Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 15, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2022 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2022 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-33899 | |
Entity Registrant Name | Digital Ally, Inc. | |
Entity Central Index Key | 0001342958 | |
Entity Tax Identification Number | 20-0064269 | |
Entity Incorporation, State or Country Code | NV | |
Entity Address, Address Line One | 14001 Marshall Drive | |
Entity Address, City or Town | Lenexa | |
Entity Address, State or Province | KS | |
Entity Address, Postal Zip Code | 66215 | |
City Area Code | (913) | |
Local Phone Number | 814-7774 | |
Title of 12(b) Security | Common stock, $0.001 par value per share | |
Trading Symbol | DGLY | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 47,828,405 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 13,454,246 | $ 32,007,792 |
Accounts receivable – trade, net | 2,167,280 | 2,727,052 |
Other receivables (including $138,384 due from related parties – June 30, 2022 and $158,384 – December 31, 2021, refer to Note 20) | 2,798,029 | 2,021,813 |
Inventories, net | 9,405,954 | 9,659,536 |
Prepaid expenses | 7,911,435 | 9,728,782 |
Total current assets | 35,736,944 | 56,144,975 |
Property, plant, and equipment, net | 8,457,199 | 6,841,026 |
Goodwill and other intangible assets, net | 18,675,469 | 16,902,513 |
Operating lease right of use assets, net | 951,928 | 993,384 |
Other assets | 6,907,281 | 2,107,299 |
Total assets | 70,728,821 | 82,989,197 |
Current liabilities: | ||
Accounts payable | 6,762,924 | 4,569,106 |
Accrued expenses | 1,130,737 | 1,175,998 |
Current portion of operating lease obligations | 353,646 | 373,371 |
Contract liabilities – current portion | 1,944,382 | 1,665,519 |
Debt obligations – current portion | 514,664 | 389,934 |
Warrant derivative liabilities | 9,285,143 | 14,846,932 |
Income taxes payable | 11,796 | 1,827 |
Total current liabilities | 20,003,292 | 23,022,687 |
Long-term liabilities: | ||
Debt obligations – long term | 754,680 | 727,278 |
Operating lease obligation – long term | 666,477 | 688,207 |
Contract liabilities – long term | 4,087,426 | 2,687,786 |
Total liabilities | 25,511,875 | 27,125,958 |
Commitments and contingencies | ||
Stockholders’ Equity: | ||
Common stock, $0.001 par value per share; 100,000,000 shares authorized; shares issued: 47,828,405 shares issued – June 30, 2022 and 50,904,391 shares issued – December 31, 2021 | 47,828 | 50,904 |
Additional paid in capital | 125,202,080 | 124,426,379 |
Noncontrolling interest in consolidated subsidiary | 325,993 | 56,453 |
Accumulated deficit | (80,358,955) | (68,670,497) |
Total stockholders’ equity | 45,216,946 | 55,863,239 |
Total liabilities and stockholders’ equity | $ 70,728,821 | $ 82,989,197 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Due from related parties | $ 138,384 | $ 158,384 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 47,828,405 | 50,904,391 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Revenue: | ||||
Total revenue | $ 9,351,457 | $ 2,493,671 | $ 19,646,238 | $ 5,029,501 |
Cost of revenue: | ||||
Total cost of revenue | 7,632,379 | 1,232,871 | 15,987,542 | 2,956,818 |
Gross profit | 1,719,078 | 1,260,800 | 3,658,696 | 2,072,683 |
Selling, general and administrative expenses: | ||||
Research and development expense | 540,222 | 460,999 | 1,038,222 | 909,964 |
Selling, advertising and promotional expense | 2,763,045 | 870,183 | 5,542,448 | 1,466,938 |
General and administrative expense | 5,077,063 | 2,546,502 | 10,542,616 | 5,178,359 |
Total selling, general and administrative expenses | 8,380,330 | 3,877,684 | 17,123,286 | 7,555,261 |
Operating loss | (6,661,252) | (2,616,884) | (13,464,590) | (5,482,578) |
Other income (expense): | ||||
Interest income | 32,233 | 90,774 | 103,595 | 132,461 |
Interest expense | (8,501) | (1,365) | (25,511) | (2,793) |
Other income (loss) | (381) | 43,059 | ||
Gain on extinguishment of debt | 10,000 | 10,000 | ||
Change in fair value of contingent consideration promissory notes | 542,096 | 486,046 | ||
Change in fair value of short-term investments | (1,590) | (84,818) | (6,554) | |
Change in fair value of warrant derivative liabilities | 5,413,618 | (2,863,422) | 5,561,789 | 21,688,835 |
Total other income (expense) | 5,979,065 | (2,765,603) | 6,084,160 | 21,821,949 |
Income (loss) before income tax benefit | (682,187) | (5,382,487) | (7,380,430) | 16,339,371 |
Income tax benefit | ||||
Net income (loss) | (682,187) | (5,382,487) | (7,380,430) | 16,339,371 |
Net income attributable to noncontrolling interests of consolidated subsidiary | (383,326) | 0 | (285,232) | 0 |
Net income (loss) attributable to common stockholders | $ (1,065,513) | $ (5,382,487) | $ (7,665,662) | $ 16,339,371 |
Net loss per share information: | ||||
Basic | $ (0.02) | $ (0.10) | $ (0.15) | $ 0.34 |
Diluted | $ (0.02) | $ (0.10) | $ (0.15) | $ 0.34 |
Weighted average shares outstanding: | ||||
Basic | 48,657,440 | 51,513,691 | 49,787,562 | 48,177,399 |
Diluted | 48,657,440 | 51,513,691 | 49,787,562 | 48,177,399 |
Product [Member] | ||||
Revenue: | ||||
Total revenue | $ 2,210,181 | $ 1,719,332 | $ 4,620,241 | $ 3,631,910 |
Cost of revenue: | ||||
Total cost of revenue | 2,070,476 | 1,017,659 | 4,892,527 | 2,578,969 |
Service, Other [Member] | ||||
Revenue: | ||||
Total revenue | 7,141,276 | 774,339 | 15,025,997 | 1,397,591 |
Cost of revenue: | ||||
Total cost of revenue | $ 5,561,903 | $ 215,212 | $ 11,095,015 | $ 377,849 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Noncontrolling Interest [Member] | Retained Earnings [Member] | Total |
Beginning balance, value at Dec. 31, 2020 | $ 26,835 | $ 106,501,396 | $ (2,157,226) | $ (90,014,500) | $ 14,356,505 | |
Beginning balance, shares at Dec. 31, 2020 | 26,834,709 | |||||
Stock-based compensation | 326,164 | 326,164 | ||||
Restricted common stock grant | $ 450 | (450) | ||||
Restricted common stock grant, shares | 450,000 | |||||
Restricted common stock forfeitures | $ (8) | 8 | ||||
Restricted common stock forfeitures, shares | (7,500) | |||||
Issuance of common stock through registered direct offering at $3.095 per share and accompanying warrants (net of offering expenses and placement agent discount) | $ 2,800 | 6,726,200 | 6,729,000 | |||
Issuance of common stock through registered direct offering at $3.095 per share and accompanying warrants (net of offering expenses and placement agent discount), shares | 2,800,000 | |||||
Issuance of common stock through registered direct offering at $2.80 per share and accompanying warrants (net of offering expenses and placement agent discount) | $ 3,250 | 6,614,350 | 6,617,600 | |||
Issuance of common stock through registered direct offering at $2.80 per share and accompanying warrants (net of offering expenses and placement agent discount), shares | 3,250,000 | |||||
Exercise of pre-funded common stock purchase warrants at $3.095 per share | $ 7,200 | 22,276,800 | 22,284,000 | |||
Exercise of pre-funded common stock purchase warrants at $3.095 per share, shares | 7,200,000 | |||||
Exercise of pre-funded common stock purchase warrants at $2.80 per share | $ 11,050 | 30,928,950 | 30,940,000 | |||
Exercise of pre-funded common stock purchase warrants at $2.80 per share, shares | 11,050,000 | |||||
Issuance of pre-funded common stock purchase warrants in connection with the registered direct offerings | (1,817,548) | (1,817,548) | ||||
Issuance of common stock purchase warrants at exercise price of $3.25 per share in connection with the registered direct offerings | (49,398,510) | (49,398,510) | ||||
Net income (loss) | 21,721,858 | 21,721,858 | ||||
Ending balance, value at Mar. 31, 2021 | $ 51,577 | 122,157,360 | (2,157,226) | (68,292,642) | 51,759,069 | |
Ending balance, shares at Mar. 31, 2021 | 51,577,209 | |||||
Beginning balance, value at Dec. 31, 2020 | $ 26,835 | 106,501,396 | (2,157,226) | (90,014,500) | 14,356,505 | |
Beginning balance, shares at Dec. 31, 2020 | 26,834,709 | |||||
Net income (loss) | 16,339,371 | |||||
Ending balance, value at Jun. 30, 2021 | $ 51,577 | 122,487,573 | (2,157,226) | (73,675,129) | 46,706,795 | |
Ending balance, shares at Jun. 30, 2021 | 51,577,209 | |||||
Beginning balance, value at Mar. 31, 2021 | $ 51,577 | 122,157,360 | (2,157,226) | (68,292,642) | 51,759,069 | |
Beginning balance, shares at Mar. 31, 2021 | 51,577,209 | |||||
Stock-based compensation | 330,213 | 330,213 | ||||
Net income (loss) | (5,382,487) | (5,382,487) | ||||
Ending balance, value at Jun. 30, 2021 | $ 51,577 | 122,487,573 | (2,157,226) | (73,675,129) | 46,706,795 | |
Ending balance, shares at Jun. 30, 2021 | 51,577,209 | |||||
Beginning balance, value at Dec. 31, 2021 | $ 50,904 | 124,426,379 | 56,453 | (68,670,497) | 55,863,239 | |
Beginning balance, shares at Dec. 31, 2021 | 50,904,391 | |||||
Stock-based compensation | 394,749 | 394,749 | ||||
Restricted common stock grant | $ 715 | (715) | ||||
Restricted common stock grant, shares | 715,000 | |||||
Restricted common stock forfeitures | $ (15) | 15 | ||||
Restricted common stock forfeitures, shares | (15,000) | |||||
Net income (loss) | (98,094) | (6,600,148) | (6,698,242) | |||
Repurchase and cancellation of common stock | $ (1,876) | (2,061,892) | (2,063,768) | |||
Repurchase and cancellation of common stock, shares | (1,876,034) | |||||
Distribution to noncontrolling interest in consolidated subsidiary | (15,692) | (15,692) | ||||
Ending balance, value at Mar. 31, 2022 | $ 49,728 | 124,820,428 | (57,333) | (77,332,537) | 47,480,286 | |
Ending balance, shares at Mar. 31, 2022 | 49,728,357 | |||||
Beginning balance, value at Dec. 31, 2021 | $ 50,904 | 124,426,379 | 56,453 | (68,670,497) | 55,863,239 | |
Beginning balance, shares at Dec. 31, 2021 | 50,904,391 | |||||
Restricted common stock forfeitures, shares | (50,000) | |||||
Net income (loss) | (7,380,430) | |||||
Repurchase and cancellation of common stock, shares | (1,849,952) | |||||
Ending balance, value at Jun. 30, 2022 | $ 47,828 | 125,202,080 | 325,993 | (80,358,955) | 45,216,946 | |
Ending balance, shares at Jun. 30, 2022 | 47,828,405 | |||||
Beginning balance, value at Mar. 31, 2022 | $ 49,728 | 124,820,428 | (57,333) | (77,332,537) | 47,480,286 | |
Beginning balance, shares at Mar. 31, 2022 | 49,728,357 | |||||
Stock-based compensation | 381,602 | 381,602 | ||||
Restricted common stock forfeitures | (50) | 50 | ||||
Net income (loss) | 383,326 | (1,065,513) | (682,187) | |||
Repurchase and cancellation of common stock | (1,850) | (1,960,905) | (1,962,755) | |||
Ending balance, value at Jun. 30, 2022 | $ 47,828 | $ 125,202,080 | $ 325,993 | $ (80,358,955) | $ 45,216,946 | |
Ending balance, shares at Jun. 30, 2022 | 47,828,405 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) | Mar. 31, 2021 $ / shares |
Warrant [Member] | |
Subsidiary, Sale of Stock [Line Items] | |
Warrant exercise price | $ 3.095 |
Warrants One [Member] | |
Subsidiary, Sale of Stock [Line Items] | |
Warrant exercise price | 2.80 |
IPO [Member] | Warrant [Member] | |
Subsidiary, Sale of Stock [Line Items] | |
Common stock issued price per share | 3.095 |
Warrant exercise price | 3.25 |
IPO One [Member] | Warrant [Member] | |
Subsidiary, Sale of Stock [Line Items] | |
Common stock issued price per share | $ 2.80 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash Flows From Operating Activities: | ||
Net income (loss) | $ (7,380,430) | $ 16,339,371 |
Adjustments to reconcile net income (loss) to net cash flows used in operating activities: | ||
Depreciation and amortization | 1,024,238 | 145,459 |
Stock-based compensation | 776,350 | 656,378 |
Change in fair value of warrant derivative liabilities | (5,561,789) | (21,688,835) |
Provision for inventory obsolescence | 192,622 | 361,437 |
Provision for doubtful accounts receivable | (161,768) | |
Gain on extinguishment of debt | (10,000) | |
Change in fair value of contingent consideration promissory note | (486,046) | |
Increase (decrease) in: | ||
Accounts receivable – trade | 721,540 | 817,077 |
Accounts receivable – other | (776,216) | (265,627) |
Inventories | 60,960 | (1,774,922) |
Prepaid expenses | 1,848,058 | (391,084) |
Operating lease right of use assets | 201,376 | 30,332 |
Other assets | (4,799,982) | (616,005) |
Accounts payable | 1,994,602 | (307,744) |
Accrued expenses | (73,127) | 79,290 |
Income taxes payable | 9,969 | (7,231) |
Operating lease obligations | (201,375) | (41,185) |
Contract liabilities | 1,678,503 | 523,516 |
Net cash used in operating activities | (10,932,515) | (6,149,773) |
Cash Flows from Investing Activities: | ||
Purchases of property, plant and equipment | (1,923,501) | (5,452,729) |
Additions to intangible assets | (54,866) | (41,126) |
Cash paid for acquisition, net of cash acquired | (1,012,552) | |
Cash paid for acquisition of Medical Billing Company | (1,153,627) | |
Cash paid for asset acquisition of Medical Billing Company | (230,000) | |
Net cash used in investing activities | (3,361,994) | (6,506,407) |
Cash Flows from Financing Activities: | ||
Repurchase and cancellation of common stock | (4,026,523) | |
Distribution to noncontrolling interest in consolidated subsidiary | (15,692) | |
Net proceeds from sale of common stock in registered direct offerings | 13,346,600 | |
Proceeds from issuance of common stock upon exercise of pre-funded warrants | 53,224,000 | |
Principal payment on contingent consideration promissory notes | (216,822) | |
Net cash (used in) provided by financing activities | (4,259,037) | 66,570,600 |
Net increase (decrease) in cash and cash equivalents | (18,553,546) | 53,914,420 |
Cash, cash equivalents, beginning of period | 32,007,792 | 4,361,758 |
Cash, cash equivalents, end of period | 13,454,246 | 58,276,178 |
Supplemental disclosures of cash flow information: | ||
Cash payments for interest | 27,059 | |
Cash payments for income taxes | 9,969 | 7,231 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Issuance of contingent consideration promissory note for business acquired | 855,000 | 350,000 |
Assets acquired in business acquisitions | 190,631 | |
Liabilities assumed in the business acquisition | 387,005 | 162,552 |
Goodwill acquired in business acquisitions | 2,100,000 | |
Restricted common stock grant | 715 | 450 |
Restricted common stock forfeitures | 65 | 8 |
Amounts allocated to initial measurement of warrant derivative liabilities in connection with the warrants and pre-funded warrants | $ 51,216,058 |
NATURE OF BUSINESS AND SUMMARY
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations: Digital Ally, Inc. was originally incorporated in Nevada on December 13, 2000 as Vegas Petra, Inc. and had no operations until 2004. On November 30, 2004, Vegas Petra, Inc. entered into a Plan of Merger with Digital Ally, Inc., at which time the merged entity was renamed Digital Ally, Inc. The business of Digital Ally, Inc. (with its wholly-owned subsidiaries, Digital Ally International, Inc., Shield Products, LLC, Digital Ally Healthcare, LLC, TicketSmarter, Inc., Worldwide Reinsurance, Ltd., Digital Connect, Inc., Kustom 440, Inc., and its majority-owned subsidiary Nobility Healthcare, LLC, collectively, “Digital Ally,” “Digital,” and the “Company”) is divided into three reportable operating segments: 1) the Video Solutions Segment, 2) the Revenue Cycle Management Segment and 3) the Ticketing Segment. The Video Solutions Segment is our legacy business that produces digital video imaging, storage products, disinfectant and related safety products for use in law enforcement, security and commercial applications. 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 Ticketing 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 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. Such required segment information is included in Note 18. Basis of Presentation: The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The balance sheet at December 31, 2021 has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by generally accepted accounting principles in the United States for complete financial statements. For further information, refer to the audited financial statements and footnotes included in the Company’s annual report on Form 10-K for the year ended December 31, 2021. COVID-19 pandemic/Supply Chain: The COVID-19 pandemic continues to represent an evolving and fluid situation that presents a wide range of potential impacts of varying durations for different global geographies, including locations where the Company has offices, employees, customers, vendors and other suppliers and business partners. Like most U.S.-based businesses, the COVID-19 pandemic and efforts to mitigate the same began to have impacts on our business in March 2020. Since that time, although the original effect of the COVID-19 pandemic has eased, we have continued to operate in an uncertain economic environment that is characterized by, business slowdowns or shutdowns, labor shortages, supply chain challenges, changes in government spending and requirements, regulatory challenges, inflationary pressures and market volatility. We continue to experience operational challenges as a result of worldwide events including the Russia-Ukraine conflict, continued uncertainty associated with the pandemic, and volatility in global markets, which are compounded by the complex integrated global supply chain for both vendors and customers. As the COVID-19 pandemic dissipates at varying times and rates in different regions around the world, there could be a prolonged negative impact on these global supply chains. Our ability to continue operations at specific facilities will be impacted by the interdependencies of the various participants of these global supply chains, which are largely beyond our direct control. A prolonged shut down of these global supply chains could have a material adverse effect on our business, results of operations, cash flows and financial condition. If our suppliers have increased challenges with their workforce (including as a result of illness, absenteeism, reactions to health and safety or government requirements), facility closures, timely access to necessary components, materials and other supplies at reasonable prices, access to capital, and access to fundamental support services (such as shipping and transportation), they may be unable to provide the agreed-upon goods and services in a timely, compliant and cost-effective manner. We have incurred and may in the future incur additional costs and delays in our business resulting from the COVID-19 pandemic, including as a result of higher prices, schedule delays or the need to identify and develop alternative suppliers. In some instances, we may be unable to identify and develop alternative suppliers, incurring additional liabilities under our current contracts and hampering new ones. Our customers have experienced, and may continue to experience, disruptions in their operations and supply chains as a result of the COVID-19 pandemic, which can result in delayed, reduced, or canceled orders, or collection risks, and which may adversely affect our results of operations. Similarly, current, and future restrictions or disruptions of transportation, such as reduced availability of air transport, port closures or delays, and increased border controls, delays or closures, can also impact our ability to meet demand and could materially adversely affect us. The spread of COVID-19 caused us to modify our business practices (including employee travel, employee work locations, cancellation of physical participation in meetings, events and conferences, and social distancing measures). To date, we eased many of these modifications. However, we may, in the future, reinstitute the same or similar changes or take further actions as may be required by government authorities or that we determine are in the best interests of our employees, customers, partners, vendors, and suppliers. Although we managed to continue most of our operations, the future course of the COVID-19 pandemic is uncertain and we cannot assure that this global pandemic, including its economic impact, will not have a material adverse impact on our business, financial position, results of operations and/or cash flows. Basis of