Annual report pursuant to Section 13 and 15(d)

Segment Reporting

Segment Reporting
12 Months Ended
Dec. 31, 2018
Segment Reporting [Abstract]  
Segment Reporting

16. Segment Reporting


As a result of the Company beginning revenue generating activities in the U.S. in the second quarter of 2017, we began reporting the results of each of our two reportable segments beginning with the second quarter of 2017 in accordance with ASC 280, Segment Reporting. Our Chief Executive Officer evaluates the results of operations on a consolidated as well as a segment level and is the person responsible for the final assessment of performance and making key operating decisions. Discrete financial information is available for each of the segments, and the operating results of each of the operating segments are used for performance evaluation and resource allocations.


Our two operating segments are managed through operating segments that are aligned with our geographic operating locations of Argentina and the U.S. We also report certain corporate and other non-operating activities under the heading “Corporate and Other”, which primarily reflects corporate personnel and activities, research and development activities, incentive compensation programs and other costs. The Argentina segment, which is reported as discontinued operations, has been included in the segment information below.


We account for intersegment sales at prices that we generally establish by reference to similar transactions with unaffiliated customers. Reporting segments are measured based on gross margin, which is defined as revenues reduced by total cost of services. Cost of services exclude research and development expenses and depreciation and amortization expense.


Summarized financial information is shown in the following tables:



Year Ended

December 31,

    2018     2017  
Argentina-discontinued operations   $ 11,396,142     $ 19,553,584  
United States     40,709,621       24,464,164  
Total revenues   $ 52,105,763     $ 44,017,748  
Cost of services(1,2,3):                
Argentina-discontinued operations   $ 13,932,740       24,934,757  
United States     51,578,914       28,067,742  
Total cost of services   $ 65,511,654     $ 53,002,499  
Gross margin(1,2):                
Argentina-discontinued operations   $ (2,536,598 )   $ (5,381,173 )
United States     (10,869,293 )     (3,603,578 )
Total gross margin   $ (13,405,891 )   $ (8,984,751 )
Capital expenditures:                
Argentina-discontinued operations   $ 2,846     $ 548,108  
United States     9,831,034       34,805,359  
Corporate and Other     1,040       25,974  
Total capital expenditures   $ 9,834,920     $ 35,379,441  
Depreciation and amortization:                
Argentina-discontinued operations   $ 4,909,382     $ 4,105,417  
United States     14,087,347       2,593,145  
Corporate and Other     1,275,564       1,330,685  
Total depreciation and amortization   $ 20,272,293     $ 8,029,247  
Asset Impairment:                
Argentina-discontinued operations   $ 4,427,564     $  
United States     28,803,756        
Total depreciation and amortization   $ 33,231,320     $  


(1) U.S. activity began in February 2017 with start-up expenses being incurred. The Company began recognizing U.S. revenue in late May 2017. Intersegment transactions included in revenues were not significant for any of the periods presented.
(2) Gross margin is defined as revenues less costs of services. Cost of services excludes selling, general and administrative expenses, research and development expenses and depreciation and amortization expense.
(3) The Argentina segment has been reclassified into discontinued operations.