Note 9 - Segment Information

6 Months Ended

Jun. 30, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note 9.     Segment Information

Andrea follows the provisions of ASC 280 “Segment Reporting.” 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) Patent Monetization and (ii) Andrea DSP Microphone and Audio Software Products. Patent Monetization includes Monetization Revenues (as defined in our Amended and Restated Revenue Sharing Agreement). 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.

The following represents selected unaudited condensed consolidated interim financial information for Andrea’s segments for the three and six month periods ended June 30, 2022 and 2021 and the fiscal year ended December 31, 2021.

2022 Three Month Segment Data	Patent Monetization			Andrea DSP Microphone and Audio Software Products		2022 Three Month Segment Data
Net product revenues	$	-		$	585,087	$	585,087
License revenues		60			6,990		7,050
Operating (loss) income		(60,453	)		50,701		(9,752	)
Depreciation and amortization		4,522			7,939		12,461
Assets		111,989			1,155,576		1,267,565
Total long lived assets		88,330			270,280		358,610
Purchases of property and equipment		-			7,509		7,509
Payments for patents and trademarks		270			270		540

2021 Three Month Segment Data	Patent Monetization			Andrea DSP Microphone and Audio Software Products			2021 Three Month Segment Data
Net product revenues	$	-		$	383,888		$	383,888
Service related revenues		-			3,840			3,840
License revenues		73			2,794			2,867
Operating loss		(82,297	)		(65,362	)		(147,659	)
Depreciation and amortization		3,799			5,324			9,123
Purchases of property and equipment		-			5,511			5,511
Payments for patents and trademarks		1,124			1,125			2,249

December 31, 2021 Year End Segment Data	Patent Monetization		Andrea DSP Microphone and Audio Software Products		2021 Year End Segment Data
Assets	$	188,717	$	949,727	$	1,138,444
Total long lived assets		97,100		298,487		395,587

2022 Six Month Segment Data	Patent Monetization			Andrea DSP Microphone and Audio Software Products		2022 Six Month Segment Data
Net product revenues	$	-		$	1,094,555	$	1,094,555
License revenues		98			8,070		8,168
Operating (loss) income		(127,015	)		43,373		(83,642	)
Depreciation and amortization		9,040			15,687		24,727
Purchases of property and equipment		-			9,803		9,803
Payments for patents and trademarks		270			270		540

2021 Six Month Segment Data	Patent Monetization			Andrea DSP Microphone and Audio Software Products			2021 Six Month Segment Data
Net product revenues	$	-		$	807,103		$	807,103
Service related revenues		-			3,840			3,840
License revenues		157			5,979			6,136
Operating loss		(166,443	)		(110,993	)		(277,436	)
Depreciation and amortization		7,558			10,739			18,297
Purchases of property and equipment		-			5,511			5,511
Payments for patents and trademarks		1,305			1,304			2,609

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 ended June 30, 2022 and 2021, total revenues by geographic area were as follows:

Geographic Data	June 30, 2022		June 30, 2021
Total revenues:
United States	$	444,251	$	287,192
Foreign(1)		147,886		103,403
	$	592,137	$	390,595

(1) Net revenues to Canada represented 11% for the three months ended June 30, 2022. Net revenues to Germany represented 10% of total net revenues for the three months ended June 30, 2021.

For the six-month periods ended June 30, 2022 and 2021, total revenues by geographic area were as follows:

Geographic Data	June 30, 2022		June 30, 2021
Total revenues:
United States	$	842,289	$	534,706
Foreign(1)		260,434		282,373
	$	1,102,723	$	817,079

(1) Net revenues to any one foreign country did not exceed 10% for the six months ended June 30, 2022. Net revenues to India represented 15% of total net revenues for the six months ended June 30, 2021.

As of June 30, 2022 and December 31, 2021, accounts receivable by geographic area were as follows:

Geographic Data	June 30, 2022		December 31, 2021
Accounts receivable:
United States	$	282,860	$	134,695
Foreign		121,617		101,643
	$	404,477	$	236,338