Consolidation: The accompanying financial statements include the consolidated accounts of Digital Ally, its wholly-owned subsidiaries, Digital Ally International, Inc., Shield Products, LLC, Digital Ally Healthcare, LLC, TicketSmarter, Inc., Worldwide Reinsurance, Ltd., Digital Connect, Inc., Kustom 440, Inc., and its majority-owned subsidiary Nobility Healthcare, LLC. All intercompany balances and transactions have been eliminated during consolidation. The Company formed Digital Ally International, Inc. during August 2009 to facilitate the export sales of its products. The Company formed Shield Products, LLC in May 2020 to facilitate the sales of its Shield™ line of disinfectant/cleanser products and ThermoVu® line of temperature monitoring equipment. The Company formed Nobility Healthcare, LLC in June 2021 to facilitate the operations of its revenue cycle management solutions and back-office services for healthcare organizations. Lastly, the Company formed TicketSmarter, Inc. upon its acquisition of Goody Tickets, LLC and TicketSmarter, LLC, to facilitate its global ticketing operations. The Company formed Worldwide Reinsurance Ltd., which is a captive insurance company domiciled in Bermuda. It will provide primarily liability insurance coverage to the Company for which insurance may not be currently available or economically feasible in today’s insurance marketplace. The Company formed Digital Connect, Inc. for travel and transportation purposes in 2022. The company formed Kustom 440, Inc. in 2022 to create unique entertainment experiences directly for consumers. Fair Value of Financial Instruments: The carrying amounts of financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and subordinated notes payable approximate fair value because of the short-term nature of these items. Revenue Recognition: The Company applies the provisions of Accounting Standards Codification (ASC) 606-10, Revenue from Contracts with Customers The Company has two different revenue streams, product and service, represented through its three segments. The Company reports all revenues on a gross basis, other than service revenues from the Company’s ticketing and revenue cycle management segments. Revenues generated by all segments are reported net of sales taxes. Video Solutions The Company considers customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with the customer. In situations where sales are to a distributor, the Company had concluded its contracts are with the distributor as the Company holds a contract bearing enforceable rights and obligations only with the distributor. As part of its consideration for the contract, the Company evaluates certain factors including the customers’ ability to pay (or credit risk). For each contract, the Company considers the promise to transfer products, each of which is distinct, to be the identified performance obligations. In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which it expects to be entitled. As the Company’s standard payment terms are less than one year, it has elected the practical expedient under ASC 606-10-32-18 to not assess whether a contract has a significant financing component. The Company allocates the transaction price to each distinct product based on its relative standalone selling price. The product price as specified on the purchase order is considered the standalone selling price as it is an observable input which depicts the price as if sold to a similar customer in similar circumstances. Revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligations are satisfied), which typically occurs at shipment. Further in determining whether control has been transferred, the Company considers if there is a present right to payment and legal title, along with risks and rewards of ownership having transferred to the customer. Customers do not have a right to return the product other than for warranty reasons for which they would only receive repair services or replacement product. The Company has also elected the practical expedient under ASC 340-40-25-4 to expense commissions for product sales when incurred as the amortization period of the commission asset the Company would have otherwise recognized is less than one year. Service and other revenue is comprised of revenues from extended warranties, repair services, cloud revenue and software revenue. Revenue is recognized upon shipment of the product and acceptance of the service or materials by the end customer for repair services. Revenue for extended warranty, cloud service or other software-based products is over the term of the contract warranty or service period. A time-elapsed method is used to measure progress because the Company transfers control evenly over the contractual period. Accordingly, the fixed consideration related to these revenues is generally recognized on a straight-line basis over the contract term, as long as the other revenue recognition criteria have been met. The Company’s multiple performance obligations may include future in-car or body-worn camera devices to be delivered at defined points within a multi-year contract, and in those arrangements, the Company allocates total arrangement consideration over the life of the multi-year contract to future deliverables using management’s best estimate of selling price. Revenue Cycle Management The Company reports revenue cycle management revenues on a net basis, as its primary source of revenue is its end-to-end service fees which are generally determined as a percentage of the invoice amounts collected. These service fees are reported as revenue monthly upon completion of the Company’s performance obligation to provide the agreed upon service. Ticketing The Company reports ticketing revenue on a gross or net basis based on management’s assessment of whether the Company is acting as a principal or agent in the transaction. The determination is based upon the evaluation of control over the event ticket, including the right to sell the ticket, prior to its transfer to the ticket buyer. The Company sells tickets held in inventory, which consists of one performance obligation, being to transfer control of an event ticket to the buyer upon confirmation of the order. The Company acts as the principal in these transactions, as the ticket is owned by the Company at the time of sale, therefore controlling the ticket prior to transferring to the customer. In these transactions, revenue is recorded on a gross basis based on the value of the ticket and is recognized when an order is confirmed. Payment is typically due upon delivery of the ticket. The Company also acts as an intermediary between buyers and sellers through the online secondary marketplace. Revenues derived from this marketplace primarily consist of service fees from ticketing operations, and consists of one primary performance obligation, which is facilitating the transaction between the buyer and seller, being satisfied at the time the order has been confirmed. As the Company does not control the ticket prior to the transfer, the Company acts as an agent in these transactions. Revenue is recognized on a net basis, net of the amount due to the seller when an order is confirmed. The seller is then obligated to deliver the tickets to the buyer per the seller’s listing, and payment is due at the time of sale. Other Contract liabilities consist of deferred revenue and include payments received in advance of performance under the contract and are reported separately as current liabilities and non-current liabilities in the Consolidated Balance Sheets. Such amounts consist of extended warranty contracts, prepaid cloud services and prepaid installation services and are generally recognized as the respective performance obligations are satisfied. During the three months ended June 30, 2022, the Company recognized revenue of $ 0.4 SCHEDULE OF CONTRACT LIABILITIES December 31, 2021 Additions/Reclass Recognized Revenue June 30, 2022 Contract liabilities, current $ 1,665,519 $ 611,938 $ 333,075 $ 1,944,382 Contract liabilities, non-current 2,687,786 2,174,949 775,309 4,087,426 $ 4,353,305 $ 2,786,887 $ 1,108,384 $ 6,031,808 Sales returns and allowances aggregated $ 117,552 45,298 Use of Estimates: The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management utilizes various other estimates, including but not limited to, determining the estimated lives of long-lived assets, determining the potential impairment of long-lived assets, the fair value of warrants, options, the recognition of revenue, inventory valuation reserve, fair value of assets and liabilities acquired in a business combination, incremental borrowing rate on leases, the valuation allowance for deferred tax assets and other legal claims and contingencies. The results of any changes in accounting estimates are reflected in the financial statements in the period in which the changes become evident. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period that they are determined to be necessary. Cash and cash equivalents: Cash and cash equivalents include funds on hand, in bank and short-term investments with original maturities of ninety (90) days or less. SCHEDULE OF SHORT TERM INVESTMENTS June 30, 2022 Adjusted Cost Realized Gains Realized Losses Fair Value Demand deposits $ 5,841,857 $ — $ — $ 5,841,857 Short-term investments with original maturities of 90 days or less (Level 1): Money market funds 7,612,389 — — 7,612,389 $ 13,454,246 $ — $ — $ 13,454,246 December 31, 2021 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Demand deposits $ 5,031,246 $ — $ — $ 5,031,246 Short-term investments with original maturities of 90 days or less (Level 1): Money market funds 14,928,526 — — 14,928,526 Mutual funds 12,079,901 — (31,881 ) 12,048,020 $ 32,039,673 $ — $ (31,881 ) $ 32,007,792 The Company maintains its cash and cash equivalents in banks insured by the Federal Deposit Insurance Corporation (FDIC) in accounts that at times may be in excess of the federally insured limit of $ 250,000 11,682,011 29,836,142 Accounts Receivable: Accounts receivable are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a weekly basis. The Company determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history, and current economic conditions. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. A trade receivable is considered to be past due if any portion of the receivable balance is outstanding for more than thirty (30) days beyond terms. No interest is charged on overdue trade receivables. Goodwill and Other Intangibles: Goodwill Business Combinations Intangibles - Goodwill and Other Goodwill impairment testing is performed at the reporting unit level. Goodwill is assigned to reporting units at the date the goodwill is initially recorded. Once goodwill has been assigned to reporting units, it no longer retains its association with a particular acquisition, and all of the activities within a reporting unit, whether acquired or internally generated, are available to support the value of the goodwill. Traditionally, goodwill impairment testing is a two-step process. Step one involves comparing the fair value of the reporting units to its carrying amount. If the carrying amount of a reporting unit is greater than zero and its fair value is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount is greater than the fair value, the second step must be completed to measure the amount of impairment, if any. Step two involves calculating an implied fair value of goodwill. The Company has adopted ASU 2017-04 which simplifies subsequent goodwill measurement by eliminating step two from the goodwill impairment test. As a result, the Company compares the fair value of a reporting unit with its respective carrying value and recognized an impairment charge for the amount by which the carrying amount exceeded the reporting unit’s fair value. The Company determines the fair value of its reporting units using an income approach. Under the income approach, the Company determined fair value based on estimated discounted future cash flows of each reporting unit. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates and EBITDA margins, discount rates and future market conditions, among others. Long-lived and Other Intangible Assets - Accounting for the Impairment or Disposal of Long-lived Assets Factors considered by the Company include, but are not limited to, significant underperformance relative to historical or projected operating results; significant changes in the manner of use of the acquired assets or the strategy for the overall business; and significant negative industry or economic trends. When the carrying value of a long-lived asset may not be recoverable based upon the existence of one or more of the above indicators of impairment, the Company estimates the future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future undiscounted cash flows and eventual disposition is less than the carrying amount of the asset, the Company recognizes an impairment loss. An impairment loss is reflected as the amount by which the carrying amount of the asset exceeds the fair value of the asset, based on the fair value if available, or discounted cash flows, if fair value is not available. The Company last assessed potential impairments of its long-lived assets as of June 30, 2022 and concluded that there was no impairment. Intangible assets include deferred patent costs and license agreements. Legal expenses incurred in preparation of patent application have been deferred and will be amortized over the useful life of granted patents. Costs incurred in preparation of applications that are not granted will be charged to expense at that time. The Company has entered into several sublicense agreements under which it has been assigned the exclusive rights to certain licensed materials used in its products. These sublicense agreements generally require upfront payments to obtain the exclusive rights to such material. The Company capitalizes the upfront payments as intangible assets and amortizes such costs over their estimated useful life on a straight-line method. Segment Reporting 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 Contingent Consideration In circumstances where an acquisition involves a contingent consideration arrangement that meets the definition of a liability under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity, the Company recognizes a liability equal to the fair value of the contingent payments the Company expects to make as of the acquisition date. The Company remeasures this liability each reporting period and records changes in the fair value through the consolidated statement of operations. Repurchase and Cancellation of Shares From time to time, the Company’s Board of Directors (the “Board”) may authorize share repurchases of common stock. Shares repurchased under Board authorizations are held in treasury for general corporate purposes and cancelled when it is determined appropriate by management. The Company accounts for repurchases of common stock under the cost method. Shares repurchased and cancelled during the period were recorded as a reduction to stockholders’ (deficit) equity. See further discussion of the Company’s share repurchase program in Note 15 –Stockholders’ Equity. Non-Controlling Interests Non-controlling interests in the Company’s Consolidated Financial Statements represents the interest in subsidiaries held by our venture partner. The venture partner holds a noncontrolling interests in the Company’s consolidated subsidiary Nobility Healthcare, LLC. Since the Company consolidates the financial statements of all wholly-owned and majority owned subsidiaries, the noncontrolling owners’ share of each subsidiary’s results of operations are deducted and reported as net income or loss attributable to noncontrolling interest in the Consolidated Statements of Operations. New Accounting Standards In 2020, FASB issued ASU No. 2020-06 to simplify the accounting for convertible debt instruments as the current accounting guidance was determined to be unnecessarily complex and difficult to navigate. The ASU primarily does three things: (1) The ASU eliminates the beneficial conversion feature model and the cash conversion model. The elimination of these models will result in more convertible instruments (convertible debt instruments or convertible preferred stock instruments) being reported as a single liability instrument. The ASU also makes targeted improvements to the related disclosures, (2) The ASU eliminates certain settlement conditions that are required to qualify for derivative scope exception which will allow for less equity contracts to be accounted for as a derivative and (3) The ASU aligns the diluted EPS calculation for convertible instruments by requiring the use of the if-converted method and requiring share settlement be included in the calculation when the contract includes an option of cash or share settlement. ASU No. 2020-06 is effective for fiscal years beginning after December 15, 2021 with early adoption permitted for fiscal years beginning after December 15, 2020. The adoption of this standard did not have a significant impact on the Company’s financial position and results of operations. In 2020, FASB issued ASU No. 2020-01 which represents a consensus of the Emerging Issues Task Force and it clarifies certain items related to ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The ASU (1) clarifies that when an entity is either applying the equity method or upon discontinuing the equity method it should consider observable price changes in orderly transactions for the identical or a similar investment with the same issuer for valuing basis of the investment and (2) clarifies that when determining the accounting for certain forward contracts and purchased options an entity should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option. ASU No. 2020-01 is effective for fiscal years beginning after December 15, 2020 with early adoption permitted. The Company adopted this update for the quarter ended March 31, 2021. The adoption of this standard did not have a significant impact on the Company’s financial position and results of operations. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes - simplifying the accounting for income taxes (Topic 740), which is meant to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. The amendment also improves consistent application and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The adoption of this standard did not have a significant impact on the Company’s financial position and results of operations. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses” to improve information on credit losses for financial assets and net investment in leases that are not accounted for at fair value through net income. ASU 2016-13 replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses. In April 2019 and May 2019, the FASB issued ASU No. 2019-04, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” and ASU No. 2019-05, “Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief” which provided additional implementation guidance on the previously issued ASU. In November 2019, the FASB issued ASU 2019-10, “Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842),” which defers the effective date for public filers that are considered small reporting companies (“SRC”) as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company will continue to evaluate the effect of adopting ASU 2016-13 will have on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangible-Goodwill and Other Internal-Use Software (Subtopic 350-40) In December 2019, the FASB issued ASU No. 2019-12, Income Taxes - simplifying the accounting for income taxes (Topic 740), which is meant to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. The amendment also improves consistent application and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The amendments in ASU 2019-12 are effective for public business entities for fiscal years beginning after Dec. 15, 2020. |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 2. INVENTORIES Inventories consisted of the following at June 30, 2022 and December 31, 2021: SCHEDULE OF INVENTORIES June 30, 2022 December 31, 2021 Raw material and component parts– video solutions segment $ 4,083,713 $ 3,062,046 Work-in-process– video solutions segment 153 — Finished goods – video solutions segment 7,866,087 8,410,307 Finished goods – ticketing segment 1,178,468 2,102,272 Subtotal 13,128,421 13,574,625 Reserve for excess and obsolete inventory– video solutions segment (3,272,832 ) (3,353,458 ) Reserve for excess and obsolete inventory – ticketing segment (449,635 ) (561,631 ) Total inventories $ 9,405,954 $ 9,659,536 Finished goods inventory includes units held by potential customers and sales agents for test and evaluation purposes. The cost of such units totaled $ 135,573 153,976 |
