Segment Information

6 Months Ended

Jun. 30, 2014

Segment Information [Abstract]

Segment Information

Note 8. Segment Information

Andrea follows the provisions of ASC 280 “Segment Reporting” (“ASC 280”). Reportable operating segments are determined based on Andrea’s management approach. The management approach, as defined by ASC 280, is based on the way that the chief operating decision-maker organizes the segments within an enterprise for making operating decisions and assessing performance. While Andrea’s results of operations are primarily reviewed on a consolidated basis, the chief operating decision-maker also manages the enterprise in two segments: (i) Andrea DSP Microphone and Audio Software Products and (ii) Andrea Anti-Noise Products. Andrea DSP Microphone and Audio Software Products primarily include products based on the use of some, or all, of the following technologies: Andrea Digital Super Directional Array microphone technology (“DSDA”), Andrea Direction Finding and Tracking Array microphone technology (“DFTA”), Andrea PureAudio noise filtering technology, and Andrea EchoStop, an advanced acoustic echo cancellation technology. Andrea Anti-Noise Products include noise cancellation and active noise cancellation computer headset products and related computer peripheral products.

The following represents selected condensed consolidated interim financial information for Andrea’s segments for the three-month periods ending June 30, 2014 and 2013.

2014 Three Month Segment Data	Andrea DSP Microphone and Audio Software Products			Andrea Anti- Noise Products			2014 Three Month Total
Net revenues from external customers	$	36,022		$	345,572		$	381,594
License revenues		217,627			—			217,627
Loss from operations		(106,712	)		(236,143	)		(342,855	)
Depreciation and amortization		13,896			14,279			28,175
Purchases of patents and trademarks		17,897			—			17,897
Assets		3,642,852			1,243,245			4,886,097
Property and equipment and intangibles		348,711			146,634			495,345
2013 Three Month Segment Data		Andrea DSP Microphone and Audio Software Products			Andrea Anti- Noise Products			2013 Three Month Total
Net revenues from external customers	$	33,358		$	311,850		$	345,208
License revenues		626,413			—			626,413
Income (loss) from operations		347,773			(285,729	)		62,044
Depreciation and amortization		120,034			19,762			139,796
Purchases of patents and trademarks		13,018			273			13,291
December 31, 2013 Year End Segment Data		Andrea DSP Microphone and Audio Software Products			Andrea Anti- Noise Products			2013 Year End Total
Assets	$	1,277,040		$	1,511,870		$	2,788,910
Property and equipment and intangibles		334,645			175,190			509,835

The following represents selected condensed consolidated interim financial information for Andrea’s segments for the six-month periods ending June 30, 2014 and 2013:

2014 Six Month Segment Data	Andrea DSP Microphone and Audio Software Products			Andrea Anti- Noise Products			2014 Six Month Total
Net revenues from external customers	$	53,719		$	752,036		$	805,755
License revenues		412,471			—			412,471
Loss from operations		(748,281	)		(526,370	)		(1,274,651	)
Depreciation and amortization		27,745			28,556			56,301
Purchases of patents and trademarks		41,811			—			41,811
2013 Six Month Segment Data		Andrea DSP Microphone and Audio Software Products			Andrea Anti- Noise Products			` 2013 Six Month Total
Net revenues from external customers	$	76,753		$	794,616		$	871,369
License revenues		775,832			—			775,832
Income (loss) from operations		195,420			(532,933	)		(337,513	)
Depreciation and amortization		240,081			40,027			280,108
Purchases of patents and trademarks		9,001			2,997			11,998

Management assesses non-operating income statement data on a consolidated basis only. International revenues are based on the country in which the end-user is located. For the three-month periods ending June 30, 2014 and 2013, net revenues by geographic area are as follows:

Geographic Data	June 30, 2014		June 30, 2013
Net revenues:
United States	$	339,697	$	330,155
Foreign(1)		259,524		641,466
	$	599,221	$	971,621

(1) Net revenue from the People’s Republic of China and Singapore represented 36% and 60% of total net revenues for the three months ending June 30, 2014 and June 30, 2013, respectively.

For the six-month periods ending June 30, 2014 and 2013, net revenues by geographic area are as follows:

Geographic Data	June 30, 2014		June 30, 2013
Net revenues:
United States	$	662,886	$	800,885
Foreign(1)		555,340		846,316
	$	1,218,226	$	1,647,201

(1) Net revenue from the People’s Republic of China and Singapore represented 33% and 42% of total net revenues for the six months ending June 30, 2014 and June 30, 2013, respectively.

As of June 30, 2014 and December 31, 2013, accounts receivable by geographic area is as follows:

Geographic Data	June 30, 2014		December 31, 2013
Accounts receivable:
United States	$	86,390	$	141,621
Foreign		187,152		227,370
	$	273,542	$	368,991