Note 12 - Segment Reporting

Prior to the acquisition of Oblong Industries on October 1, 2019, the Company operated in one segment. Following October 1, 2019, the former businesses of Glowpoint and Oblong Industries were managed separately and involve different products and services. Accordingly, the Company currently operates in two segments: (1) the Glowpoint (now named Oblong) business which mainly consists of managed services for video collaboration and network applications; and (2) the Oblong Industries business which consists of products and services for visual collaboration technologies.

Because the closing of the acquisition of Oblong Industries occurred on October 1, 2019, the Company’s condensed consolidated financial statements as of and for the three months ended March 31, 2020 and 2019 included in this Report only reflect Oblong Industries’ financial results for the first quarter of 2020. Certain information concerning the Company’s segments for the three months ended March 31, 2020 is presented in the following tables (in thousands):



	Three Months ended March 31, 2020
	Glowpoint			Oblong Industries			Total
Revenue	$	2,045		$	3,283		$	5,328
Cost of revenues	1,156			1,218			2,374
Gross profit	$	889		$	2,065		$	2,954
Gross profit %	43		%	63		%	55		%

Allocated operating expenses	$	1,290		$	2,073		$	3,363
Unallocated operating expenses	—			—			2,568
Total operating expenses	$	1,290		$	2,073		$	5,931

Loss from operations	$	(401	)	$	(8	)	$	(2,977	)
Interest and other expense, net	—			—			(152		)
Net loss	$	(401	)	$	(8	)	$	(3,129	)

	As of March 31, 2020
Total assets	$	3,743		$	28,210		$	31,953

Unallocated operating expenses include costs for the three months ended March 31, 2020 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 expense, net, is also not allocated to the operating segments.

For the three months ended March 31, 2020 and 2019, there was no material revenue attributable to any individual foreign country. Approximately 1% of foreign revenue is billed in foreign currency and foreign currency gains and losses are not material. Revenue by geographic area is allocated as follows (in thousands):



	Three Months ended March 31,
	2020		2019
Domestic	$	3,602	$	1,796
Foreign	1,726		798
	$	5,328	$	2,594

Disaggregated information for the Company’s revenue has been recognized in the accompanying condensed consolidated statements of operations and is presented below according to contract type (in thousands):



	Three Months ended March 31,
	2020		% of Revenue		2019		% of Revenue
Revenue: Glowpoint
Video collaboration services	$	1,046	20	%	$	1,566	60	%
Network services	925		17	%	965		37	%
Professional and other services	74		1	%	63		2	%
Total Glowpoint revenue	$	2,045	38	%	$	2,594	100	%

Revenue: Oblong Industries
Visual collaboration product offerings	$	2,322	44	%	$	—	—	%
Professional services	669		13	%	—		—	%
Licensing	292		5	%	—		—	%
Total Oblong Industries revenue	$	3,283	62	%	$	—	—	%
Total revenue	$	5,328	100	%	$	2,594	100	%

Glowpoint’s fixed assets were 100% located in domestic markets during as of March 31, 2020 and December 31, 2019. Oblong Industries’ long-lived assets were located 81% in domestic and 19% in foreign markets as of March 31, 2020.

The Company considers a significant customer to be one that comprises more than 10% of the Company’s consolidated revenues or accounts receivable. The loss of or a reduction in sales or anticipated sales to our most significant or several of our smaller customers could have a material adverse effect on our business, financial condition and results of operations.

Concentration of revenues was as follows:



		Three Months ended March 31,
		2020		2019
	Segment	% of Revenue		% of Revenue
Customer A	Glowpoint	11	%	21	%
Customer B	Glowpoint	*		28	%
Customer C	Glowpoint	*		10	%
Customer D	Oblong Industries	22	%	—	%

* The amount did not exceed 10% of the Company’s consolidated total revenues.

Concentration of accounts receivable was as follows:



		Three Months ended March 31,
		2020		2019
	Segment	% of Accounts Receivable		% of Accounts Receivable
Customer A	Glowpoint	*		11	%
Customer B	Glowpoint	*		48	%
Customer C	Glowpoint	*		*
Customer D	Glowpoint	*		15	%
Customer E	Oblong Industries	42	%	—	%
Customer F	Oblong Industries	11	%	—	%

* The amount did not exceed 10% of the Company’s consolidated total accounts receivable.