DEBT OBLIGATIONS
DEBT OBLIGATIONS | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
DEBT OBLIGATIONS | NOTE 3. DEBT OBLIGATIONS Debt obligations is comprised of the following: SUMMARY OF DEBT OBLIGATIONS June 30, 2022 December 31, 2021 Economic injury disaster loan (EIDL) $ 150,000 $ 150,000 Contingent consideration promissory note – Nobility Healthcare Division Acquisition 211,867 317,212 Contingent consideration promissory note – Nobility Healthcare Division Acquisition 426,326 650,000 Contingent consideration promissory note – Nobility Healthcare Division Acquisition 481,151 — Contingent consideration promissory note – Nobility Healthcare Division Acquisition — — Debt obligations 1,269,344 1,117,212 Less: current maturities of debt obligations 514,664 389,934 Debt obligations, long-term $ 754,680 $ 727,278 Debt obligations mature as follows as of June 30, 2022: SCHEDULE OF MATURITY OF DEBT OBLIGATIONS June 30, 2022 2022 (July 1, 2022 to December 31, 2022) $ 257,317 2023 514,722 2024 355,295 2025 3,412 2026 3,542 2027 and thereafter 135,056 Total $ 1,269,344 2020 Small Business Administration Notes On May 4, 2020, the Company issued a promissory note in connection with the receipt of the Paycheck Protection Program (“PPP”) Loan of $ 1,418,900 two 1.0 79,851 1,418,900 10,000 On May 12, 2020, the Company received $ 150,000 150,000 Under the terms of the note issued under the EIDL program, interest accrues on the outstanding principal at the rate of 3.75 731 Contingent Consideration Promissory Notes On June 30, 2021, Nobility Healthcare, a subsidiary of the Company, issued a contingent consideration promissory note (the “June Contingent Note”) in connection with a stock purchase agreement between Nobility Healthcare and a private company (the “June Seller”) of $ 350,000 three 3.00 975,000 The June Contingent Note is considered to be additional purchase price; therefore, the estimated fair value of the contingent liability is recorded as a liability at the acquisition date and the fair value is considered part of the consideration paid for the acquisition with subsequent changes in fair value recorded as a gain or loss in the Consolidated Statements of Operations. Management recorded the contingent consideration promissory note at its estimated fair value of $ 350,000 57,724 211,868 3,844 3,844 47,620 On August 31, 2021, Nobility Healthcare issued another contingent consideration promissory note (the “August Contingent Payment Note”) in connection with a stock purchase agreement between Nobility Healthcare and a private company (the “August Sellers”) of $ 650,000 three 3.00 3,000,000 The August Contingent Payment Note is considered to be additional purchase price, therefore the estimated fair value of the contingent liability is recorded as a liability at the acquisition date and the fair value is considered part of the consideration paid for the acquisition with subsequent changes in fair value recorded as a gain or loss in the Consolidated Statements of Operations. Management recorded the contingent consideration promissory note at its estimated fair value of $ 650,000 159,098 426,326 172,091 172,091 64,576 . On January 1, 2022, Nobility Healthcare issued another contingent consideration promissory note (the “January Contingent Payment Note”) in connection with a stock purchase agreement between Nobility Healthcare and a private company (the “January Sellers”) of $ 750,000 two 3.00 3,500,000 The January Contingent Payment Note is considered to be additional purchase price, therefore the estimated fair value of the contingent liability is recorded as a liability at the acquisition date and the fair value is considered part of the consideration paid for the acquisition. Management has recorded the contingent consideration promissory note at its estimated fair value of $ 750,000 481,151 268,849 268,849 On February 1, 2022, Nobility Healthcare issued another contingent consideration promissory note (the “February Contingent Payment Note”) in connection with an asset purchase agreement between Nobility Healthcare and a private company (the “February Sellers”) of $ 105,000 three 3.00 440,000 The February Contingent Payment Note is considered to be additional purchase price, therefore the estimated fair value of the contingent liability is recorded as a liability at the acquisition date and the fair value is considered part of the consideration paid for the acquisition. Management has recorded the contingent consideration promissory note at its estimated fair value of $ 105,000 0 105,000 105,000 |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENT | NOTE 4. FAIR VALUE MEASUREMENT In accordance with ASC Topic 820 — Fair Value Measurements and Disclosures ASC 820 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: ● Level 1 — Quoted prices in active markets for identical assets and liabilities ● Level 2 — Other significant observable inputs (including quoted prices in active markets for similar assets or liabilities) ● Level 3 — Significant unobservable inputs (including the Company’s own assumptions in determining the fair value) The following table represents the Company’s hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021: SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS Level 1 Level 2 Level 3 Total June 30, 2022 Level 1 Level 2 Level 3 Total Liabilities: Warrant derivative liabilities $ — $ — $ 9,285,143 $ 9,285,143 Contingent consideration promissory notes — — 1,119,344 1,119,344 Liabilities, fair value $ — $ — $ 10,404,487 $ 10,404,487 Level 1 Level 2 Level 3 Total December 31, 2021 Level 1 Level 2 Level 3 Total Liabilities: Warrant derivative liabilities $ — $ — $ 14,846,932 $ 14,846,932 Contingent consideration promissory notes and contingent consideration earn-out agreement — — 967,212 967,212 Liabilities, fair value $ — $ — $ 15,814,144 $ 15,814,144 The following table represents the change in Level 3 tier value measurements for the periods ended June 30, 2022: SCHEDULE OF FAIR VALUE MEASUREMENTS CHANGE IN LEVEL 3 INPUTS Contingent Consideration Promissory Notes Warrant Derivative Liabilities Balance, December 31, 2021 $ 967,212 $ 14,846,932 Issuance of contingent consideration promissory note - Revenue Cycle Management Segment Acquisition 750,000 — Issuance of contingent consideration promissory note - Revenue Cycle Management Segment Acquisition 105,000 — Principal payments on contingent consideration promissory notes – Revenue Cycle Management Acquisitions (116,198 ) — Change in fair value of contingent consideration promissory notes - Revenue Cycle Management Acquisitions 56,050 — Change in fair value of warrant derivative liabilities — (148,171 ) Balance, March 31, 2022 $ 1,762,064 $ 14,698,761 Principal payments on contingent consideration promissory notes – Revenue Cycle Management Acquisitions (100,624 ) — Change in fair value of contingent consideration promissory notes - Revenue Cycle Management Acquisitions (542,096 ) — Change in fair value of warrant derivative liabilities — (5,413,618 ) Balance, June 30, 2022 $ 1,119,344 $ 9,285,143 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 6 Months Ended |
Jun. 30, 2022 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | NOTE 5. ACCRUED EXPENSES Accrued expenses consisted of the following at June 30, 2022 and December 31, 2021: SCHEDULE OF ACCRUED EXPENSES June 30, December 31, Accrued warranty expense $ 16,389 $ 13,742 Accrued litigation costs 247,984 250,000 Accrued sales commissions 48,000 30,213 Accrued payroll and related fringes 461,189 453,858 Accrued sales returns and allowances 117,552 45,298 Accrued taxes 104,506 180,486 Other 135,117 202,401 Total accrued expenses $ 1,130,737 $ 1,175,998 Accrued warranty expense was comprised of the following for the six months ended June 30, 2022: SCHEDULE OF ACCRUED WARRANTY EXPENSE Beginning balance $ 13,742 Provision for warranty expense 41,166 Charges applied to warranty reserve (38,519 ) Ending balance $ 16,389 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 6. INCOME TAXES The effective tax rate for the three months ended June 30, 2022 and 2021 varied from the expected statutory rate due to the Company continuing to provide a 100 The Company has incurred operating losses in recent years, and it continues to be in a three-year cumulative loss position at June 30, 2022. Accordingly, the Company determined there was not sufficient positive evidence regarding its potential for future profits to outweigh the negative evidence of our three-year cumulative loss position under the guidance provided in ASC 740. Therefore, it determined to continue to provide a 100 81.4 |
PREPAID EXPENSES
PREPAID EXPENSES | 6 Months Ended |
Jun. 30, 2022 | |
Prepaid Expenses | |
PREPAID EXPENSES | NOTE 7. PREPAID EXPENSES Prepaid expenses were the following at June 30, 2022 and December 31, 2021: SCHEDULE OF PREPAID EXPENSE June 30, December 31, Prepaid inventory $ 6,710,710 $ 6,546,100 Prepaid advertising 657,831 2,455,527 Other 542,894 727,155 Total prepaid expenses $ 7,911,435 $ 9,728,782 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 8. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following at June 30, 2022 and December 31, 2021: SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT Estimated June 30, December 31, Building 30 $ 4,909,478 $ 4,909,478 Land — 789,734 789,734 Office furniture, fixtures and equipment 3 20 2,013,281 493,652 Warehouse and production equipment 3 5 78,321 65,948 Demonstration and tradeshow equipment 2 5 131,838 82,337 Building improvements 2 15 1,253,937 911,940 Rental equipment 1 3 8,584 8,584 Total cost 9,185,173 7,261,673 Less: accumulated depreciation and amortization (727,974 ) (420,647 ) Net property, plant and equipment $ 8,457,199 $ 6,841,026 Depreciation expense for the six months ended June 30, 2022 and June 30, 2021 was $ 307,328 95,346 |
OPERATING LEASE
OPERATING LEASE | 6 Months Ended |
Jun. 30, 2022 | |
Operating Lease | |
OPERATING LEASE | NOTE 9. OPERATING LEASE On May 13, 2020, the Company entered into an operating lease for new warehouse and office space, which the Company currently utilizes as one of its office, assembly and warehouse locations. The original lease agreement was amended on August 28, 2020 to correct the footage under lease and monthly payment amounts resulting from such correction. The lease terms, as amended, include no base rent for the first nine months and monthly payments ranging from $ 12,398 14,741 termination date of December 2026. fifty-four months. The Company entered into an operating lease with a third party in October 2019 for copiers used for office and warehouse purposes. The terms of the lease include 48 1,598 maturity date of October 2023. sixteen months. On June 30, 2021, the Company completed the acquisition of a private medical billing company, through its revenue cycle management segment. Upon completion of this acquisition, the Company became responsible for the operating lease for the seller’s office space. The lease terms include monthly payments ranging from $ 2,648 2,774 termination date of July 2024. twenty-five months. On August 31, 2021, the Company completed the acquisition of a private medical billing company, through its revenue cycle management segment. Upon completion of this acquisition, the Company became responsible for the operating lease for the seller’s office space. The lease terms include monthly payments ranging from $ 11,579 11,811 termination date of March 2023. nine months. On September 1, 2021, the Company completed the TicketSmarter Acquisition, in its ticketing segment. Upon completion of this acquisition, the Company became responsible for the operating lease for TicketSmarter Inc.’s office space. The lease terms include monthly payments ranging from $ 7,211 7,364 termination date of December 2022. six months. On January 1, 2022, the Company completed the acquisition of a private medical billing company, through its revenue cycle management segment. Upon completion of this acquisition, the Company became responsible for the operating lease for the seller’s office space. The lease terms include monthly payments ranging from $ 4,233 4,626 termination date of June 2025. thirty-six months. Lease expense related to the office space and copier operating leases were recorded on a straight-line basis over their respective lease terms. Total lease expense under the six operating leases was approximately $ 119,230 274,302 The weighted-average remaining lease term related to the Company’s lease liabilities as of June 30, 2022 was 3.5 The discount rate implicit within the Company’s operating leases was not generally determinable and therefore the Company determined the discount rate based on its incremental borrowing rate on the information available at commencement date. As of commencement date, the operating lease liabilities reflect a weighted average discount rate of 8 The following sets forth the operating lease right of use assets and liabilities as of June 30, 2022: SCHEDULE OF OPERATING LEASES RIGHT OF USE ASSETS AND LIABILITIES Assets: Operating lease right of use assets $ 951,928 Liabilities: Operating lease obligations-current portion $ 353,646 Operating lease obligations-less current portion 666,477 Total operating lease obligations $ 1,020,123 Following are the minimum lease payments for each year and in total: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS Year ending December 31: 2022 (July 1, to December 31, 2022) $ 250,285 2023 305,627 2024 245,761 2025 196,462 Thereafter 175,113 Total undiscounted minimum future lease payments 1,173,248 Imputed interest (153,125 ) Total operating lease liability $ 1,020,123 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 10. GOODWILL AND OTHER INTANGIBLE ASSETS Intangible assets consisted of the following at June 30, 2022 and December 31, 2021: SCHEDULE OF INTANGIBLE ASSETS June 30, 2022 December 31, 2021 Gross Accumulated Net Gross Accumulated Net Amortized intangible assets: Licenses (video solutions segment) $ 194,286 $ 73,866 $ 120,420 $ 194,286 $ 65,578 $ 128,708 Patents and trademarks (video solutions segment) 493,945 303,485 190,460 493,945 233,471 260,474 Sponsorship agreement network (ticketing segment) 5,600,000 933,333 4,666,667 5,600,000 373,333 5,226,667 SEO content (ticketing segment) 600,000 125,000 475,000 600,000 50,000 550,000 Personal seat licenses (ticketing 201,931 5,583 196,348 201,931 2,244 199,687 Client agreements (revenue cycle management segments) 792,079 — 792,079 — — — 7,882,241 1,441,267 6,440,974 7,090,162 724,626 6,365,536 Indefinite life intangible assets: Goodwill (ticketing and revenue cycle management segments) 11,574,468 — 11,574,468 9,931,547 — 9,931,547 Trade name (ticketing segment) 600,000 — 600,000 600,000 — 600,000 Patents and trademarks pending 60,027 — 60,027 5,430 — 5,430 Total $ 20,116,736 $ 1,441,267 $ 18,675,469 $ 17,627,139 $ 724,626 $ 16,902,513 Patents and trademarks pending will be amortized beginning at the time they are issued by the appropriate authorities. If issuance of the final patent or trademark is denied, then the amount deferred will be immediately charged to expense. Amortization expense for the three months ended June 30, 2022 and 2021 was $ 358,944 and $ 27,483 , respectively, and $ 716,910 50,114 SCHEDULE OF ESTIMATED AMORTIZATION FOR INTANGIBLE ASSETS Year ending December 31: 2022 (July 1, to December 31, 2022) $ 813,792 2023 1,448,622 2024 1,398,065 2025 1,311,958 2026 and thereafter 1,468,537 Total $ 6,440,974 |
OTHER ASSETS
OTHER ASSETS | 6 Months Ended |
Jun. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ASSETS | NOTE 11. OTHER ASSETS Other assets were the following at June 30, 2022 and December 31, 2021: SCHEDULE OF OTHER ASSETS June 30, December 31, Lease receivable $ 3,337,608 $ 1,921,021 Sponsorship network 3,337,465 30,752 Other 232,208 155,526 Total other assets $ 6,907,281 $ 2,107,299 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12. COMMITMENTS AND CONTINGENCIES COVID-19 pandemic The COVID-19 pandemic represents a fluid situation that presents a wide range of potential impacts of varying durations for different global geographies, including locations where we have offices, employees, customers, vendors and other suppliers and business partners. Like most US-based businesses, the COVID-19 pandemic and efforts to mitigate the same began to have impacts on our business in March 2020. Since that time, the COVID-19 pandemic has dramatically impacted the global health and economic environment, including millions of confirmed cases, business slowdowns or shutdowns, labor shortages, supply chain challenges, changes in government spending and requirements, regulatory challenges, inflationary pressures and market volatility. We operate within the complex integrated global supply chain for both vendors and customers. As the COVID-19 pandemic dissipates at varying times and rates in different regions around the world, there could be a prolonged negative impact on these global supply chains. Our ability to continue operations at specific facilities will be impacted by the interdependencies of the various participants of these global supply chains, which are largely beyond our direct control. A prolonged shut down of these global supply chains could have a material adverse effect on our business, results of operations, cash flows and financial condition. If our suppliers have increased challenges with their workforce (including as a result of illness, absenteeism, reactions to health and safety or government requirements), facility closures, timely access to necessary components, materials and other supplies at reasonable prices, access to capital, and access to fundamental support services (such as shipping and transportation), they may be unable to provide the agreed-upon goods and services in a timely, compliant and cost-effective manner. We have incurred and may in the future incur additional costs and delays in our business resulting from the COVID-19 pandemic, including as a result of higher prices, schedule delays or the need to identify and develop alternative suppliers. In some instances, we may be unable to identify and develop alternative suppliers, incurring additional liabilities under our current contracts and hampering new ones. Our customers have experienced, and may continue to experience, disruptions in their operations and supply chains as a result of the COVID-19 pandemic, which can result in delayed, reduced, or canceled orders, or collection risks, and which may adversely affect our results of operations. Similarly, current, and future restrictions or disruptions of transportation, such as reduced availability of air transport, port closures or delays, and increased border controls, delays or closures, can also impact our ability to meet demand and could materially adversely affect us. The spread of COVID-19 caused us to modify our business practices (including employee travel, employee work locations, cancellation of physical participation in meetings, events and conferences, and social distancing measures). To date, we have eased many of these modifications. However, we may in the future reinstitute the same or similar changes or take further actions as may be required by government authorities or that we determine are in the best interests of our employees, customers, partners, vendors, and suppliers. Although we managed to continue most of our operations, the future course of the COVID-19 pandemic is uncertain and we cannot assure that this global