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SEGMENT DATA
 9 Months Ended 12 Months Ended
Sep. 30, 2024
Dec. 31, 2023
Segment Reporting [Abstract]    
SEGMENT DATA

NOTE 14. SEGMENT DATA

 

The accounting guidance on Segment Reporting establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information of those segments to be presented in financial statements. Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker (the Company’s Chief Executive Officer or “CODM”) in making decisions on how to allocate resources and assess performance. The Company’s three operating segments are Video Solutions, Revenue Cycle Management, and Entertainment, each of which has specific personnel responsible for that business and reports to the CODM. Corporate expenses capture the Company’s corporate administrative activities, is also to be reported in the segment information. The Company’s captive insurance subsidiary provides services to the Company’s other business segments and not to outside customers. Therefore, its operations are eliminated in consolidation and is not considered a separate business segment for financial reporting purposes.

 

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 indicated periods and as of September 30, 2024, and 2023:

 

   2024   2023   2024   2023 
   For the three months ended September 30,   For the nine months ended September 30, 
   2024   2023   2024   2023 
Net Revenues:                    
Video Solutions  $1,196,362   $1,797,348   $4,500,325   $5,596,300 
Revenue Cycle Management   1,601,792    1,636,543    4,600,745    5,142,904 
Entertainment   1,253,557    2,903,808    6,096,227    11,575,315 
Total Net Revenues  $4,051,711   $6,337,699   $15,197,297   $22,314,519 
                     
Gross Profit:                    
Video Solutions  $769,063   $426,795   $1,622,558   $1,740,397 
Revenue Cycle Management   666,723    625,114    1,731,860    2,203,220 
Entertainment   304,188    174,240    149,386    1,564,361 
Total Gross Profit  $1,739,974   $1,226,149   $3,503,804   $5,507,978 
                     
Operating Income (loss):                    
Video Solutions  $(89,055)  $(1,311,143)  $(1,909,246)  $(4,639,316)
Revenue Cycle Management   (4,085,224)   43,202    (3,955,761)   299,010 
Entertainment   (1,516,934)   (1,256,681)   (3,987,415)   (2,818,617)
Corporate   (1,691,086)   (2,623,421)   (5,083,070)   (9,102,631)
Total Operating Income (Loss)  $(7,382,299)  $(5,148,043)  $(14,935,492)  $(16,261,554)
                     
Depreciation and Amortization:                    
Video Solutions  $133,246   $219,955   $520,970   $629,677 
Revenue Cycle Management   26,735    26,328    80,164    69,066 
Entertainment   339,265    319,302    977,112    957,884 
Total Depreciation and Amortization  $499,246   $565,585   $1,578,246   $1,656,627 

 

 

  

September 30, 2024

  

December 31, 2023

 
Assets (net of eliminations):          
Video Solutions  $16,876,673   $26,396,559 
Revenue Cycle Management   1,969,225    2,260,376 
Entertainment   6,037,666    6,324,211 
Corporate   7,379,605    12,047,663 
Total Identifiable Assets  $32,263,169   $47,028,809 

 

The segments recorded noncash items effecting the gross profit and operating income (loss) through the established inventory reserves based on estimates of excess and/or obsolete current and non-current inventory. The Company recorded a reserve for excess and obsolete inventory in the video solutions segment of $4,144,749 and a reserve for the entertainment segment of $78,241 as of September 30, 2024.

 

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.

 

NOTE 23. SEGMENT DATA

 

The accounting guidance on Segment Reporting establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information of those segments to be presented in financial statements. Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision maker (the Company’s Chief Executive Officer or “CODM”) in making decisions on how to allocate resources and assess performance. The Company’s three operating segments are Video Solutions, Revenue Cycle Management, and Entertainment, each of which has specific personnel responsible for that business and reports to the CODM. Corporate expenses capture the Company’s corporate administrative activities, is also to be reported in the segment information. The Company’s captive insurance subsidiary provides services to the Company’s other business segments and not to outside customers. Therefore, its operations are eliminated in consolidation and is not considered a separate business segment for financial reporting purposes.

 

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 years ended December 31, 2023, and 2022:

 

   2023   2022 
   Years Ended December 31, 
   2023   2022 
Net Revenues:          
Video Solutions  $7,471,285   $8,252,288 
Revenue Cycle Management   6,713,678    7,886,107 
Entertainment   14,063,381    20,871,500 
Total Net Revenues  $28,248,344   $37,009,895 
           
Gross Profit (loss):          
Video Solutions  $1,290,509   $(1,250,277)
Revenue Cycle Management   2,772,271    3,303,477 
Entertainment   1,699,704    268,741 
Total Gross Profit  $5,762,484   $2,321,941 
           
Operating Income (loss):          
Video Solutions  $(7,135,584)  $(9,278,721)
Revenue Cycle Management   292,543    357,705 
Entertainment   (3,646,770)   (7,369,241)
Corporate   (11,750,742)   (13,443,001)
Total Operating Income (Loss)  $(22,240,553)  $(29,733,258)
           
Depreciation and Amortization:          
Video Solutions  $836,699   $769,228 
Revenue Cycle Management   104,352    128,082 
Entertainment   1,277,186    1,279,369 
Total Depreciation and Amortization  $2,218,237   $2,176,679 
           
Assets (net of eliminations):          
Video Solutions  $26,396,559   $28,509,706 
Revenue Cycle Management   2,260,376    2,201,570 
Entertainment   6,324,211    11,190,491 
Corporate   12,047,663    14,766,295 
Total Identifiable Assets  $47,028,809   $56,668,062 

 

The segments recorded noncash items affecting the gross profit and operating income (loss) through the established inventory reserves based on estimates of excess and/or obsolete current and non-current inventory. The Company recorded a reserve for excess and obsolete inventory in the video solutions segment of $4,355,666 and $5,230,261 and a reserve for the entertainment segment of $186,795 and $259,280 as of December 31, 2023 and 2022.

 

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.