Quarterly report pursuant to Section 13 or 15(d)

11. SEGMENT INFORMATION

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11. SEGMENT INFORMATION
6 Months Ended
Jun. 30, 2017
Segment Reporting [Abstract]  
SEGMENT INFORMATION

The Company operates in two distinct business segments: a consumer product segment in manufacturing, marketing and selling plant-based CBD products to a range of market sectors; and, a specialty pharmaceutical segment focused on developing and commercializing novel therapeutics utilizing synthetic 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 product 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 three and six months ended June 30, 2017:

 

    Consumer Products Segment     Specialty Pharmaceutical Segment     Consolidated Totals  
Three Months Ended                        
June 30, 2017:                        
Product sales, net   $ 4,081,832     $     $ 4,081,832  
Gross profit     2,844,458             2,844,458  
Gain on change in derivative liability     27,288             27,288  
Selling, general and administrative     (3,447,786 )     (77,987 )     (3,525,773 )
Research and development     (55,956 )     (149,691 )     (205,647 )
Operating loss   $ (631,996 )   $ (227,678 )   $ (859,674 )
                         
Three Months Ended                        
June 30, 2016:                        
Product sales, net   $ 2,487,756     $     $ 2,487,756  
Gross profit     1,664,327             1,664,327  
Selling, general and administrative     (3,262,917 )     (122,809 )     (3,385,726 )
Research and development     (224,266 )     (117,281 )     (341,547 )
Operating loss   $ (1,822,856 )   $ (240,090 )   $ (2,062,946 )
                         
Six Months Ended                        
June 30, 2017:                        
Product sales, net   $ 7,846,023     $     $ 7,846,023  
Gross profit     5,277,462             5,277,462  
Gain on change in derivative liability     237,888             237,888  
Royalty buy-out           (2,432,000 )     (2,432,000 )
Selling, general and administrative     (7,052,962 )     (149,520 )     (7,202,482 )
Research and development     (104,989 )     (289,374 )     (394,363 )
Operating loss   $ (1,642,601 )   $ (2,870,894 )   $ (4,513,495 )
                         
Six Months Ended                        
June 30, 2016:                        
Product sales, net   $ 4,910,434     $     $ 4,910,434  
Gross profit     3,289,962             3,289,962  
Selling, general and administrative     (5,952,161 )     (122,809 )     (6,074,970 )
Research and development     (366,079 )     (117,281 )     (483,360 )
Operating loss   $ (3,028,278 )   $ (240,090 )   $ (3,268,368 )