pandemic, including its economic impact, will not have a material adverse impact on our business, financial position, results of operations and/or cash flows. Litigation From time to time, we are notified that we may be a party to a lawsuit or that a claim is being made against us. It is our policy to not disclose the specifics of any claim or threatened lawsuit until the summons and complaint are actually served on us. After carefully assessing the claim, and assuming we determine that we are not at fault or we disagree with the damages or relief demanded, we vigorously defend any lawsuit filed against us. We record a liability when losses are deemed probable and reasonably estimable. When losses are deemed reasonably possible but not probable, we determine whether it is possible to provide an estimate of the amount of the loss or range of possible losses for the claim, if material for disclosure. In evaluating matters for accrual and disclosure purposes, we take into consideration factors such as our historical experience with matters of a similar nature, the specific facts and circumstances asserted, the likelihood of our prevailing, the availability of insurance, and the severity of any potential loss. We re-evaluate and update accruals as matters progress over time. On May 31, 2022, the Company filed a lawsuit against Culp McAuley, Inc. (“defendant”) in the United States District Court for the District of Kansas. The lawsuit arises from the defendant’s multiple breaches of its obligations to the Company. The Company seeks monetary damages and injunctive relief based on certain conduct by the defendant. On July 18, 2022, the defendant filed its Answer to the Company’s Verified Complaint and included Counterclaims alleging breach of contract and seeking monetary damages. On August 8, 2022, the Company filed its Reply and Affirmative Defenses to the Counterclaims by, among other things, denying the allegations and any and all liability. We have not concluded that a material loss related to the allegations is probable, nor have we accrued a liability related to these claims. Although we believe a loss could be reasonably possible (as defined in ASC 450), we do not have sufficient information to determine the amount or range of reasonably possible loss with respect to the potential damages given that the dispute is yet to enter the discovery process. We will continue to vigorously pursue these claims, and we continue to believe that we have valid grounds for recovery of the disputed deliverables. However, there can be no assurances as to the outcome of the dispute. While the ultimate resolutions are unknown, based on the information currently available, we do not expect that this lawsuit will individually, or in the aggregate, have a material adverse effect to our results of operations, financial condition and cash flows. However, the outcome of any litigation is inherently uncertain and there can be no assurance that any expense, liability or damages that may ultimately result from the resolution of these matters will be covered by our insurance or will not be in excess of amounts recognized or provided by insurance coverage and will not have a material adverse effect on our operating results, financial condition or cash flows. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 13. STOCK-BASED COMPENSATION The Company recorded pre-tax compensation expense related to the grant of stock options and restricted stock issued of $ 381,601 330,213 776,350 656,378 As of June 30, 2022, the Company had adopted nine separate stock option and restricted stock plans: (i) the 2005 Stock Option and Restricted Stock Plan (the “2005 Plan”), (ii) the 2006 Stock Option and Restricted Stock Plan (the “2006 Plan”), (iii) the 2007 Stock Option and Restricted Stock Plan (the “2007 Plan”), (iv) the 2008 Stock Option and Restricted Stock Plan (the “2008 Plan”), (v) the 2011 Stock Option and Restricted Stock Plan (the “2011 Plan”), (vi) the 2013 Stock Option and Restricted Stock Plan (the “2013 Plan”), (vii) the 2015 Stock Option and Restricted Stock Plan (the “2015 Plan”), (viii) the 2018 Stock Option and Restricted Stock Plan (the “2018 Plan”) and (ix) the 2020 Stock Option and Restricted Stock Plan (the “2020 Plan”). The 2005 Plan, 2006 Plan, 2007 Plan, 2008 Plan, 2011 Plan, 2013 Plan, 2015 Plan, 2018 Plan and 2020 Plan are referred to as the “Plans.” These Plans permit the grant of stock options or restricted stock to the Company’s employees, non-employee directors and others for up to a total of 6,675,000 21,553 5,689 54,787 10,625 94,651 no 40,499 no The Company believes that such awards better align the interests of our employees with those of its stockholders. Stock option grants. The Board of Directors has granted stock options under the Plans. These option awards have been granted with an exercise price equal to the market price of the Company’s stock at the date of grant with such option awards generally vesting based on the completion of continuous service and having ten-year contractual terms. These option awards typically provide for accelerated vesting if there is a change in control (as defined in the Plans). The Company has registered all shares of common stock that are issuable under its Plans with the SEC. A total of 190,845 The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model. A summary of all stock option activity under the Plans for the six months ended June 30, 2022 is as follows: SUMMARY OF STOCK OPTIONS OUTSTANDING Options Number of Shares Weighted Average Exercise Price Outstanding at December 31, 2021 1,086,063 $ 2.37 Granted 25,000 0.98 Exercised — — Forfeited (23,750 ) (4.33 ) Outstanding at June 30, 2022 1,087,313 $ 2.30 Exercisable at June 30, 2022 999,813 $ 2.36 The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model. The total estimated grant date fair value stock options issued during the six months ended June 30, 2022 was $ 22,768 SCHEDULE OF FAIR VALUE OF STOCK OPTIONS ASSUMPTION Volatility – range 111.67 % Risk-free rate 1.8 % Contractual term 10.0 Exercise price $ 0.98 The Plans allow for the cashless exercise of stock options. This provision allows the option holder to surrender/cancel options with an intrinsic value equivalent to the purchase/exercise price of other options exercised. There were no shares surrendered pursuant to cashless exercises during the six months ended June 30, 2022 and 2021. The aggregate intrinsic value of options outstanding was $- 0 0 0 0 As of June 30, 2022, the unrecognized portion of stock compensation expense on all existing stock options was $- 0 The following table summarizes the range of exercise prices and weighted average remaining contractual life for outstanding and exercisable options under the Company’s option plans as of June 30, 2022: SCHEDULE OF SHARES AUTHORIZED UNDER STOCK OPTION PLANS BY EXERCISE PRICE RANGE Outstanding options Exercisable options Exercise price range Number of options Weighted average contractual life Number of options Weighted average remaining contractual life $ 0.01 2.49 740,000 8.1 652,500 8.0 $ 2.50 3.49 310,313 5.8 310,313 5.8 $ 3.50 4.49 37,000 3.3 37,000 3.3 1,087,313 7.3 999,813 7.1 Restricted stock grants. A summary of all restricted stock activity under the Plans for the six months ended June 30, 2022 is as follows: SUMMARY OF RESTRICTED STOCK ACTIVITY Number of Restricted shares Weighted average grant date fair value Nonvested balance, December 31, 2021 1,057,375 $ 1.87 Granted 715,000 1.07 Vested (463,375 ) (1.89 ) Forfeited (65,000 ) (1.06 ) Nonvested balance, June 30, 2022 1,244,000 $ 1.45 The Company estimated the fair market value of these restricted stock grants based on the closing market price on the date of grant. As of June 30, 2022, there were $ 880,299 fifty-five The nonvested balance of restricted stock vests as follows: SCHEDULE OF NON-VESTED BALANCE OF RESTRICTED STOCK Years ended Number of shares 2022 (July 1, 2022 through December 31, 2022) 119,500 2023 663,000 2024 279,000 2025 80,000 2026 72,500 2027 30,000 |
COMMON STOCK PURCHASE WARRANTS
COMMON STOCK PURCHASE WARRANTS | 6 Months Ended |
Jun. 30, 2022 | |
Common Stock Purchase Warrants | |
COMMON STOCK PURCHASE WARRANTS | NOTE 14. COMMON STOCK PURCHASE WARRANTS The Company has issued common stock purchase warrants in conjunction with various debt and equity issuances. The warrants are either immediately exercisable or have a delayed initial exercise date, no more than six months from their respective issue date and allow the holders to purchase up to 25,674,931 2.60 3.75 The warrants expire from August 21, 2022 through September 18, 2026 On January 14, 2021 and February 1, 2021, the Company issued warrants to purchase a total of 42,550,000 7,200,000 10,000,000 pre-funded warrants to purchase up to 11,050,000 common stock purchase warrants (“February Warrants”) to purchase up to an aggregate of 14,300,000 On August 19, 2021, the Company entered into a Warrant Exchange Agreement (the “Exchange Agreement”) with certain investors cancelling February Warrants exercisable for an aggregate of 7,681,540 7,681,540 6,618,460 September 18, 2026 3.25 On the date of the exchange, the cancelled February Warrants and Exchange Warrants were valued at $ 11,818,644 12,114,424 295,780 SCHEDULE OF WARRANT MODIFICATION Original terms at August 19, 2021 Modified terms at August 19, 2021 Volatility - range 109.3 % 104.7 % Risk-free rate 0.78 % 0.78 % Dividend 0 % 0 % Remaining contractual term 4.5 5.1 Exercise price $ 3.25 $ 3.25 Common stock issuable under the warrants 14,300,000 14,300,000 Fluctuations in the Company’s stock price is a primary driver for the changes in the derivative valuations during each reporting period. As the stock price increases for each of the related derivative instruments, the value to the holder of the instrument generally increases, therefore increasing the liability on the Company’s balance sheet. Additionally, stock price volatility is one of the significant unobservable inputs used in the fair value measurement of each of the Company’s derivative instruments. The simulated fair value of these liabilities is sensitive to changes in the Company’s expected volatility. Increases in expected volatility would generally result in higher fair value measurement. A 10 The Company has utilized the following assumptions in its Black-Scholes option valuation model to calculate the estimated fair value of the warrant derivative liabilities as of their date of issuance and as of June 30, 2022: SCHEDULE OF FAIR VALUE OF THE WARRANT DERIVATIVE LIABILITIES Issuance date assumptions June 30, 2022 assumptions Volatility - range 106.6 166.6 % 104.7 % Risk-free rate 0.08 0.49 % 3.01 % Dividend 0 % 0 % Remaining contractual term 0.01 5 3.5 4.2 Exercise price $ 2.80 3.25 $ 3.25 Common stock issuable under the warrants 42,550,000 24,300,000 The following table summarizes information about shares issuable under warrants outstanding during the six months ended June 30, 2022: SUMMARY OF WARRANT ACTIVITY Warrants Weighted average exercise price Vested Balance, January 1, 2022 26,008,598 $ 3.24 Granted — — Exercised — — Forfeited/cancelled (333,667 ) 3.51 Vested Balance, June 30, 2022 25,674,931 $ 3.24 The total intrinsic value of all outstanding warrants aggregated $- 0 45 The following table summarizes the range of exercise prices and weighted average remaining contractual life for outstanding and exercisable warrants to purchase shares of common stock as of June 30, 2022: SUMMARY OF RANGE OF EXERCISE PRICES AND WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE OF WARRANTS Outstanding and exercisable warrants Exercise price Number of warrants Weighted average remaining contractual life $ 2.60 465,712 1.1 $ 3.00 316,800 0.8 $ 3.25 24,300,000 3.9 $ 3.36 566,666 0.7 $ 3.75 25,753 0.1 25,674,931 3.8 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 15. STOCKHOLDERS’ EQUITY Cancellation of Restricted Stock During the six months ended June 30, 2022, the Company cancelled 65,000 Stock Repurchase Program On December 6, 2021, the board of directors of the Company authorized the repurchase of up to $ 10.0 1,849,952 1,962,755 3,725,986 4,026,523 SCHEDULE OF STOCK REPURCHASE Period Total Number of Average Price Total Number of Maximum Approximate Dollar Value of December 2021 1,734,838 $ 1.14 1,734,838 — January 2022 697,093 1.11 697,093 — February 2022 692,984 1.12 692,984 — March 2022 485,957 1.06 485,957 — April 2022 595,476 1.14 595,476 — May 2022 716,911 1.08 716,911 — June 2022 537,565 0.96 537,565 — Total all plans 5,460,824 $ 1.10 5,460,824 $ 3,998,398 On June 30, 2022, the board of directors of the Company elected to terminate the Program, effective immediately. The Program began in December 2021, with the Company purchasing a total of 5,460,824 6,001,602 Noncontrolling Interests The Company owns a 51 49 383,326 0 285,232 0 |
NET EARNINGS (LOSS) PER SHARE
NET EARNINGS (LOSS) PER SHARE | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
NET EARNINGS (LOSS) PER SHARE | NOTE 16. NET EARNINGS (LOSS) PER SHARE The calculation of the weighted average number of shares outstanding and loss per share outstanding for the three and six months ended June 30, 2022 and 2021 are as follows: SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING AND LOSS PER SHARE OUTSTANDING Three Months Ended June 30, Six Months Ended 2022 2021 2022 2021 Numerator for basic and diluted income per share – Net income (loss) attributable to common stockholders $ (1,065,513 ) $ (5,382,487 ) $ (7,665,662 ) $ 16,339,371 Denominator for basic loss per share – weighted average shares outstanding 48,657,440 51,513,691 49,787,562 48,177,399 Dilutive effect of shares issuable under stock options and warrants outstanding — — — — Denominator for diluted loss per share – adjusted weighted average shares outstanding 48,657,440 51,513,691 49,787,562 48,177,399 Net loss per share: Basic $ (0.02 ) $ (0.10 ) $ (0.15 ) $ 0.34 Diluted $ (0.02 ) $ (0.10 ) $ (0.15 ) $ 0.34 Basic income (loss) per share is based upon the weighted average number of common shares outstanding during the period. For the three and six months ended June 30, 2022 and 2021, all shares issuable upon conversion of convertible debt and the exercise of outstanding stock options and warrants were antidilutive, and, therefore, not included in the computation of diluted income (loss) per share. |
DIGITAL ALLY HEALTHCARE VENTURE
DIGITAL ALLY HEALTHCARE VENTURE | 6 Months Ended |
Jun. 30, 2022 | |
Digital Ally Healthcare Venture | |
DIGITAL ALLY HEALTHCARE VENTURE | NOTE 17. DIGITAL ALLY HEALTHCARE VENTURE On June 4, 2021, Digital Ally Healthcare, a wholly-owned subsidiary of the Company, entered into a venture with Nobility LLC (“Nobility”), an eight-year-old revenue cycle management (“RCM”) company servicing the medical industry, to form Nobility Healthcare, LLC (“Nobility Healthcare”). Digital Ally Healthcare is capitalizing the venture with $ 13.5 Digital Ally Healthcare owns 51% of the venture that entitles it to 51% of the distributable cash as defined in the venture’s operating agreement plus a cumulative preferred return of 10% per annum on its invested capital. Nobility will receive a management fee and 49% of the distributable cash, subordinated to Digital Ally Healthcare’s preferred return On June 30, 2021, the Company’s revenue cycle management segment completed the acquisition of a private medical billing company (the “Healthcare Acquisition”). In accordance with the stock purchase agreement, the Company’s revenue cycle management segment agreed to a non-refundable initial payment (the “Initial Payment Amount”) of $ 850,000 350,000 317,212 162,552 1,376,509 164,630 75,000 The Company accounts for business combinations using the acquisition method and that the Company has early adopted the amendments of Regulation S-X dated May 21, 2020 and has concluded that this acquisition was not significant. Accordingly, the presentation of the assets acquired, historical financial statements under Rule 3-05 and related pro forma information under Article 8 of Regulation S-X, respectively, are not required to be presented. Under the acquisition method, the purchase price of the Healthcare Acquisition has been allocated to the acquired tangible and identifiable intangible assets and assumed liabilities based on their estimated fair values at the time of the Healthcare Acquisition. This allocation involves a number of assumptions, estimates, and judgments that could materially affect the timing or amounts recognized in our financial statements. Our assumptions and estimates are based upon information obtained from the management of the Company’s revenue cycle management segment. The acquisition was structured as stock purchase, therefore the excess purchase price over the fair value of net tangible assets acquired was recorded as goodwill, which will not be amortized for income tax filing purposes. The results of operations of acquired businesses are included in the consolidated financial statements from the acquisition date. The purchase price of the Healthcare Acquisition was allocated to the tangible assets, and assumed liabilities based on their preliminary estimated fair values at the time of the Healthcare Acquisition. The Company retained the services of an independent valuation firm to determine the fair value of these identifiable intangible assets. The Company will continue to evaluate the fair value of the identified intangible assets. The preliminary and final estimated fair value of assets acquired, and liabilities assumed in the Healthcare Acquisition were as follows: SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION Purchase price allocation Description Preliminary Final Assets acquired: Tangible assets acquired, consisting of acquired cash, accounts receivable and right of use asset $ 174,351 $ 174,351 Intangible assets acquired – Client Agreements $ 174,351 $ 174,351 Intangible assets acquired – client agreements — 457,079 Goodwill 1,125,000 667,921 Liabilities assumed consisting of a promissory note issued by the selling shareholders which was paid off at closing, net of lease liability assumed 77,158 77,158 Liabilities assumed pursuant to stock purchase agreement 77,158 77,158 Net assets acquired and liabilities assumed $ 1,376,509 $ 1,376,509 Consideration: Cash paid at Healthcare Acquisition date $ 1,026,509 $ 1,026,509 Contingent consideration earn-out agreement 350,000 350,000 Total Healthcare Acquisition purchase price $ 1,376,509 $ 1,376,509 Definite-lived intangible assets consist of client agreements and are amortized on a straight-line basis over their ten-year estimated useful life. See Note 10. Goodwill and Other Intangible Assets. For the period from the date of the Healthcare Acquisition to June 30, 2022, the Company adjusted its preliminary fair value estimates and estimated useful lives based upon information obtained through June 30, 2022, which resulted in adjustments to the preliminary allocation of the purchase price. These adjustments primarily related to estimated identifiable intangible asset fair values of client agreements and goodwill. During the measurement period (which is the period required to obtain all necessary information that existed at the acquisition date, or to conclude that such information is unavailable, not to exceed one year), additional assets or liabilities may be recognized, or there could be changes to the amounts of assets or liabilities previously recognized on a preliminary basis, if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of these assets or liabilities as of that date. The change in fair value of the contingent consideration is more fully described in Note 3, “Debt Obligations”. On August 31, 2021, the Company’s revenue cycle management segment completed the acquisition of another private medical billing company (the “Medical Billing Acquisition”). In accordance with the stock purchase agreement, Nobility Healthcare agreed to a non-refundable initial payment (the “Initial Payment Amount”) of $ 2,270,000 650,000 2,920,000 5,602 The Company accounts for business combinations using the acquisition method and that the Company has early adopted the amendments of Regulation S-X dated May 21, 2020 