v3.25.1
BUSINESS SEGMENTS
 3 Months Ended
Mar. 31, 2025
Segment Reporting [Abstract]  
BUSINESS SEGMENTS

8. BUSINESS SEGMENTS

 

We currently have two business segments: (i) the sale of physical products, including portable hand-held breathalyzers and related accessories, supplies, education, training (“Product Sales”), and royalties from development contracts with OEM manufacturers (“Royalties” and, together with Product Sales, the "Products" segment), and (ii) rental of a portion of our building (the “Rentals” segment).  The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 2. 

 

Operating profits for these segments exclude unallocated corporate items.  Administrative and staff costs were commonly used by all business segments and were indistinguishable.

 

The following sets forth information about the operations of the business segments for the three months ended March 31, 2025 and 2024. There were no intersegment revenues.

        
Revenues:  2025   2024 
  Product sales  $2,263,047   $2,134,434 
  Royalties   5,671    10,936 
  Products subtotal   2,268,718    2,145,370 
  Rentals   8,316    8,073 
  Total   2,277,034    2,153,443 
           
Gross profit:          
  Product sales   899,242    819,355 
  Royalties   5,671    10,936 
  Products subtotal   904,913    830,291 
  Rentals   3,653    5,016 
  Total   908,566    835,307 
           
Interest expense:          
  Product sales   23,454    8,895 
  Royalties   —      —   
  Products subtotal   23,454    8,895 
  Rentals   1,041    1,255 
  Total   24,495    10,150 
           
Net income (loss) before taxes:          
  Product sales   (300,969)   (387,402)
  Royalties   5,671    10,936 
  Products subtotal   (295,298)   (376,466)
  Rentals   2,612    3,761 
  Total  $(292,686)  $(372,705)

 

 

Significant segment expenses are as follows. We have excluded our rentals segment and allocated all expenses to the products segment in the table below as the rentals segment is immaterial. Similarly, royalties are excluded as none of the expenses are attributable to royalties.  

        
   Three Months Ended March 31, 
   2025   2024 
Product sales  $2,263,047   $2,134,434 
Cost of sales   (1,363,805)   (1,312,212)
Gross profit   899,242    822,222 
Less: research, development and sustaining engineering   (469,680)   (555,599)
Sales and marketing   (334,556)   (345,009)
General and administrative   (384,878)   (314,925)
Interest income   12,357    17,672 
Interest expense   (24,495)   (10,150)
Operating loss before royalties and building rentals   (302,010)   (385,789)
Royalties   5,671    10,936 
Building rentals operating income   3,653    2,148 
Operating (loss) before taxes  $(292,686)  $(372,705)

 

The following sets forth domestic and international product sales for the three months ended March 31, 2025 and 2024.

         
    Three Months Ended March 31, 
    2025   2024 
 Domestic   $1,599,796   $1,629,080 
 International    663,251    505,354 
 Total   $2,263,047   $2,134,434 

 

Our purchases of assets for the above products segment for the three months ended March 31, 2025 and March 31, 2024 were as follows.

        
   2025   2024 
Property, plant and equipment  $—   $16,572 
Research and development equipment, software and space modifications purchased or placed in service   17,348    41,858 
Research and development equipment, software and space modifications placed in service   1,200    — 
Patent filing cost   —    21,708 
Total  $18,548   $80,138 

No assets were purchased for the rentals segment.

At March 31, 2025, $104,697 of our assets were used in the Rentals segment, with the remainder, $9,114,251, used in the Products and unallocated segments. Minimum base rent for the lease in place at March 31, 2025 is scheduled to be $8,316 in the second quarter of 2025. At December 31, 2024, $104,697 of our assets were used in the Rentals segment, with the remainder, $8,620,072 used in the Products and unallocated segments.

 

The following is the disaggregation of revenue into broad categories, which we have defined as shown below for the three months ended March 31, 2025 and March 31, 2024.

        
Product sales:  2025   2024 
Product sales and supplies  $2,111,570   $1,911,824 
Training, certification and data recording   128,558    204,059 
Service plans and equipment rental   22,919    18,551 
Product sales subtotal   2,263,047    2,134,434 
Royalties   5,671    10,936 
Rental income   8,316    8,073 
Total revenues  $2,277,034   $2,153,443