NOTE C – SEGMENT REPORTING

The Company views its business in three segments – the IT segment, the professional sales service segment, and the equipment segment. The IT segment includes the operations of NetWolves and VasoHealthcare IT Corp. The professional sales service segment operates through the Vaso Diagnostics subsidiary and is currently engaged solely in the fulfillment of the Company’s responsibilities under our agreement with GEHC. The equipment segment is engaged in designing, manufacturing, marketing and supporting EECP^® enhanced external counterpulsation systems both domestically and internationally, as well as the development, production, marketing and supporting of other medical devices.

The chief operating decision maker is the Company’s Chief Executive Officer, who, in conjunction with upper management, evaluates segment performance based on operating income and Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization – defined as net (loss) income, plus net interest expense (income), tax expense, depreciation and amortization, and non-cash expenses for share-based compensation). Administrative functions such as finance and human resources are centralized and related expenses allocated to each segment. Other costs not directly attributable to operating segments, such as audit, legal, director fees, investor relations, and others, as well as certain assets – primarily cash balances – are reported in the Corporate entity below. There are no intersegment revenues. Summary financial information for the segments is set forth below:

	(in thousands)
	Year ended December 31,
	2017			2016

Revenues from external customers
IT	$	42,581		$	39,448
Professional sales service		26,443			28,524
Equipment		3,764			4,617
Total revenues	$	72,788		$	72,589

Gross Profit
IT	$	17,623		$	16,303
Professional sales service		20,630			22,351
Equipment		2,478			2,848
Total gross profit	$	40,731		$	41,502

Operating (loss) income
IT	$	(3,375	)	$	(3,227	)
Professional sales service		1,954			7,217
Equipment		(1,066	)		(1,064	)
Corporate		(1,345	)		(1,362	)
Total operating (loss) income	$	(3,832	)	$	1,564

Capital expenditures
IT	$	2,185		$	1,567
Professional sales service		127			238
Equipment		43			59
Corporate		19			2
Total cash capital expenditures	$	2,374		$	1,866

	December 31, 2017		December 31, 2016

Identifiable Assets
IT	$	28,320	$	27,724
Professional sales service		15,658		14,611
Equipment		7,830		7,446
Corporate		4,970		7,600
Total assets	$	56,778	$	57,381

For the years ended December 31, 2017 and 2016, GEHC accounted for 36% and 39% of revenue, respectively. Also, GEHC accounted for $8.9 million, or 67%, and $7.9 million, or 62%, of accounts and other receivables at December 31, 2017 and 2016, respectively.

Our revenues were derived from the following geographic areas:

	(in thousands)
	For the year ended
	December 31, 2017		December 31, 2016
Domestic (United States)	$	70,719	$	70,075
Non-domestic (foreign)		2,069		2,514
	$	72,788	$	72,589