SEGMENT REPORTING

9 Months Ended

Sep. 30, 2021

SEGMENT REPORTING

NOTE 18 - SEGMENT REPORTING

NOTE 18 – SEGMENT REPORTING

Business Segments

The Company manages its operations through two business segments: Cure, which develops and manufactures pharmaceutical and wellness products, and Sera Labs, which sells wellness products through direct to consumer and wholesale channels.

The Company evaluates performance based on net operating profit. Administrative functions such as finance, treasury, and information systems are centralized. However, where applicable, portions of the administrative function expenses are allocated between the operating segments. The operating segments do not share manufacturing or distribution facilities. In the event any materials and/or services are provided to one operating segment by the other, the transaction is valued according to the company’s transfer policy, which approximates market price. The costs of operating the manufacturing plant is captured discretely in the Cure segment. The Company’s property, plant and equipment, inventory, and accounts receivable are captured and reported discretely within each operating segment.

Summary financial information for the two reportable segments for the nine months ending September 30, 2021 is as follows (in thousands):

	Cure			Sera Labs			Eliminations			Consolidated
Net Sales	$	386		$	4,654		$	(126	)	$	4,914
Operating Loss	$	(7,019	)	$	(5,689	)	$	-		$	(12,708	)
Assets	$	46,604		$	9,450		$	(14,175	)	$	41,879
Accounts receivable, net	$	22		$	186		$	-		$	208
Inventory, net	$	368		$	592		$	-		$	960

Summary financial information for the two reportable segments for the nine months ending September 30, 2020 is as follows (in thousands):

	Cure			Sera Labs		Eliminations		Consolidated
Net Sales	$	741		$	-	$	-	$	741
Operating Loss	$	(14,258	)	$	-	$	-	$	(14,258	)
Assets	$	30,066		$	-	$	-	$	30,066
Accounts receivable, net	$	46		$	-	$	-	$	46
Inventory, net	$	228		$	-	$	-	$	228

Disaggregation of Revenues and Concentration Risk

The following table presents the percentage of consolidated revenues attributable to products or services classes that represent greater than ten percent of consolidated revenues for the three and nine months September 30, 2021 and 2020:

	Three Months Ended						Nine months Ended
	September 30, 2021			September 30, 2020			September 30, 2021			September 30, 2020
CureFilm™ sales		21	%		98	%		14	%		75	%
Research & Development services		-			-			1			23
Product sales - CBD		78			-			77			-
Product sales – PPE		-			-			7			-
Other sales less than 10%		1			2			1			2
Total		100	%		100	%		100	%		100	%

The Company did not receive revenue from one customer that individually represents 10% or more of consolidated revenues for the three and nine months ended September 30, 2021. The Company received revenue from two customers that individually represent greater than 10% of consolidated revenues, representing 81% of consolidated revenues for the three months ended September 30, 2020, and three customers that individually represent greater than 10% of consolidated revenues, representing 74% of consolidated revenues for the nine months ended September 30, 2020. Accounts receivable from these customers was $0.04 million and $0.13 million at September 30, 2021 and December 31, 2020, respectively.