and has concluded that this acquisition was not significant. Accordingly, the presentation of the assets acquired, historical financial statements under Rule 3-05 and related pro forma information under Article 11 of Regulation S-X, respectively, are not required to be presented. Under the acquisition method, the purchase price of the Medical Billing Acquisition has been allocated to the acquired tangible and identifiable intangible assets and assumed liabilities based on their estimated fair values at the time of the Medical Billing Acquisition. This allocation involves a number of assumptions, estimates, and judgments that could materially affect the timing or amounts recognized in our financial statements. The acquisition was structured as stock purchase, therefore the excess purchase price over the fair value of net tangible assets acquired was recorded as goodwill, which will not be amortized for income tax filing purposes. The results of operations of acquired businesses are included in the consolidated financial statements from the acquisition date. The purchase price of the Medical Billing Acquisition was allocated to the tangible assets, and assumed liabilities based on their preliminary estimated fair values at the time of the Medical Billing Acquisition. The Company expects to retain the services of an independent valuation firm to determine the fair value of these identifiable intangible assets. Once determined, the Company will reallocate the purchase price of the acquisition based on the results of the independent evaluation if they are materially different from the allocations as recorded on August 31, 2021. The preliminary estimated fair value of assets acquired, and liabilities assumed in the Medical Billing Acquisition were as follows: SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION Description Amount Assets acquired: Tangible assets acquired $ 401,547 Goodwill 2,920,000 Liabilities assumed pursuant to stock purchase agreement (401,547 ) Total assets acquired and liabilities assumed $ 2,920,000 Consideration: Cash paid at acquisition date $ 2,270,000 Contingent consideration promissory note 650,000 Total acquisition purchase price $ 2,920,000 During the measurement period (which is the period required to obtain all necessary information that existed at the acquisition date, or to conclude that such information is unavailable, not to exceed one year), additional assets or liabilities may be recognized, or there could be changes to the amounts of assets or liabilities previously recognized on a preliminary basis, if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of these assets or liabilities as of that date. The change in fair value of the contingent consideration is more fully described in Note 3, “Debt Obligations”. On January 1, 2022, the Company’s revenue cycle management segment completed the acquisition of another private medical billing company (the “Medical Billing Acquisition”). In accordance with the stock purchase agreement, Nobility Healthcare agreed to a non-refundable initial payment (the “Initial Payment Amount”) of $ 1,153,626 750,000 1,903,626 7,996 The Company accounts for business combinations using the acquisition method and that the Company has early adopted the amendments of Regulation S-X dated May 21, 2020 and has concluded that this acquisition was not significant. Accordingly, the presentation of the assets acquired, historical financial statements under Rule 3-05 and related pro forma information under Article 11 of Regulation S-X, respectively, are not required to be presented. Under the acquisition method, the purchase price of the Medical Billing Acquisition has been allocated to the acquired tangible and identifiable intangible assets and assumed liabilities based on their estimated fair values at the time of the Medical Billing Acquisition. This allocation involves a number of assumptions, estimates, and judgments that could materially affect the timing or amounts recognized in our financial statements. The acquisition was structured as stock purchase, therefore the excess purchase price over the fair value of net tangible assets acquired was recorded as goodwill, which will not be amortized for income tax filing purposes. The results of operations of acquired businesses are included in the consolidated financial statements from the acquisition date. The purchase price of the Medical Billing Acquisition was allocated to the tangible assets, and assumed liabilities based on their preliminary estimated fair values at the time of the Medical Billing Acquisition. The Company expects to retain the services of an independent valuation firm to determine the fair value of these identifiable intangible assets. Once determined, the Company will reallocate the purchase price of the acquisition based on the results of the independent evaluation if they are materially different from the allocations as recorded on January 1, 2022. The preliminary estimated fair value of assets acquired, and liabilities assumed in the Medical Billing Acquisition were as follows: SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION Description Amount Assets acquired: Tangible assets acquired $ 190,631 Goodwill 2,100,000 Liabilities assumed pursuant to stock purchase agreement (387,005 ) Total assets acquired and liabilities assumed $ 1,903,626 Consideration: Cash paid at acquisition date $ 1,153,626 Contingent consideration promissory note 750,000 Total acquisition purchase price $ 1,903,626 During the measurement period (which is the period required to obtain all necessary information that existed at the acquisition date, or to conclude that such information is unavailable, not to exceed one year), additional assets or liabilities may be recognized, or there could be changes to the amounts of assets or liabilities previously recognized on a preliminary basis, if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of these assets or liabilities as of that date. The change in fair value of the contingent consideration is more fully described in Note 3, “Debt Obligations”. On February 1, 2022, the Company’s revenue cycle management segment completed an asset acquisition from another private medical billing company (the “Medical Billing Asset Acquisition”). In accordance with the asset purchase agreement, Nobility Healthcare agreed to a non-refundable initial payment (the “Initial Payment Amount”) of $ 230,000 105,000 335,000 10,322 In accordance with ASC 805, “Business Combinations”, the acquisition method of accounting is used, and recognition of the assets acquired is at fair value as of the acquisition dates. All acquisition costs were expensed as incurred. The consideration paid has been allocated to the assets acquired based on their estimated fair values at the acquisition date. The estimate of fair values for the intangible assets acquired were agreed to by both buyer and seller. The estimated fair value of intangible assets acquired in the Medical Billing Asset Acquisition were as follows: SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION Description Amount Assets acquired: Intangible assets acquired – client agreements $ 335,000 Total assets acquired and liabilities assumed $ 335,000 Consideration: Cash paid at acquisition date $ 230,000 Contingent consideration promissory note 105,000 Total acquisition purchase price $ 335,000 Definite-lived intangible assets consist of client agreements and are amortized on a straight-line basis over their ten-year estimated useful life. See Note 10. Goodwill and Other Intangible Assets. The change in fair value of the contingent consideration is more fully described in Note 3, “Debt Obligations” and will be estimated on a quarterly basis. |
TICKETSMARTER ACQUISITION
TICKETSMARTER ACQUISITION | 6 Months Ended |
Jun. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
TICKETSMARTER ACQUISITION | NOTE 18. TICKETSMARTER ACQUISITION On September 1, 2021, Digital Ally, Inc. formed TicketSmarter, Inc. (“TicketSmarter”), through which the Company completed the acquisition of Goody Tickets, LLC, a Kansas limited liability company (“Goody Tickets”) and TicketSmarter, LLC, a Kansas limited liability company (“TicketSmarter LLC”) (such acquisitions, collectively, the “TicketSmarter Acquisition”). TicketSmarter, Inc. comprises the Company’s ticketing business segment. In accordance with the stock purchase agreement, the Company agreed to an initial payment (the “Initial Payment Amount”) of $ 9,403,600 4,244,400 3,700,000 500,000 297,726 202,274 40,625 The Company accounts for business combinations using the acquisition method and that the Company has early adopted the amendments of Regulation S-X dated May 21, 2020 and has concluded that this acquisition was not significant. Accordingly, the presentation of the assets acquired, historical financial statements under Rule 3-05 and related pro forma information under Article 11 of Regulation S-X, respectively, are not required to be presented. Under the acquisition method, the purchase price of the TicketSmarter Acquisition has been allocated to Goody Tickets’ and TicketSmarter LLC’s acquired tangible and identifiable intangible assets and assumed liabilities based on their estimated fair values at the time of the TicketSmarter Acquisition. This allocation involves a number of assumptions, estimates, and judgments that could materially affect the timing or amounts recognized in our financial statements. The TicketSmarter Acquisition was structured as a stock purchase; however the parties agreed to coordinate the election to invoke IRS Section 338(h)(10) relative to this transaction for tax purposes. Therefore, the excess purchase price over the fair value of net tangible assets acquired was recorded as goodwill, which will be amortized over 15 years for income tax filing purposes. Likewise, the other acquired assets were stepped up to fair value and is deductible for income tax purposes. The results of operations of acquired businesses are included in the consolidated financial statements from the acquisition date. The purchase price of the TicketSmarter Acquisition was allocated to Goody Tickets’ and TicketSmarter LLC’s tangible assets, goodwill, identifiable intangible assets, and assumed liabilities based on their preliminary estimated fair values at the time of the TicketSmarter Acquisition. The Company retained the services of an independent valuation firm to determine the fair value of these identifiable intangible assets. The Company will continue to evaluate the fair value of the identified intangible assets. The preliminary estimated fair value of assets acquired, and liabilities assumed in the TicketSmarter Acquisition were as follows: SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED ACQUISITION Preliminary purchase price allocation As allocated As allocated Description September 30, December 31, 2021 Assets acquired: Tangible assets acquired, including $ 51,432 $ 7,139,930 $ 5,748,291 Identifiable intangible assets acquired — 6,800,000 Goodwill 11,839,308 5,886,547 Liabilities assumed (5,128,964 ) (5,128,964 ) Net assets acquired and liabilities assumed $ 13,850,274 $ 13,305,874 Consideration: Cash paid at TicketSmarter Acquisition date $ 8,413,240 $ 8,413,240 Common stock issued as consideration for TicketSmarter Acquisition at date of acquisition 990,360 990,360 Contingent consideration earn-out agreement 4,244,400 3,700,000 Cash paid at closing to escrow amount 500,000 500,000 Cash retained from escrow amount pursuant to settlement of working capital target (297,726 ) (297,726 ) Total TicketSmarter Acquisition purchase price $ 13,850,274 $ 13,305,874 The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives in years as of the date of acquisition: SCHEDULE OF COMPONENTS OF IDENTIFIABLE INTANGIBLE ASSETS ACQUIRED AND ESTIMATED USEFUL LIVES Cost Amortization through Estimated useful life Identifiable intangible assets: Trademarks $ 600,000 $ — indefinite Sponsorship agreement network 5,600,000 933,333 5 Search engine optimization/content 600,000 125,000 4 $ 6,800,000 $ 1,058,333 For the period from the date of the TicketSmarter Acquisition to December 31, 2021, the Company adjusted its preliminary fair value estimates and estimated useful lives based upon information obtained through December 31, 2021, which resulted in adjustments to the preliminary allocation of the purchase price. These adjustments primarily related to estimated identifiable intangible asset fair values (primarily related to the sponsorship agreement network), the estimated fair value of the contingent earn-out agreement liability and goodwill. There were no adjustments to the allocation of the purchase price during the three and six months ended June 30, 2022. During the measurement period (which is the period required to obtain all necessary information that existed at the acquisition date, or to conclude that such information is unavailable, not to exceed one year), additional assets or liabilities may be recognized, or there could be changes to the amounts of assets or liabilities previously recognized on a preliminary basis, if new information is obtained about facts and circumstances that existed as of the acquisition date that, if known, would have resulted in the recognition of these assets or liabilities as of that date. The change in fair value of the contingent consideration is more fully described in Note 3, “Debt Obligations”. |
SEGMENT DATA
SEGMENT DATA | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
SEGMENT DATA | NOTE 19. 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 Ticketing, each of which has specific personnel responsible for that business and reports to the CODM. Corporate expenses capture the Company’s corporate administrative activities, and are 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 it 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 Ticketing 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 June 30, 2022, and June 30, 2021: SCHEDULE OF SEGMENT REPORTING 2022 2021 1 2 Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Net Revenues: Video Solutions $ 2,049,756 $ 2,493,671 $ 4,059,805 $ 5,029,501 Revenue Cycle Management 2,120,738 — 4,024,695 — Ticketing 5,180,963 — 11,561,738 — Total Net Revenues $ 9,351,457 $ 2,493,671 $ 19,646,238 $ 5,029,501 Gross Profit: Video Solutions $ 759,010 $ 1,260,800 $ 1,027,440 $ 2,072,683 Revenue Cycle Management 957,263 — 1,654,432 — Ticketing 2,805 — 976,824 — Total Gross Profit $ 1,719,078 $ 1,260,800 $ 3,658,696 $ 2,072,683 Operating Income (loss): Video Solutions $ (1,130,749 ) $ (296,601 ) $ (2,846,004 ) $ (979,520 ) Revenue Cycle Management 247,301 — 118,783 — Ticketing (2,320,694 ) — (3,766,541 ) — Corporate (3,457,110 ) (2,320,283 ) (6,970,828 ) (4,503,058 ) Total Operating Income (Loss) $ (6,661,252 ) $ (2,616,884 ) $ (13,464,590 ) $ (5,482,578 ) Depreciation and Amortization: Video Solutions $ 209,442 $ 87,830 $ 385,516 $ 145,459 Revenue Cycle Management 319,175 — 638,358 — Ticketing 218 — 364 — Total Depreciation and Amortization $ 528,835 $ 87,830 $ 1,024,238 $ 145,459 June 30, 2022 December 31, 2021 Assets (net of eliminations): Video Solutions $ 35,219,240 $ 25,983,348 Revenue Cycle Management 1,678,775 934,095 Ticketing 10,097,319 12,260,780 Corporate 23,733,487 43,810,974 Total Identifiable Assets $ 70,728,821 $ 82,989,197 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 $ 3,272,831 449,635 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. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 20. RELATED PARTY TRANSACTIONS Transactions with Managing Member of Nobility Healthcare On January 27, 2022, the Board of Directors appointed Christian J. Hoffmann, III as a member of the Board, effective immediately. Mr. Hoffmann is a principal owner and manager of Nobility, LLC which is currently the managing member of our consolidated subsidiary Nobility Healthcare, LLC. Nobility, LLC is currently the managing member of Nobility Healthcare, LLC. The Company has advanced a total of $ 158,384 138,384 15,692 On August 1, 2022, Mr. Hoffmann resigned as a member of the Board, effective immediately. He remains as a principal owner and manager of Nobility, LLC which is currently the managing member of our consolidated subsidiary Nobility Healthcare, LLC. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 21. SUBSEQUENT EVENTS Notice of Delisting On July 7, 2022, Digital Ally, Inc., a Nevada Corporation (the “Company”), received a written notification (the “Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it was not in compliance with the minimum bid price requirement for continued listing on the Nasdaq Capital Market, as set forth under Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”), because the closing bid price of the Company’s common stock, par value $ 0.001 1.00 Pursuant to Nasdaq Listing Rule 5810(c)(3)(A), the Company has been granted 180 calendar days from the date of the Notice, or until January 3, 2023 (the “Compliance Period”), to regain compliance with the Minimum Bid Price Requirement. If at any time during the Compliance Period, the bid price of the Common Stock closes at or above $ 1.00 In the event the Company does not regain compliance with the Minimum Bid Price Requirement by January 3, 2023, the Company may be eligible for an additional 180-calendar day grace period. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the Minimum Bid Price Requirement, and will need to provide written notice to Nasdaq of its intent to regain compliance with such requirement during such second compliance period. If the Company does not regain compliance within the allotted compliance period(s), including any extensions that may be granted by Nasdaq, Nasdaq will provide notice that the Common Stock will be subject to delisting from the Nasdaq Capital Market. Resignation of a Member of Board of Directors On August 1, 2022, Mr. Hoffmann resigned as a member of the Board, effective immediately. He remains as a principal owner and manager of Nobility, LLC which is currently the managing member of our consolidated subsidiary Nobility Healthcare, LLC. |
NATURE OF BUSINESS AND SUMMAR_2
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations: | Nature of Operations: Digital Ally, Inc. was originally incorporated in Nevada on December 13, 2000 as Vegas Petra, Inc. and had no operations until 2004. On November 30, 2004, Vegas Petra, Inc. entered into a Plan of Merger with Digital Ally, Inc., at which time the merged entity was renamed Digital Ally, Inc. The business of Digital Ally, Inc. (with its wholly-owned subsidiaries, Digital Ally International, Inc., Shield Products, LLC, Digital Ally Healthcare, LLC, TicketSmarter, Inc., Worldwide Reinsurance, Ltd., Digital Connect, Inc., Kustom 440, Inc., and its majority-owned subsidiary Nobility Healthcare, LLC, collectively, “Digital Ally,” “Digital,” and the “Company”) is divided into three reportable operating segments: 1) the Video Solutions Segment, 2) the Revenue Cycle Management Segment and 3) the Ticketing Segment. The Video Solutions Segment is our legacy business that produces digital video imaging, storage products, disinfectant and related safety products for use in law enforcement, security and commercial applications. 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 Ticketing 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 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. Such required segment information is included in Note 18. |
Basis of Presentation: | Basis of Presentation: The unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022. The balance sheet at December 31, 2021 has been derived from the audited financial statements at that date, but does not include all the information and footnotes required by generally accepted accounting principles in the United States for complete financial statements. For further information, refer to the audited financial statements and footnotes included in the Company’s annual report on Form 10-K for the year ended December 31, 2021. |
