Segment Information

6 Months Ended

Jun. 30, 2013

Segment Information

Segment Information

In January 2013, the Company began operating in two reportable segments: Internet Marketing and Nutraceutical Products. Effective May 16, 2013, upon consummation of the merger with SHC Parent Corp. and its subsidiaries, referred to collectively as the “SkyMall Companies”, the Company began operating a third reportable segment, SkyMall Products. Each segment is managed separately and provides different products and services.

The accounting policies of the segments are the same as described above, but research and development costs and certain selling, general and administrative costs have not been allocated to the segments. As a result, the segment information presented below is reflective of the manner in which management evaluates profitability for the segments. Further, the Company manages its working capital on a consolidated basis and does not allocate long-lived assets to the segments. Accordingly, total assets by segment have not been disclosed.

The following table presents information by segment for the six and three months ended June 30, 2013:

For the six months ended June 30, 2013
	Internet		Nutraceutical
	Marketing		Products			SkyMall			Corporate			Consolidated
Revenues	$	3,083,263	$	6,860,936		$	10,346,666		$	-		$	20,290,865
Cost of revenues		1,107,327		6,528,360			6,586,102			-			14,221,789
Gross profit		1,975,936		332,576			3,760,564			-			6,069,076
Research and development		-		-			-			628,808			628,808
Selling, general and administrative		904,995		809,587			4,739,668			4,290,894			10,745,144
Segment operating income (loss)		1,070,941		(477,011	)		(979,104	)		(4,919,702	)		(5,304,876	)
Interest and other expense		2,629		-			8,595			91,522			102,746
Net income (loss)	$	1,068,312	$	(465,579	)	$	(987,699	)	$	(5,011,224	)	$	(5,407,622	)

For the three months ended June 30, 2013
	Internet		Nutraceutical
	Marketing		Products			SkyMall			Corporate			Consolidated
Revenues	$	1,580,984	$	4,604,091		$	10,346,666		$	-		$	16,531,741
Cost of revenues		922,038		4,087,300			6,586,102			-			11,595,440
Gross profit		658,946		516,791			3,760,564			-			4,936,301
Research and development		-		-			-			357,242			357,242
Selling, general and administrative		287,658		530,043			4,739,668			3,331,483			8,888,852
Segment operating income (loss)		371,288		(13,252	)		(979,104	)		(3,688,725	)		(4,309,793	)
Interest and other expense		1,642		-			8,595			17,883			28,120
Net income (loss)	$	369,646	$	(13,252	)	$	(987,699	)	$	(3,706,608	)	$	(4,337,913	)

	June 30,
Property and equipment, net	2013		2012
SkyMall	$	5,516,189	$	-
Internet marketing		52,587		-
Nutraceutical products		5,502		-
Corporate		1,401,769		1,374,827
	$	6,976,047	$	1,374,827
	Six Months Ended
	June 30,
Additions to property and equipment		2013		2012
SkyMall	$	309,276	$	-
Internet marketing		24,576		-
Nutraceutical products		6,568		-
Corporate		173,973		564,131
	$	514,393	$	564,131