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OPERATING SEGMENTS
 6 Months Ended
Jun. 30, 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 June 30, 2025, and 2024:

 

                     
Three months ended June 30, 2025
                 
   Video Solutions   Entertainment  

Revenue

cycle Management

   Corporate and other   Total 
Net revenues:                         
Product  $438,132   $1,740,828   $—   $—   $2,178,960 
Service   902,540    1,118,245    1,432,294    —    3,453,079 
Total segment net revenues  $1,340,672   $2,859,073   $1,432,294   $—   $5,632,039 
Less significant segment
expenses:		                         
Cost of Revenue - Product  $584,457   $3,317,407   $—   $—   $3,901,864 
Cost of Revenue – Service and
other		   385,438    1,094,131    883,231    —    2,362,800 
Research and development expense   183,811    —    —    —    183,811 
Selling, advertising and
promotional expense		   183,694    95,629    3,814    —    283,137 
General and administrative
expense		   175,918    919,792    430,968    1,468,822    2,995,500 
                          
Total segment operating income (loss)  $(172,646)  $(2,567,886)  $114,281   $(1,468,822)  $(4,095,073)
                          
Non-operating (expenses) income:                         
Interest expense                       (77,280)
Change in fair value of derivative liabilities                       857,189 
Gain on the extinguishment of liabilities                       10,619 
Gain on extinguishment of debt – related party                       622,622 
Other non-operating income (loss)                       64,713 
Total non-operating income (loss)                       1,477,863 
                          
Income before income tax benefit (provision)                      $(2,617,210)
                          
Depreciation and amortization expense  $44,616   $387,579   $26,756   $—   $458,951 
                          
Total identifiable assets, net of
eliminations		  $11,754,431   $4,952,085   $4,702,656   $4,554,491   $25,963,663 

 

 

                     
Three months ended June 30, 2024
                 
   Video Solutions   Entertainment  

Revenue

cycle Management

   Corporate and other   Total 
Net revenues:                         
Product  $620,939   $1,586,662   $—   $—   $2,207,601 
Service   964,731    879,549    1,564,354    —    3,408,634 
Total segment net revenues  $1,585,670   $2,466,211   $1,564,354   $—   $5,616,235 
Less significant segment
expenses:		                         
Cost of Revenue - Product  $958,462   $2,460,792   $—   $—   $3,419,254 
Cost of Revenue – Service and
other		   339,368    652,273    962,948    —    1,954,589 
Research and development
expense		   545,776    —    —    —    545,776 
Selling, advertising and
promotional expense		   364,417    360,573    3,916    —    728,906 
General and administrative
expense		   777,686    821,087    447,166    835,992    2,881,931 
                          
Total segment operating
income (loss)		  $(1,400,039)  $(1,828,514)  $150,324   $(835,992)  $(3,914,221)
                          
Non-operating (expenses) income:                         
Interest expense                       (1,085,063)
Change in fair value of derivative liabilities                       (2,818)
Gain on the extinguishment of debt                       (68,827)
Other non-operating income (loss), net                       60,378 
Total non-operating income (loss)                       (1,096,330)
                          
Loss before income tax benefit (provision)                      $(5,010,551)
                          
Depreciation and amortization
expense		  $178,555   $317,180   $26,715   $—   $522,450 
                          
Total identifiable assets, net of
eliminations		  $22,998,670   $6,315,677   $1,904,280   $12,108,588   $43,327,215 

  

Summarized financial information for the Company’s reportable business segments is provided for the six months ended June 30, 2025, and 2024:

 

                     
Six months ended June 30, 2025
                 
   Video Solutions   Entertainment  

Revenue

cycle Management

   Corporate and other   Total 
Net revenues:                         
Product  $492,364   $2,445,416   $—   $—   $2,937,780 
Service   1,770,590    2,616,088    2,782,845    —    7,169,523 
Total segment net revenues  $2,262,954   $5,061,504   $2,782,845   $—   $10,107,303 
Less significant segment
expenses:		                         
Cost of Revenue - Product  $649,009   $3,928,494   $—   $—   $4,577,503 
Cost of Revenue – Service and
other		   687,406    2,107,401    1,766,119    —    4,560,926 
Research and development expense   268,228    —    —    —    268,228 
Selling, advertising and
promotional expense		   204,211    171,492    15,475    —    391,178 
General and administrative
expense		   459,465    1,726,582    879,600    2,313,574    5,379,221 
                          
Total segment operating income (loss)  $(5,365)  $(2,872,465)  $121,651   $(2,313,574)  $(5,069,753)
                          
Non-operating (expenses) income:                         
Interest expense                       (869,553)
Change in fair value of derivative liabilities                       3,373,080 
Gain on the extinguishment of liabilities                       2,230,716 
Gain on extinguishment of debt – related party                       1,871,994 
Other non-operating income (loss)                       113,388 
Total non-operating income (loss)                       6,719,625 
                          
Income before income tax benefit (provision)                      $1,649,872 
                          
Depreciation and amortization expense  $98,285   $728,176   $50,360   $—   $876,821 
                          
Total identifiable assets, net of
eliminations		  $11,754,431   $4,952,085   $4,702,656   $4,554,491   $25,963,663 

 

 

                               
Six months ended June 30, 2024
                         
    Video Solutions     Entertainment    

Revenue

cycle Management

     Corporate and other     Total  
Net revenues:                                        
Product   $ 1,342,127     $ 2,431,320     $ —     $ —     $ 3,773,447  
Service     1,961,836       2,411,351       2,998,952       —       7,372,139  
Total segment net revenues   $ 3,303,963     $ 4,842,671     $ 2,998,952     $ —     $ 11,145,586  
Less significant segment
expenses:		                                        
Cost of Revenue - Product   $ 1,755,956     $ 3,230,691     $ —     $ —     $ 4,986,647  
Cost of Revenue – Service and
other		     694,473       1,766,821       1,933,815       —       4,395,109  
Research and development
expense		     1,033,242       —       —       —       1,033,242  
Selling, advertising and
promotional expense		     788,311       688,830       10,621       —       1,487,762  
General and administrative
expense		     1,565,223       1,627,061       928,164       2,675,571       6,796,019  
                                         
Total segment operating
income (loss)		   $ (2,533,242 )   $ (2,470,732 )   $ 126,352     $ (2,675,571 )   $ (7,553,193 )
                                         
Non-operating (expenses) income:                                        
Interest expense                                     (1,733,690 )
Change in fair value of derivative liabilities                                     (351,710 )
Gain on the extinguishment of liabilities                                     682,345  
Other non-operating income (loss), net                                     2,429  
Total non-operating income (loss)                                     (1,400,626 )
                                         
Loss before income tax benefit (provision)                                   $ (8,953,819 )
                                         
Depreciation and amortization
expense		   $ 387,724     $ 637,847     $ 53,429     $ —     $ 1,079,000  
                                         
Total identifiable assets, net of
eliminations		   $ 22,998,670     $ 6,315,677     $ 1,904,280     $ 12,108,588     $ 43,327,215  

 

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.