COVID-19 pandemic/Supply Chain: | COVID-19 pandemic/Supply Chain: The COVID-19 pandemic continues to represent an evolving and fluid situation that presents a wide range of potential impacts of varying durations for different global geographies, including locations where the Company has offices, employees, customers, vendors and other suppliers and business partners. Like most U.S.-based businesses, the COVID-19 pandemic and efforts to mitigate the same began to have impacts on our business in March 2020. Since that time, although the original effect of the COVID-19 pandemic has eased, we have continued to operate in an uncertain economic environment that is characterized by, business slowdowns or shutdowns, labor shortages, supply chain challenges, changes in government spending and requirements, regulatory challenges, inflationary pressures and market volatility. We continue to experience operational challenges as a result of worldwide events including the Russia-Ukraine conflict, continued uncertainty associated with the pandemic, and volatility in global markets, which are compounded by the complex integrated global supply chain for both vendors and customers. As the COVID-19 pandemic dissipates at varying times and rates in different regions around the world, there could be a prolonged negative impact on these global supply chains. Our ability to continue operations at specific facilities will be impacted by the interdependencies of the various participants of these global supply chains, which are largely beyond our direct control. A prolonged shut down of these global supply chains could have a material adverse effect on our business, results of operations, cash flows and financial condition. If our suppliers have increased challenges with their workforce (including as a result of illness, absenteeism, reactions to health and safety or government requirements), facility closures, timely access to necessary components, materials and other supplies at reasonable prices, access to capital, and access to fundamental support services (such as shipping and transportation), they may be unable to provide the agreed-upon goods and services in a timely, compliant and cost-effective manner. We have incurred and may in the future incur additional costs and delays in our business resulting from the COVID-19 pandemic, including as a result of higher prices, schedule delays or the need to identify and develop alternative suppliers. In some instances, we may be unable to identify and develop alternative suppliers, incurring additional liabilities under our current contracts and hampering new ones. Our customers have experienced, and may continue to experience, disruptions in their operations and supply chains as a result of the COVID-19 pandemic, which can result in delayed, reduced, or canceled orders, or collection risks, and which may adversely affect our results of operations. Similarly, current, and future restrictions or disruptions of transportation, such as reduced availability of air transport, port closures or delays, and increased border controls, delays or closures, can also impact our ability to meet demand and could materially adversely affect us. The spread of COVID-19 caused us to modify our business practices (including employee travel, employee work locations, cancellation of physical participation in meetings, events and conferences, and social distancing measures). To date, we eased many of these modifications. However, we may, in the future, reinstitute the same or similar changes or take further actions as may be required by government authorities or that we determine are in the best interests of our employees, customers, partners, vendors, and suppliers. Although we managed to continue most of our operations, the future course of the COVID-19 pandemic is uncertain and we cannot assure that this global pandemic, including its economic impact, will not have a material adverse impact on our business, financial position, results of operations and/or cash flows. |
Basis of Consolidation: | Basis of Consolidation: The accompanying financial statements include the consolidated accounts of Digital Ally, its wholly-owned subsidiaries, Digital Ally International, Inc., Shield Products, LLC, Digital Ally Healthcare, LLC, TicketSmarter, Inc., Worldwide Reinsurance, Ltd., Digital Connect, Inc., Kustom 440, Inc., and its majority-owned subsidiary Nobility Healthcare, LLC. All intercompany balances and transactions have been eliminated during consolidation. The Company formed Digital Ally International, Inc. during August 2009 to facilitate the export sales of its products. The Company formed Shield Products, LLC in May 2020 to facilitate the sales of its Shield™ line of disinfectant/cleanser products and ThermoVu® line of temperature monitoring equipment. The Company formed Nobility Healthcare, LLC in June 2021 to facilitate the operations of its revenue cycle management solutions and back-office services for healthcare organizations. Lastly, the Company formed TicketSmarter, Inc. upon its acquisition of Goody Tickets, LLC and TicketSmarter, LLC, to facilitate its global ticketing operations. The Company formed Worldwide Reinsurance Ltd., which is a captive insurance company domiciled in Bermuda. It will provide primarily liability insurance coverage to the Company for which insurance may not be currently available or economically feasible in today’s insurance marketplace. The Company formed Digital Connect, Inc. for travel and transportation purposes in 2022. The company formed Kustom 440, Inc. in 2022 to create unique entertainment experiences directly for consumers. |
Fair Value of Financial Instruments: | Fair Value of Financial Instruments: The carrying amounts of financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and subordinated notes payable approximate fair value because of the short-term nature of these items. |
Revenue Recognition: | Revenue Recognition: The Company applies the provisions of Accounting Standards Codification (ASC) 606-10, Revenue from Contracts with Customers The Company has two different revenue streams, product and service, represented through its three segments. The Company reports all revenues on a gross basis, other than service revenues from the Company’s ticketing and revenue cycle management segments. Revenues generated by all segments are reported net of sales taxes. Video Solutions The Company considers customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with the customer. In situations where sales are to a distributor, the Company had concluded its contracts are with the distributor as the Company holds a contract bearing enforceable rights and obligations only with the distributor. As part of its consideration for the contract, the Company evaluates certain factors including the customers’ ability to pay (or credit risk). For each contract, the Company considers the promise to transfer products, each of which is distinct, to be the identified performance obligations. In determining the transaction price, the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which it expects to be entitled. As the Company’s standard payment terms are less than one year, it has elected the practical expedient under ASC 606-10-32-18 to not assess whether a contract has a significant financing component. The Company allocates the transaction price to each distinct product based on its relative standalone selling price. The product price as specified on the purchase order is considered the standalone selling price as it is an observable input which depicts the price as if sold to a similar customer in similar circumstances. Revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligations are satisfied), which typically occurs at shipment. Further in determining whether control has been transferred, the Company considers if there is a present right to payment and legal title, along with risks and rewards of ownership having transferred to the customer. Customers do not have a right to return the product other than for warranty reasons for which they would only receive repair services or replacement product. The Company has also elected the practical expedient under ASC 340-40-25-4 to expense commissions for product sales when incurred as the amortization period of the commission asset the Company would have otherwise recognized is less than one year. Service and other revenue is comprised of revenues from extended warranties, repair services, cloud revenue and software revenue. Revenue is recognized upon shipment of the product and acceptance of the service or materials by the end customer for repair services. Revenue for extended warranty, cloud service or other software-based products is over the term of the contract warranty or service period. A time-elapsed method is used to measure progress because the Company transfers control evenly over the contractual period. Accordingly, the fixed consideration related to these revenues is generally recognized on a straight-line basis over the contract term, as long as the other revenue recognition criteria have been met. The Company’s multiple performance obligations may include future in-car or body-worn camera devices to be delivered at defined points within a multi-year contract, and in those arrangements, the Company allocates total arrangement consideration over the life of the multi-year contract to future deliverables using management’s best estimate of selling price. Revenue Cycle Management The Company reports revenue cycle management revenues on a net basis, as its primary source of revenue is its end-to-end service fees which are generally determined as a percentage of the invoice amounts collected. These service fees are reported as revenue monthly upon completion of the Company’s performance obligation to provide the agreed upon service. Ticketing The Company reports ticketing revenue on a gross or net basis based on management’s assessment of whether the Company is acting as a principal or agent in the transaction. The determination is based upon the evaluation of control over the event ticket, including the right to sell the ticket, prior to its transfer to the ticket buyer. The Company sells tickets held in inventory, which consists of one performance obligation, being to transfer control of an event ticket to the buyer upon confirmation of the order. The Company acts as the principal in these transactions, as the ticket is owned by the Company at the time of sale, therefore controlling the ticket prior to transferring to the customer. In these transactions, revenue is recorded on a gross basis based on the value of the ticket and is recognized when an order is confirmed. Payment is typically due upon delivery of the ticket. The Company also acts as an intermediary between buyers and sellers through the online secondary marketplace. Revenues derived from this marketplace primarily consist of service fees from ticketing operations, and consists of one primary performance obligation, which is facilitating the transaction between the buyer and seller, being satisfied at the time the order has been confirmed. As the Company does not control the ticket prior to the transfer, the Company acts as an agent in these transactions. Revenue is recognized on a net basis, net of the amount due to the seller when an order is confirmed. The seller is then obligated to deliver the tickets to the buyer per the seller’s listing, and payment is due at the time of sale. Other Contract liabilities consist of deferred revenue and include payments received in advance of performance under the contract and are reported separately as current liabilities and non-current liabilities in the Consolidated Balance Sheets. Such amounts consist of extended warranty contracts, prepaid cloud services and prepaid installation services and are generally recognized as the respective performance obligations are satisfied. During the three months ended June 30, 2022, the Company recognized revenue of $ 0.4 SCHEDULE OF CONTRACT LIABILITIES December 31, 2021 Additions/Reclass Recognized Revenue June 30, 2022 Contract liabilities, current $ 1,665,519 $ 611,938 $ 333,075 $ 1,944,382 Contract liabilities, non-current 2,687,786 2,174,949 775,309 4,087,426 $ 4,353,305 $ 2,786,887 $ 1,108,384 $ 6,031,808 Sales returns and allowances aggregated $ 117,552 45,298 |
Use of Estimates: | Use of Estimates: The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Management utilizes various other estimates, including but not limited to, determining the estimated lives of long-lived assets, determining the potential impairment of long-lived assets, the fair value of warrants, options, the recognition of revenue, inventory valuation reserve, fair value of assets and liabilities acquired in a business combination, incremental borrowing rate on leases, the valuation allowance for deferred tax assets and other legal claims and contingencies. The results of any changes in accounting estimates are reflected in the financial statements in the period in which the changes become evident. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period that they are determined to be necessary. |
Cash and cash equivalents: | Cash and cash equivalents: Cash and cash equivalents include funds on hand, in bank and short-term investments with original maturities of ninety (90) days or less. SCHEDULE OF SHORT TERM INVESTMENTS June 30, 2022 Adjusted Cost Realized Gains Realized Losses Fair Value Demand deposits $ 5,841,857 $ — $ — $ 5,841,857 Short-term investments with original maturities of 90 days or less (Level 1): Money market funds 7,612,389 — — 7,612,389 $ 13,454,246 $ — $ — $ 13,454,246 December 31, 2021 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Demand deposits $ 5,031,246 $ — $ — $ 5,031,246 Short-term investments with original maturities of 90 days or less (Level 1): Money market funds 14,928,526 — — 14,928,526 Mutual funds 12,079,901 — (31,881 ) 12,048,020 $ 32,039,673 $ — $ (31,881 ) $ 32,007,792 The Company maintains its cash and cash equivalents in banks insured by the Federal Deposit Insurance Corporation (FDIC) in accounts that at times may be in excess of the federally insured limit of $ 250,000 11,682,011 29,836,142 |
Accounts Receivable: | Accounts Receivable: Accounts receivable are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a weekly basis. The Company determines the allowance for doubtful accounts by regularly evaluating individual customer receivables and considering a customer’s financial condition, credit history, and current economic conditions. Trade receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded when received. A trade receivable is considered to be past due if any portion of the receivable balance is outstanding for more than thirty (30) days beyond terms. No interest is charged on overdue trade receivables. |
Goodwill and Other Intangibles: | Goodwill and Other Intangibles: Goodwill Business Combinations Intangibles - Goodwill and Other Goodwill impairment testing is performed at the reporting unit level. Goodwill is assigned to reporting units at the date the goodwill is initially recorded. Once goodwill has been assigned to reporting units, it no longer retains its association with a particular acquisition, and all of the activities within a reporting unit, whether acquired or internally generated, are available to support the value of the goodwill. Traditionally, goodwill impairment testing is a two-step process. Step one involves comparing the fair value of the reporting units to its carrying amount. If the carrying amount of a reporting unit is greater than zero and its fair value is greater than its carrying amount, there is no impairment. If the reporting unit’s carrying amount is greater than the fair value, the second step must be completed to measure the amount of impairment, if any. Step two involves calculating an implied fair value of goodwill. The Company has adopted ASU 2017-04 which simplifies subsequent goodwill measurement by eliminating step two from the goodwill impairment test. As a result, the Company compares the fair value of a reporting unit with its respective carrying value and recognized an impairment charge for the amount by which the carrying amount exceeded the reporting unit’s fair value. The Company determines the fair value of its reporting units using an income approach. Under the income approach, the Company determined fair value based on estimated discounted future cash flows of each reporting unit. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates and EBITDA margins, discount rates and future market conditions, among others. Long-lived and Other Intangible Assets - Accounting for the Impairment or Disposal of Long-lived Assets Factors considered by the Company include, but are not limited to, significant underperformance relative to historical or projected operating results; significant changes in the manner of use of the acquired assets or the strategy for the overall business; and significant negative industry or economic trends. When the carrying value of a long-lived asset may not be recoverable based upon the existence of one or more of the above indicators of impairment, the Company estimates the future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future undiscounted cash flows and eventual disposition is less than the carrying amount of the asset, the Company recognizes an impairment loss. An impairment loss is reflected as the amount by which the carrying amount of the asset exceeds the fair value of the asset, based on the fair value if available, or discounted cash flows, if fair value is not available. The Company last assessed potential impairments of its long-lived assets as of June 30, 2022 and concluded that there was no impairment. Intangible assets include deferred patent costs and license agreements. Legal expenses incurred in preparation of patent application have been deferred and will be amortized over the useful life of granted patents. Costs incurred in preparation of applications that are not granted will be charged to expense at that time. The Company has entered into several sublicense agreements under which it has been assigned the exclusive rights to certain licensed materials used in its products. These sublicense agreements generally require upfront payments to obtain the exclusive rights to such material. The Company capitalizes the upfront payments as intangible assets and amortizes such costs over their estimated useful life on a straight-line method. |
Segment Reporting | Segment Reporting 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 |
Contingent Consideration | Contingent Consideration In circumstances where an acquisition involves a contingent consideration arrangement that meets the definition of a liability under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity, the Company recognizes a liability equal to the fair value of the contingent payments the Company expects to make as of the acquisition date. The Company remeasures this liability each reporting period and records changes in the fair value through the consolidated statement of operations. |
Repurchase and Cancellation of Shares | Repurchase and Cancellation of Shares From time to time, the Company’s Board of Directors (the “Board”) may authorize share repurchases of common stock. Shares repurchased under Board authorizations are held in treasury for general corporate purposes and cancelled when it is determined appropriate by management. The Company accounts for repurchases of common stock under the cost method. Shares repurchased and cancelled during the period were recorded as a reduction to stockholders’ (deficit) equity. See further discussion of the Company’s share repurchase program in Note 15 –Stockholders’ Equity. |
Non-Controlling Interests | Non-Controlling Interests Non-controlling interests in the Company’s Consolidated Financial Statements represents the interest in subsidiaries held by our venture partner. The venture partner holds a noncontrolling interests in the Company’s consolidated subsidiary Nobility Healthcare, LLC. Since the Company consolidates the financial statements of all wholly-owned and majority owned subsidiaries, the noncontrolling owners’ share of each subsidiary’s results of operations are deducted and reported as net income or loss attributable to noncontrolling interest in the Consolidated Statements of Operations. |
