Annual report pursuant to Section 13 and 15(d)

SEGMENT INFORMATION

v3.19.1
SEGMENT INFORMATION
 12 Months Ended
Dec. 31, 2018
Segment Reporting [Abstract]  
SEGMENT INFORMATION
SEGMENT INFORMATION
The Company operates in two distinct business segments: a consumer products segment in manufacturing, marketing and selling hemp-based CBD products to a range of market sectors; and a specialty pharmaceutical segment focused on developing and commercializing novel therapeutics utilizing CBD. The Company’s segments maintain separate financial information for which operating results are evaluated on a regular basis by the Company’s senior management in deciding how to allocate resources and in assessing performance. The Company evaluates its consumer products segment based on net product sales, gross profit and operating income or loss. The Company currently evaluates its specialty pharmaceutical segment based on the progress of its clinical development programs.
The following table presents information by reportable operating segment for the years ended December 31, 2018 and 2017:
 
Consumer Products
Segment
 
Specialty Pharmaceutical Segment
 
Consolidated Totals
Year ended December 31, 2018:
 

 
 

 
 

Product sales, net
$
48,244

 
$
—

 
$
48,244

 
 
 
 
 
 
Gross profit
$
33,878

 
$
—

 
$
33,878

Research and development
1,008

 
877

 
1,885

Selling, general and administrative
21,697

 
49

 
21,746

Operating income (loss)
$
11,173

 
$
(926
)
 
$
10,247

 
 
 
 
 
 
Year ended December 31, 2017:
 
 
 
 
 
Product sales, net
$
20,679

 
$
—

 
$
20,679

 
 
 
 
 
 
Gross profit
$
14,489

 
$
—

 
$
14,489

Research and development
251

 
473

 
724

Selling, general and administrative
15,957

 
236

 
16,193

Royalty buy-out
2,432

 
—

 
2,432

Operating loss
$
(4,151
)
 
$
(709
)
 
$
(4,860
)

The Company's specialty and pharmaceutical segment includes goodwill of $2,788 as of December 31, 2018 and 2017. In addition, the Company's intangible assets of $3,801 and $3,836 as of December 31, 2018 and 2017, respectively, are included in the specialty pharmaceutical segment. All other assets are included in the consumer products segment as of December 31, 2018 and 2017.