures Equipment		3,382		3,476
Other unallocated assets		16,341		17,242
Consolidated total	$	47,343	$	47,507

Substantially all long-lived assets were located in domestic markets for both of the years ended December 31, 2019, and 2018.