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OPERATING SEGMENTS
 3 Months Ended
Mar. 31, 2025
Segment Reporting [Abstract]  
OPERATING SEGMENTS

NOTE 17. OPERATING SEGMENTS

 

The Company adopted ASU 2023-07 in 2024 and applied the amendment retrospectively to all periods presented in the Company’s condensed consolidated financial statements. Segment financial information is prepared in accordance with GAAP and our significant accounting policies described in Note 1. Resources are allocated and performance is assessed using segment operating income by our Chief Executive Officer, whom we have determined to be our Chief Operating Decision Maker (“CODM”). Our CODM utilizes segment operating income when making decisions about allocating capital and personnel to the segments, predominantly in the annual budget and quarterly forecasting processes. In addition, our CODM uses operating income, including comparison of actual results to budget and forecast, in assessing the performance of each segment and in evaluating product pricing, distribution strategies and marketing investments. Our CODM reviews balance sheet information at a consolidated level. We compute segment operating income based on net sales revenue, less cost of goods sold, SG&A, asset impairment charges and restructuring charges. The SG&A used to compute each segment’s operating income is directly associated with the segment. We do not allocate non-operating income and expense, including interest or income taxes, to operating segments.

 

We operate in three strategic business segments. The Video Solutions Segment encompasses our law, commercial, and shield divisions. This segment includes both service and product revenues through our subscription models offering cloud and warranty solutions, and hardware sales for video and health safety solutions. The Revenue Cycle Management Segment provides working capital and back-office services to a variety of healthcare organizations throughout the country, as a monthly service fee. The Entertainment Segment acts as an intermediary between ticket buyers and sellers within our secondary ticketing platform, ticketsmarter.com, and we also acquire tickets from primary sellers to then sell through various platforms.

 

The Company’s corporate administration activities are reported in the corporate line item. These activities primarily include expense related to certain corporate officers and support staff, certain accounting staff, expense related to the Company’s Board of Directors, stock option expense for options granted to corporate administration employees, certain consulting expenses, investor relations activities, and a portion of the Company’s legal, auditing and professional fee expenses. Corporate identifiable assets primarily consist of cash, invested cash (if any), refundable income taxes (if any), and deferred income taxes.

 

 

Summarized financial information for the Company’s reportable business segments is provided for the three months ended March 31, 2025, and 2024:

 

SCHEDULE OF SEGMENT REPORTING

                     
Three months ended March 31, 2025
                 
   Video Solutions   Entertainment  

Revenue

cycle Management

   Corporate and other   Total 
Net revenues:                         
Product  $54,231   $667,119   $—   $—   $721,350 
Service   868,050    1,535,313    1,350,551    —    3,753,914 
Total segment net revenues  $922,281   $2,202,432   $1,350,551   $—   $4,475,264 
Less significant segment
expenses:		                         
Cost of Revenue - Product  $64,552   $611,087   $—   $—   $675,639 
Cost of Revenue – Service and
other		   301,968    1,013,270    882,888    —    2,198,126 
Research and development expense   84,417    —    —    —    84,417 
Selling, advertising and
promotional expense		   20,517    75,864    11,660    —    108,041 
General and administrative
expense		   283,547    806,789    448,633    844,752    2,383,721 
                          
Total segment operating income (loss)  $167,280   $(304,578)  $7,370   $(844,752)  $(974,680)
                          
Non-operating (expenses) income:                         
Interest expense                       (792,273)
Change in fair value of derivative liabilities                       2,515,891 
Gain on the extinguishment of liabilities                       2,220,097 
Gain on extinguishment of debt – related party                       1,249,372 
Other non-operating income (loss)                       48,675 
Total non-operating income (loss)                       5,241,762 
                          
Income before income tax benefit (provision)                      $4,267,082 
                          
Depreciation and amortization expense  $53,669   $340,597   $23,604   $—   $417,870 
                          
Total identifiable assets, net of
eliminations		  $12,786,363   $4,898,381   $4,863,764   $7,707,828   $30,256,336 

 

                     
Three months ended March 31, 2024
                 
   Video Solutions   Entertainment  

Revenue

cycle Management

   Corporate and other   Total 
Net revenues:                         
Product  $721,188   $844,658   $—   $—   $1,565,846 
Service   997,105    1,531,801    1,434,598    —    3,963,505 
Total segment net revenues  $1,718,293   $2,376,460   $1,434,598   $—   $5,529,351 
Less significant segment
expenses:		                         
Cost of Revenue - Product  $797,494   $769,899   $—   $—   $1,567,393 
Cost of Revenue – Service and
other		   355,105    1,112,287    970,867    —    2,438,259 
Research and development
expense		   487,466    —    —    —    487,466 
Selling, advertising and
promotional expense		   423,894    330,519    6,705    —    761,118 
General and administrative
expense		   1,101,217    805,974    481,057    1,525,901    3,914,149 
                          
Total segment operating
income (loss)		  $(1,446,883)  $(642,219)  $(24,031)  $(1,525,901)  $(3,639,034)
                          
Non-operating (expenses) income:                         
Interest expense                       (648,567)
Change in fair value of derivative liabilities                       (348,891)
Gain on the extinguishment of liabilities                       682,345 
Other non-operating income (loss), net                       10,879 
Total non-operating income (loss)                       (304,234)
                          
Loss before income tax benefit (provision)                      $(3,943,268)
                          
Depreciation and amortization
expense		  $198,028   $326,248   $26,715   $—   $550,991 
                          
Total identifiable assets, net of
eliminations		  $24,172,478   $6,482,510   $1,989,068   $12,520,139   $45,164,195 

 

 

The segment net revenues reported above represent sales to external customers. Segment gross profit represents net revenues less cost of revenues. Segment operating income, which is used in management’s evaluation of segment performance, represents net revenues, less cost of revenues, less all operating expenses. Identifiable assets are those assets used by each segment in its operations. Corporate assets primarily consist of cash, property, plant and equipment, accounts receivable, inventories, and other assets.