New Accounting Standards | New Accounting Standards In 2020, FASB issued ASU No. 2020-06 to simplify the accounting for convertible debt instruments as the current accounting guidance was determined to be unnecessarily complex and difficult to navigate. The ASU primarily does three things: (1) The ASU eliminates the beneficial conversion feature model and the cash conversion model. The elimination of these models will result in more convertible instruments (convertible debt instruments or convertible preferred stock instruments) being reported as a single liability instrument. The ASU also makes targeted improvements to the related disclosures, (2) The ASU eliminates certain settlement conditions that are required to qualify for derivative scope exception which will allow for less equity contracts to be accounted for as a derivative and (3) The ASU aligns the diluted EPS calculation for convertible instruments by requiring the use of the if-converted method and requiring share settlement be included in the calculation when the contract includes an option of cash or share settlement. ASU No. 2020-06 is effective for fiscal years beginning after December 15, 2021 with early adoption permitted for fiscal years beginning after December 15, 2020. The adoption of this standard did not have a significant impact on the Company’s financial position and results of operations. In 2020, FASB issued ASU No. 2020-01 which represents a consensus of the Emerging Issues Task Force and it clarifies certain items related to ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The ASU (1) clarifies that when an entity is either applying the equity method or upon discontinuing the equity method it should consider observable price changes in orderly transactions for the identical or a similar investment with the same issuer for valuing basis of the investment and (2) clarifies that when determining the accounting for certain forward contracts and purchased options an entity should not consider, whether upon settlement or exercise, if the underlying securities would be accounted for under the equity method or fair value option. ASU No. 2020-01 is effective for fiscal years beginning after December 15, 2020 with early adoption permitted. The Company adopted this update for the quarter ended March 31, 2021. The adoption of this standard did not have a significant impact on the Company’s financial position and results of operations. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes - simplifying the accounting for income taxes (Topic 740), which is meant to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. The amendment also improves consistent application and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The adoption of this standard did not have a significant impact on the Company’s financial position and results of operations. In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses” to improve information on credit losses for financial assets and net investment in leases that are not accounted for at fair value through net income. ASU 2016-13 replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses. In April 2019 and May 2019, the FASB issued ASU No. 2019-04, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” and ASU No. 2019-05, “Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief” which provided additional implementation guidance on the previously issued ASU. In November 2019, the FASB issued ASU 2019-10, “Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842),” which defers the effective date for public filers that are considered small reporting companies (“SRC”) as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company will continue to evaluate the effect of adopting ASU 2016-13 will have on the Company’s consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangible-Goodwill and Other Internal-Use Software (Subtopic 350-40) In December 2019, the FASB issued ASU No. 2019-12, Income Taxes - simplifying the accounting for income taxes (Topic 740), which is meant to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes. The amendment also improves consistent application and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The amendments in ASU 2019-12 are effective for public business entities for fiscal years beginning after Dec. 15, 2020. |
NATURE OF BUSINESS AND SUMMAR_3
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SCHEDULE OF CONTRACT LIABILITIES | SCHEDULE OF CONTRACT LIABILITIES December 31, 2021 Additions/Reclass Recognized Revenue June 30, 2022 Contract liabilities, current $ 1,665,519 $ 611,938 $ 333,075 $ 1,944,382 Contract liabilities, non-current 2,687,786 2,174,949 775,309 4,087,426 $ 4,353,305 $ 2,786,887 $ 1,108,384 $ 6,031,808 |
SCHEDULE OF SHORT TERM INVESTMENTS | SCHEDULE OF SHORT TERM INVESTMENTS June 30, 2022 Adjusted Cost Realized Gains Realized Losses Fair Value Demand deposits $ 5,841,857 $ — $ — $ 5,841,857 Short-term investments with original maturities of 90 days or less (Level 1): Money market funds 7,612,389 — — 7,612,389 $ 13,454,246 $ — $ — $ 13,454,246 December 31, 2021 Adjusted Cost Unrealized Gains Unrealized Losses Fair Value Demand deposits $ 5,031,246 $ — $ — $ 5,031,246 Short-term investments with original maturities of 90 days or less (Level 1): Money market funds 14,928,526 — — 14,928,526 Mutual funds 12,079,901 — (31,881 ) 12,048,020 $ 32,039,673 $ — $ (31,881 ) $ 32,007,792 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORIES | Inventories consisted of the following at June 30, 2022 and December 31, 2021: SCHEDULE OF INVENTORIES June 30, 2022 December 31, 2021 Raw material and component parts– video solutions segment $ 4,083,713 $ 3,062,046 Work-in-process– video solutions segment 153 — Finished goods – video solutions segment 7,866,087 8,410,307 Finished goods – ticketing segment 1,178,468 2,102,272 Subtotal 13,128,421 13,574,625 Reserve for excess and obsolete inventory– video solutions segment (3,272,832 ) (3,353,458 ) Reserve for excess and obsolete inventory – ticketing segment (449,635 ) (561,631 ) Total inventories $ 9,405,954 $ 9,659,536 |
DEBT OBLIGATIONS (Tables)
DEBT OBLIGATIONS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
SUMMARY OF DEBT OBLIGATIONS | Debt obligations is comprised of the following: SUMMARY OF DEBT OBLIGATIONS June 30, 2022 December 31, 2021 Economic injury disaster loan (EIDL) $ 150,000 $ 150,000 Contingent consideration promissory note – Nobility Healthcare Division Acquisition 211,867 317,212 Contingent consideration promissory note – Nobility Healthcare Division Acquisition 426,326 650,000 Contingent consideration promissory note – Nobility Healthcare Division Acquisition 481,151 — Contingent consideration promissory note – Nobility Healthcare Division Acquisition — — Debt obligations 1,269,344 1,117,212 Less: current maturities of debt obligations 514,664 389,934 Debt obligations, long-term $ 754,680 $ 727,278 |
SCHEDULE OF MATURITY OF DEBT OBLIGATIONS | Debt obligations mature as follows as of June 30, 2022: SCHEDULE OF MATURITY OF DEBT OBLIGATIONS June 30, 2022 2022 (July 1, 2022 to December 31, 2022) $ 257,317 2023 514,722 2024 355,295 2025 3,412 2026 3,542 2027 and thereafter 135,056 Total $ 1,269,344 |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS | The following table represents the Company’s hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of June 30, 2022 and December 31, 2021: SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS Level 1 Level 2 Level 3 Total June 30, 2022 Level 1 Level 2 Level 3 Total Liabilities: Warrant derivative liabilities $ — $ — $ 9,285,143 $ 9,285,143 Contingent consideration promissory notes — — 1,119,344 1,119,344 Liabilities, fair value $ — $ — $ 10,404,487 $ 10,404,487 Level 1 Level 2 Level 3 Total December 31, 2021 Level 1 Level 2 Level 3 Total Liabilities: Warrant derivative liabilities $ — $ — $ 14,846,932 $ 14,846,932 Contingent consideration promissory notes and contingent consideration earn-out agreement — — 967,212 967,212 Liabilities, fair value $ — $ — $ 15,814,144 $ 15,814,144 |
SCHEDULE OF FAIR VALUE MEASUREMENTS CHANGE IN LEVEL 3 INPUTS | The following table represents the change in Level 3 tier value measurements for the periods ended June 30, 2022: SCHEDULE OF FAIR VALUE MEASUREMENTS CHANGE IN LEVEL 3 INPUTS Contingent Consideration Promissory Notes Warrant Derivative Liabilities Balance, December 31, 2021 $ 967,212 $ 14,846,932 Issuance of contingent consideration promissory note - Revenue Cycle Management Segment Acquisition 750,000 — Issuance of contingent consideration promissory note - Revenue Cycle Management Segment Acquisition 105,000 — Principal payments on contingent consideration promissory notes – Revenue Cycle Management Acquisitions (116,198 ) — Change in fair value of contingent consideration promissory notes - Revenue Cycle Management Acquisitions 56,050 — Change in fair value of warrant derivative liabilities — (148,171 ) Balance, March 31, 2022 $ 1,762,064 $ 14,698,761 Principal payments on contingent consideration promissory notes – Revenue Cycle Management Acquisitions (100,624 ) — Change in fair value of contingent consideration promissory notes - Revenue Cycle Management Acquisitions (542,096 ) — Change in fair value of warrant derivative liabilities — (5,413,618 ) Balance, June 30, 2022 $ 1,119,344 $ 9,285,143 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCRUED EXPENSES | Accrued expenses consisted of the following at June 30, 2022 and December 31, 2021: SCHEDULE OF ACCRUED EXPENSES June 30, December 31, Accrued warranty expense $ 16,389 $ 13,742 Accrued litigation costs 247,984 250,000 Accrued sales commissions 48,000 30,213 Accrued payroll and related fringes 461,189 453,858 Accrued sales returns and allowances 117,552 45,298 Accrued taxes 104,506 180,486 Other 135,117 202,401 Total accrued expenses $ 1,130,737 $ 1,175,998 |
SCHEDULE OF ACCRUED WARRANTY EXPENSE | Accrued warranty expense was comprised of the following for the six months ended June 30, 2022: SCHEDULE OF ACCRUED WARRANTY EXPENSE Beginning balance $ 13,742 Provision for warranty expense 41,166 Charges applied to warranty reserve (38,519 ) Ending balance $ 16,389 |
PREPAID EXPENSES (Tables)
PREPAID EXPENSES (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Prepaid Expenses | |
SCHEDULE OF PREPAID EXPENSE | Prepaid expenses were the following at June 30, 2022 and December 31, 2021: SCHEDULE OF PREPAID EXPENSE June 30, December 31, Prepaid inventory $ 6,710,710 $ 6,546,100 Prepaid advertising 657,831 2,455,527 Other 542,894 727,155 Total prepaid expenses $ 7,911,435 $ 9,728,782 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT | Property, plant and equipment consisted of the following at June 30, 2022 and December 31, 2021: SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT Estimated June 30, December 31, Building 30 $ 4,909,478 $ 4,909,478 Land — 789,734 789,734 Office furniture, fixtures and equipment 3 20 2,013,281 493,652 Warehouse and production equipment 3 5 78,321 65,948 Demonstration and tradeshow equipment 2 5 131,838 82,337 Building improvements 2 15 1,253,937 911,940 Rental equipment 1 3 8,584 8,584 Total cost 9,185,173 7,261,673 Less: accumulated depreciation and amortization (727,974 ) (420,647 ) Net property, plant and equipment $ 8,457,199 $ 6,841,026 |
OPERATING LEASE (Tables)
OPERATING LEASE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Operating Lease | |
SCHEDULE OF OPERATING LEASES RIGHT OF USE ASSETS AND LIABILITIES | The following sets forth the operating lease right of use assets and liabilities as of June 30, 2022: SCHEDULE OF OPERATING LEASES RIGHT OF USE ASSETS AND LIABILITIES Assets: Operating lease right of use assets $ 951,928 Liabilities: Operating lease obligations-current portion $ 353,646 Operating lease obligations-less current portion 666,477 Total operating lease obligations $ 1,020,123 |
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS | Following are the minimum lease payments for each year and in total: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS Year ending December 31: 2022 (July 1, to December 31, 2022) $ 250,285 2023 305,627 2024 245,761 2025 196,462 Thereafter 175,113 Total undiscounted minimum future lease payments 1,173,248 Imputed interest (153,125 ) Total operating lease liability $ 1,020,123 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS | Intangible assets consisted of the following at June 30, 2022 and December 31, 2021: SCHEDULE OF INTANGIBLE ASSETS June 30, 2022 December 31, 2021 Gross Accumulated Net Gross Accumulated Net Amortized intangible assets: Licenses (video solutions segment) $ 194,286 $ 73,866 $ 120,420 $ 194,286 $ 65,578 $ 128,708 Patents and trademarks (video solutions segment) 493,945 303,485 190,460 493,945 233,471 260,474 Sponsorship agreement network (ticketing segment) 5,600,000 933,333 4,666,667 5,600,000 373,333 5,226,667 SEO content (ticketing segment) 600,000 125,000 475,000 600,000 50,000 550,000 Personal seat licenses (ticketing 201,931 5,583 196,348 201,931 2,244 199,687 Client agreements (revenue cycle management segments) 792,079 — 792,079 — — — 7,882,241 1,441,267 6,440,974 7,090,162 724,626 6,365,536 Indefinite life intangible assets: Goodwill (ticketing and revenue cycle management segments) 11,574,468 — 11,574,468 9,931,547 — 9,931,547 Trade name (ticketing segment) 600,000 — 600,000 600,000 — 600,000 Patents and trademarks pending 60,027 — 60,027 5,430 — 5,430 Total $ 20,116,736 $ 1,441,267 $ 18,675,469 $ 17,627,139 $ 724,626 $ 16,902,513 |
SCHEDULE OF ESTIMATED AMORTIZATION FOR INTANGIBLE ASSETS | SCHEDULE OF ESTIMATED AMORTIZATION FOR INTANGIBLE ASSETS Year ending December 31: 2022 (July 1, to December 31, 2022) $ 813,792 2023 1,448,622 2024 1,398,065 2025 1,311,958 2026 and thereafter 1,468,537 Total $ 6,440,974 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
SCHEDULE OF OTHER ASSETS | Other assets were the following at June 30, 2022 and December 31, 2021: SCHEDULE OF OTHER ASSETS June 30, December 31, Lease receivable $ 3,337,608 $ 1,921,021 Sponsorship network 3,337,465 30,752 Other 232,208 155,526 Total other assets $ 6,907,281 $ 2,107,299 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
SUMMARY OF STOCK OPTIONS OUTSTANDING | A summary of all stock option activity under the Plans for the six months ended June 30, 2022 is as follows: SUMMARY OF STOCK OPTIONS OUTSTANDING Options Number of Shares Weighted Average Exercise Price Outstanding at December 31, 2021 1,086,063 $ 2.37 Granted 25,000 0.98 Exercised — — Forfeited (23,750 ) (4.33 ) Outstanding at June 30, 2022 1,087,313 $ 2.30 Exercisable at June 30, 2022 999,813 $ 2.36 |
SCHEDULE OF FAIR VALUE OF STOCK OPTIONS ASSUMPTION | SCHEDULE OF FAIR VALUE OF STOCK OPTIONS ASSUMPTION Volatility – range 111.67 % Risk-free rate 1.8 % Contractual term 10.0 Exercise price $ 0.98 |
SCHEDULE OF SHARES AUTHORIZED UNDER STOCK OPTION PLANS BY EXERCISE PRICE RANGE | The following table summarizes the range of exercise prices and weighted average remaining contractual life for outstanding and exercisable options under the Company’s option plans as of June 30, 2022: SCHEDULE OF SHARES AUTHORIZED UNDER STOCK OPTION PLANS BY EXERCISE PRICE RANGE Outstanding options Exercisable options Exercise price range Number of options Weighted average contractual life Number of options Weighted average remaining contractual life $ 0.01 2.49 740,000 8.1 652,500 8.0 $ 2.50 3.49 310,313 5.8 310,313 5.8 $ 3.50 4.49 37,000 3.3 37,000 3.3 1,087,313 7.3 999,813 7.1 |
SUMMARY OF RESTRICTED STOCK ACTIVITY | A summary of all restricted stock activity under the Plans for the six months ended June 30, 2022 is as follows: SUMMARY OF RESTRICTED STOCK ACTIVITY Number of Restricted shares Weighted average grant date fair value Nonvested balance, December 31, 2021 1,057,375 $ 1.87 Granted 715,000 1.07 Vested (463,375 ) (1.89 ) Forfeited (65,000 ) (1.06 ) Nonvested balance, June 30, 2022 1,244,000 $ 1.45 |
SCHEDULE OF NON-VESTED BALANCE OF RESTRICTED STOCK | The nonvested balance of restricted stock vests as follows: SCHEDULE OF NON-VESTED BALANCE OF RESTRICTED STOCK Years ended Number of shares 2022 (July 1, 2022 through December 31, 2022) 119,500 2023 663,000 2024 279,000 2025 80,000 2026 72,500 2027 30,000 |
COMMON STOCK PURCHASE WARRANTS
COMMON STOCK PURCHASE WARRANTS (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Common Stock Purchase Warrants | |
SCHEDULE OF WARRANT MODIFICATION | SCHEDULE OF WARRANT MODIFICATION Original terms at August 19, 2021 Modified terms at August 19, 2021 Volatility - range 109.3 % 104.7 % Risk-free rate 0.78 % 0.78 % Dividend 0 % 0 % Remaining contractual term 4.5 5.1 Exercise price $ 3.25 $ 3.25 Common stock issuable under the warrants 14,300,000 14,300,000 |
SCHEDULE OF FAIR VALUE OF THE WARRANT DERIVATIVE LIABILITIES | The Company has utilized the following assumptions in its Black-Scholes option valuation model to calculate the estimated fair value of the warrant derivative liabilities as of their date of issuance and as of June 30, 2022: SCHEDULE OF FAIR VALUE OF THE WARRANT DERIVATIVE LIABILITIES Issuance date assumptions June 30, 2022 assumptions Volatility - range 106.6 166.6 % 104.7 % Risk-free rate 0.08 0.49 % 3.01 % Dividend 0 % 0 % Remaining contractual term 0.01 5 3.5 4.2 Exercise price $ 2.80 3.25 $ 3.25 Common stock issuable under the warrants 42,550,000 24,300,000 |
SUMMARY OF WARRANT ACTIVITY | The following table summarizes information about shares issuable under warrants outstanding during the six months ended June 30, 2022: SUMMARY OF WARRANT ACTIVITY Warrants Weighted average exercise price Vested Balance, January 1, 2022 26,008,598 $ 3.24 Granted — — Exercised — — Forfeited/cancelled (333,667 ) 3.51 Vested Balance, June 30, 2022 25,674,931 $ 3.24 |
SUMMARY OF RANGE OF EXERCISE PRICES AND WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE OF WARRANTS | The following table summarizes the range of exercise prices and weighted average remaining contractual life for outstanding and exercisable warrants to purchase shares of common stock as of June 30, 2022: SUMMARY OF RANGE OF EXERCISE PRICES AND WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE OF WARRANTS Outstanding and exercisable warrants Exercise price Number of warrants Weighted average remaining contractual life $ 2.60 465,712 1.1 $ 3.00 316,800 0.8 $ 3.25 24,300,000 3.9 $ 3.36 566,666 0.7 $ 3.75 25,753 0.1 25,674,931 3.8 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Equity [Abstract] | |
SCHEDULE OF STOCK REPURCHASE | SCHEDULE OF STOCK REPURCHASE Period Total Number of Average Price Total Number of Maximum Approximate Dollar Value of December 2021 1,734,838 $ 1.14 1,734,838 — January 2022 697,093 1.11 697,093 — February 2022 692,984 1.12 692,984 — March 2022 485,957 1.06 485,957 — April 2022 595,476 1.14 595,476 — May 2022 716,911 1.08 716,911 — June 2022 537,565 0.96 537,565 — Total all plans 5,460,824 $ 1.10 5,460,824 $ 3,998,398 |
NET EARNINGS (LOSS) PER SHARE (
NET EARNINGS (LOSS) PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING AND LOSS PER SHARE OUTSTANDING | The calculation of the weighted average number of shares outstanding and loss per share outstanding for the three and six months ended June 30, 2022 and 2021 are as follows: SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING AND LOSS PER SHARE OUTSTANDING Three Months Ended June 30, Six Months Ended 2022 2021 2022 2021 Numerator for basic and diluted income per share – Net income (loss) attributable to common stockholders $ (1,065,513 ) $ (5,382,487 ) $ (7,665,662 ) $ 16,339,371 Denominator for basic loss per share – weighted average shares outstanding 48,657,440 51,513,691 49,787,562 48,177,399 Dilutive effect of shares issuable under stock options and warrants outstanding — — — — Denominator for diluted loss per share – adjusted weighted average shares outstanding 48,657,440 51,513,691 49,787,562 48,177,399 Net loss per share: Basic $ (0.02 ) $ (0.10 ) $ (0.15 ) $ 0.34 Diluted $ (0.02 ) $ (0.10 ) $ (0.15 ) $ 0.34 |
DIGITAL ALLY HEALTHCARE VENTU_2
DIGITAL ALLY HEALTHCARE VENTURE (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Healthcare Acquisition [Member] | |
Restructuring Cost and Reserve [Line Items] | |
SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION | SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION Purchase price allocation Description Preliminary Final Assets acquired: Tangible assets acquired, consisting of acquired cash, accounts receivable and right of use asset $ 174,351 $ 174,351 Intangible assets acquired – Client Agreements $ 174,351 $ 174,351 Intangible assets acquired – client agreements — 457,079 Goodwill 1,125,000 667,921 Liabilities assumed consisting of a promissory note issued by the selling shareholders which was paid off at closing, net of lease liability assumed 77,158 77,158 Liabilities assumed pursuant to stock purchase agreement 77,158 77,158 Net assets acquired and liabilities assumed $ 1,376,509 $ 1,376,509 Consideration: Cash paid at Healthcare Acquisition date $ 1,026,509 $ 1,026,509 Contingent consideration earn-out agreement 350,000 350,000 Total Healthcare Acquisition purchase price $ 1,376,509 $ 1,376,509 |
Medical Billing Acquisition [Member] | |
Restructuring Cost and Reserve [Line Items] | |
SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION | SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION Description Amount Assets acquired: Tangible assets acquired $ 401,547 Goodwill 2,920,000 Liabilities assumed pursuant to stock purchase agreement (401,547 ) Total assets acquired and liabilities assumed $ 2,920,000 Consideration: Cash paid at acquisition date $ 2,270,000 Contingent consideration promissory note 650,000 Total acquisition purchase price $ 2,920,000 |
Medical Billing Acquisition One [Member] | |
Restructuring Cost and Reserve [Line Items] | |
SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION | SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION Description Amount Assets acquired: Tangible assets acquired $ 190,631 Goodwill 2,100,000 Liabilities assumed pursuant to stock purchase agreement (387,005 ) Total assets acquired and liabilities assumed $ 1,903,626 Consideration: Cash paid at acquisition date $ 1,153,626 Contingent consideration promissory note 750,000 Total acquisition purchase price $ 1,903,626 |
Medical Billing Acquisition Two [Member] | |
Restructuring Cost and Reserve [Line Items] | |
SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION | SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION Description Amount Assets acquired: Intangible assets acquired – client agreements $ 335,000 Total assets acquired and liabilities assumed $ 335,000 Consideration: Cash paid at acquisition date $ 230,000 Contingent consideration promissory note 105,000 Total acquisition purchase price $ 335,000 |
TICKETSMARTER ACQUISITION (Tabl
TICKETSMARTER ACQUISITION (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Business Acquisition [Line Items] | |
SCHEDULE OF COMPONENTS OF IDENTIFIABLE INTANGIBLE ASSETS ACQUIRED AND ESTIMATED USEFUL LIVES | The following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives in years as of the date of acquisition: SCHEDULE OF COMPONENTS OF IDENTIFIABLE INTANGIBLE ASSETS ACQUIRED AND ESTIMATED USEFUL LIVES Cost Amortization through Estimated useful life Identifiable intangible assets: Trademarks $ 600,000 $ — indefinite Sponsorship agreement network 5,600,000 933,333 5 Search engine optimization/content 600,000 125,000 4 $ 6,800,000 $ 1,058,333 |
Ticket Smarter Acquisition [Member] | |
Business Acquisition [Line Items] | |
SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED ACQUISITION | SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED ACQUISITION Preliminary purchase price allocation As allocated As allocated Description September 30, December 31, 2021 Assets acquired: Tangible assets acquired, including $ 51,432 $ 7,139,930 $ 5,748,291 Identifiable intangible assets acquired — 6,800,000 Goodwill 11,839,308 5,886,547 Liabilities assumed (5,128,964 ) (5,128,964 ) Net assets acquired and liabilities assumed $ 13,850,274 $ 13,305,874 Consideration: Cash paid at TicketSmarter Acquisition date $ 8,413,240 $ 8,413,240 Common stock issued as consideration for TicketSmarter Acquisition at date of acquisition 990,360 990,360 Contingent consideration earn-out agreement 4,244,400 3,700,000 Cash paid at closing to escrow amount 500,000 500,000 Cash retained from escrow amount pursuant to settlement of working capital target (297,726 ) (297,726 ) Total TicketSmarter Acquisition purchase price $ 13,850,274 $ 13,305,874 |
SEGMENT DATA (Tables)
SEGMENT DATA (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Segment Reporting [Abstract] | |
SCHEDULE OF SEGMENT REPORTING | Summarized financial information for the Company’s reportable business segments is provided for the indicated periods and as of June 30, 2022, and June 30, 2021: SCHEDULE OF SEGMENT REPORTING 2022 2021 1 2 Three months ended June 30, Six months ended June 30, 2022 2021 2022 2021 Net Revenues: Video Solutions $ 2,049,756 $ 2,493,671 $ 4,059,805 $ 5,029,501 Revenue Cycle Management 2,120,738 — 4,024,695 — Ticketing 5,180,963 — 11,561,738 — Total Net Revenues $ 9,351,457 $ 2,493,671 $ 19,646,238 $ 5,029,501 Gross Profit: Video Solutions $ 759,010 $ 1,260,800 $ 1,027,440 $ 2,072,683 Revenue Cycle Management 957,263 — 1,654,432 — Ticketing 2,805 — 976,824 — Total Gross Profit $ 1,719,078 $ 1,260,800 $ 3,658,696 $ 2,072,683 Operating Income (loss): Video Solutions $ (1,130,749 ) $ (296,601 ) $ (2,846,004 ) $ (979,520 ) Revenue Cycle Management 247,301 — 118,783 — Ticketing (2,320,694 ) — (3,766,541 ) — Corporate (3,457,110 ) (2,320,283 ) (6,970,828 ) (4,503,058 ) Total Operating Income (Loss) $ (6,661,252 ) $ (2,616,884 ) $ (13,464,590 ) $ (5,482,578 ) Depreciation and Amortization: Video Solutions $ 209,442 $ 87,830 $ 385,516 $ 145,459 Revenue Cycle Management 319,175 — 638,358 — Ticketing 218 — 364 — Total Depreciation and Amortization $ 528,835 $ 87,830 $ 1,024,238 $ 145,459 June 30, 2022 December 31, 2021 Assets (net of eliminations): Video Solutions $ 35,219,240 $ 25,983,348 Revenue Cycle Management 1,678,775 934,095 Ticketing 10,097,319 12,260,780 Corporate 23,733,487 43,810,974 Total Identifiable Assets $ 70,728,821 $ 82,989,197 |
SCHEDULE OF CONTRACT LIABILITIE
SCHEDULE OF CONTRACT LIABILITIES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Contract liabilities, current, beginning | $ 1,665,519 | ||
Contract liabilities, current, additions | 611,938 | ||
Contract liabilities, current, revenue recognized | 333,075 | ||
Contract liabilities, current, ending | $ 1,944,382 | 1,944,382 | $ 1,665,519 |
Contract liabilities, non-current, beginning | 2,687,786 | ||
Contract liabilities, non-current, additions | 2,174,949 | ||
Contract liabilities, non-current, revenue recognized | 775,309 | ||
Contract liabilities, non-current, ending | 4,087,426 | 4,087,426 | 2,687,786 |
Contract liabilities, additions | 2,786,887 | ||
Contract liabilities, revenue recognized | 400,000 | 1,108,384 | |
Contract liabilities, ending | $ 6,031,808 | $ 6,031,808 | $ 4,353,305 |
SCHEDULE OF SHORT TERM INVESTME
SCHEDULE OF SHORT TERM INVESTMENTS (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Adjusted cost | $ 13,454,246 | $ 32,039,673 |
Realized gains | ||
Realized Losses | ||
Fair value | 13,454,246 | 32,007,792 |
Unrealized gains | ||
Unrealized losses | (31,881) | |
Cash [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Adjusted cost | 5,841,857 | 5,031,246 |
Realized gains | ||
Realized Losses | ||
Fair value | 5,841,857 | 5,031,246 |
Unrealized gains | ||
Unrealized losses | ||
Money Market Funds [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Adjusted cost | 7,612,389 | 14,928,526 |
Realized gains | ||
Realized Losses | ||
Fair value | $ 7,612,389 | 14,928,526 |
Unrealized gains | ||
Unrealized losses | ||
Mutual Funds [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Adjusted cost | 12,079,901 | |
Fair value | 12,048,020 | |
Unrealized gains | ||
Unrealized losses | $ (31,881) |
NATURE OF BUSINESS AND SUMMAR_4
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) Segment | Dec. 31, 2021 USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Contract liabilities, revenue recognized | $ 400,000 | $ 1,108,384 | |
Sales return and allowances | 117,552 | $ 45,298 | |
Cash, FDIC insured amount | 250,000 | 250,000 | |
Uninsured balance | $ 11,682,011 | $ 11,682,011 | $ 29,836,142 |
Number of operating segments | Segment | 3 |
SCHEDULE OF INVENTORIES (Detail
SCHEDULE OF INVENTORIES (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Raw material and component parts– video solutions segment | $ 4,083,713 | $ 3,062,046 |
Work-in-process– video solutions segment | 153 | |
Finished goods – video solutions segment | 7,866,087 | 8,410,307 |
Finished goods – ticketing segment | 1,178,468 | 2,102,272 |
Subtotal | 13,128,421 | 13,574,625 |
Reserve for excess and obsolete inventory– video solutions segment | (3,272,832) | (3,353,458) |
Reserve for excess and obsolete inventory – ticketing segment | (449,635) | (561,631) |
Total inventories | $ 9,405,954 | $ 9,659,536 |
INVENTORIES (Details Narrative)
INVENTORIES (Details Narrative) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Units held by customers and agents | $ 135,573 | $ 153,976 |
SUMMARY OF DEBT OBLIGATIONS (De
SUMMARY OF DEBT OBLIGATIONS (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
Economic injury disaster loan (EIDL) | $ 150,000 | $ 150,000 |
Contingent consideration promissory note – Nobility Healthcare Division Acquisition | 211,867 | 317,212 |
Contingent consideration promissory note – Nobility Healthcare Division Acquisition | 426,326 | 650,000 |
Contingent consideration promissory note – Nobility Healthcare Division Acquisition | 481,151 | |
Contingent consideration promissory note – Nobility Healthcare Division Acquisition | ||
Debt obligations | 1,269,344 | 1,117,212 |
Less: current maturities of debt obligations | 514,664 | 389,934 |
Debt obligations, long-term | $ 754,680 | $ 727,278 |
SCHEDULE OF MATURITY OF DEBT OB
SCHEDULE OF MATURITY OF DEBT OBLIGATIONS (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Debt Disclosure [Abstract] | ||
2022 (July 1, 2022 to December 31, 2022) | $ 257,317 | |
2023 | 514,722 | |
2024 | 355,295 | |
2025 | 3,412 | |
2026 | 3,542 | |
2027 and thereafter | 135,056 | |
Total | $ 1,269,344 | $ 1,117,212 |
DEBT OBLIGATIONS (Details Narra
DEBT OBLIGATIONS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||||||||
Feb. 01, 2022 | Jan. 01, 2022 | Aug. 31, 2021 | Jun. 30, 2021 | Dec. 10, 2020 | May 12, 2020 | May 04, 2020 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | |
Short-Term Debt [Line Items] | |||||||||||||
Gain on the extinguishment of debt | $ 10,000 | $ 10,000 | |||||||||||
Debt instrument face amount | 150,000 | 150,000 | $ 150,000 | ||||||||||
Paycheck Protection Program [Member] | 2020 Small Business Administration Notes [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Notes Payable | $ 1,418,900 | ||||||||||||
Debt instrument term | 2 years | ||||||||||||
Interest rate | 1% | ||||||||||||
Principal payments | $ 79,851 | ||||||||||||
Gain on the extinguishment of debt | $ 1,418,900 | ||||||||||||
Proceeds from loans | $ 10,000 | ||||||||||||
2020 Small Business Administration Notes [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Interest rate | 3.75% | ||||||||||||
Principal payments | $ 731 | ||||||||||||
Proceeds from loans | 150,000 | ||||||||||||
Debt instrument face amount | $ 150,000 | ||||||||||||
June Contingent Payment Note [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Debt instrument term | 3 years | ||||||||||||
Interest rate | 3% | 3% | 3% | ||||||||||
Debt instrument face amount | $ 350,000 | $ 350,000 | $ 350,000 | ||||||||||
Debt instrument projected revenue | 975,000 | ||||||||||||
Debt instrument fair value | $ 350,000 | 211,868 | $ 350,000 | 211,868 | $ 350,000 | ||||||||
Debt instrument payment | 57,724 | ||||||||||||
Estimated fair value | $ 3,844 | ||||||||||||
Securities gain loss | 3,844 | 47,620 | |||||||||||
August Contingent Payment Note [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Debt instrument term | 3 years | ||||||||||||
Interest rate | 3% | ||||||||||||
Debt instrument face amount | $ 650,000 | ||||||||||||
Debt instrument projected revenue | 3,000,000 | ||||||||||||
Debt instrument fair value | $ 650,000 | 426,326 | 426,326 | ||||||||||
Debt instrument payment | 159,098 | ||||||||||||
Securities gain loss | 172,091 | 64,576 | |||||||||||
Decreased in estimated fair value of debt | $ 172,091 | ||||||||||||
January Contingent Payment Note [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Debt instrument term | 2 years | ||||||||||||
Interest rate | 3% | ||||||||||||
Debt instrument face amount | $ 750,000 | ||||||||||||
Debt instrument projected revenue | 3,500,000 | ||||||||||||
Debt instrument fair value | $ 750,000 | 481,151 | 481,151 | ||||||||||
Securities gain loss | 268,849 | ||||||||||||
Decreased in estimated fair value of debt | 268,849 | ||||||||||||
February Contingent Payment Note [Member] | |||||||||||||
Short-Term Debt [Line Items] | |||||||||||||
Debt instrument term | 3 years | ||||||||||||
Interest rate | 3% | ||||||||||||
Debt instrument face amount | $ 105,000 | ||||||||||||
Debt instrument projected revenue | 440,000 | ||||||||||||
Debt instrument fair value | $ 105,000 | 0 | 0 | ||||||||||
Securities gain loss | $ 105,000 | $ 105,000 | |||||||||||
[custom:ReductionInEstimatedFairValueofDebt-0] | $ 105,000 |
SCHEDULE OF FINANCIAL ASSETS AN
SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | $ 10,404,487 | $ 15,814,144 |
Warrant Liability [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | 9,285,143 | 14,846,932 |
Contingent Consideration Promissory Notes And Contingent Consideration Earn Out [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | 1,119,344 | 967,212 |
Fair Value, Inputs, Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | ||
Fair Value, Inputs, Level 1 [Member] | Warrant Liability [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | ||
Fair Value, Inputs, Level 1 [Member] | Contingent Consideration Promissory Notes And Contingent Consideration Earn Out [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | ||
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | ||
Fair Value, Inputs, Level 2 [Member] | Warrant Liability [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | ||
Fair Value, Inputs, Level 2 [Member] | Contingent Consideration Promissory Notes And Contingent Consideration Earn Out [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | ||
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | 10,404,487 | 15,814,144 |
Fair Value, Inputs, Level 3 [Member] | Warrant Liability [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | 9,285,143 | 14,846,932 |
Fair Value, Inputs, Level 3 [Member] | Contingent Consideration Promissory Notes And Contingent Consideration Earn Out [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | $ 1,119,344 | $ 967,212 |
SCHEDULE OF FAIR VALUE MEASUREM
SCHEDULE OF FAIR VALUE MEASUREMENTS CHANGE IN LEVEL 3 INPUTS (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Short-Term Debt [Line Items] | |||||
Beginning balance | $ 15,814,144 | $ 15,814,144 | |||
Change in fair value of contingent consideration promissory note | $ 5,413,618 | $ (2,863,422) | 5,561,789 | $ 21,688,835 | |
Ending balance | 10,404,487 | 10,404,487 | |||
Contingent Consideration Promissory Note [Member] | |||||
Short-Term Debt [Line Items] | |||||
Beginning balance | 1,762,064 | 967,212 | 967,212 | ||
Change in fair value of contingent consideration promissory note | |||||
Ending balance | 1,119,344 | 1,762,064 | 1,119,344 | ||
Contingent Consideration Promissory Note [Member] | Revenue Cycle Management Segment Acquisition [Member] | |||||
Short-Term Debt [Line Items] | |||||
Issuance of contingent consideration promissory note | 750,000 | ||||
Issuance of contingent consideration promissory note | 105,000 | ||||
Principal payments on contingent consideration promissory notes | (100,624) | (116,198) | |||
Change in fair value of contingent consideration promissory note | (542,096) | 56,050 | |||
Warrant Liability [Member] | |||||
Short-Term Debt [Line Items] | |||||
Beginning balance | 14,698,761 | 14,846,932 | 14,846,932 | ||
Change in fair value of contingent consideration promissory note | (5,413,618) | (148,171) | |||
Ending balance | 9,285,143 | 14,698,761 | $ 9,285,143 | ||
Warrant Liability [Member] | Revenue Cycle Management Segment Acquisition [Member] | |||||
Short-Term Debt [Line Items] | |||||
Issuance of contingent consideration promissory note | |||||
Issuance of contingent consideration promissory note | |||||
Principal payments on contingent consideration promissory notes | |||||
Change in fair value of contingent consideration promissory note |
SCHEDULE OF ACCRUED EXPENSES (D
SCHEDULE OF ACCRUED EXPENSES (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Accrued warranty expense | $ 16,389 | $ 13,742 |
Accrued litigation costs | 247,984 | 250,000 |
Accrued sales commissions | 48,000 | 30,213 |
Accrued payroll and related fringes | 461,189 | 453,858 |
Accrued sales returns and allowances | 117,552 | 45,298 |
Accrued taxes | 104,506 | 180,486 |
Other | 135,117 | 202,401 |
Total accrued expenses | $ 1,130,737 | $ 1,175,998 |
SCHEDULE OF ACCRUED WARRANTY EX
SCHEDULE OF ACCRUED WARRANTY EXPENSE (Details) | 6 Months Ended |
Jun. 30, 2022 USD ($) | |
Payables and Accruals [Abstract] | |
Beginning balance | $ 13,742 |
Provision for warranty expense | 41,166 |
Charges applied to warranty reserve | (38,519) |
Ending balance | $ 16,389 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |||
Percentage of valuation allowance | 100% | 100% | 100% |
Operating loss carryforwards | $ 81.4 | $ 81.4 |
SCHEDULE OF PREPAID EXPENSE (De
SCHEDULE OF PREPAID EXPENSE (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Prepaid Expenses | ||
Prepaid inventory | $ 6,710,710 | $ 6,546,100 |
Prepaid advertising | 657,831 | 2,455,527 |
Other | 542,894 | 727,155 |
Total prepaid expenses | $ 7,911,435 | $ 9,728,782 |
SCHEDULE OF PROPERTY, PLANT AND
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||
Building | $ 4,909,478 | $ 4,909,478 |
Land | 789,734 | 789,734 |
Office furniture, fixtures and equipment | 2,013,281 | 493,652 |
Warehouse and production equipment | 78,321 | 65,948 |
Demonstration and tradeshow equipment | 131,838 | 82,337 |
Building improvements | 1,253,937 | 911,940 |
Rental equipment | 8,584 | 8,584 |
Total cost | 9,185,173 | 7,261,673 |
Less: accumulated depreciation and amortization | (727,974) | (420,647) |
Net property, plant and equipment | $ 8,457,199 | $ 6,841,026 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 30 years | |
Furniture and Fixtures [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 3 years | |
Furniture and Fixtures [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 20 years | |
Warehouse [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 3 years | |
Warehouse [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 5 years | |
Demonstration and Tradeshow Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 2 years | |
Demonstration and Tradeshow Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 5 years | |
Building Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 2 years | |
Building Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 15 years | |
Rental Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 1 year | |
Rental Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 3 years |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 307,328 | $ 95,346 |
SCHEDULE OF OPERATING LEASES RI
SCHEDULE OF OPERATING LEASES RIGHT OF USE ASSETS AND LIABILITIES (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Operating Lease | ||
Operating lease right of use assets | $ 951,928 | $ 993,384 |
Operating lease obligations-current portion | 353,646 | 373,371 |
Operating lease obligations-less current portion | 666,477 | $ 688,207 |
Total operating lease obligations | $ 1,020,123 |
SCHEDULE OF FUTURE MINIMUM LEAS
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS (Details) | Jun. 30, 2022 USD ($) |
Operating Lease | |
2022 (July 1, to December 31, 2022) | $ 250,285 |
2023 | 305,627 |
2024 | 245,761 |
2025 | 196,462 |
Thereafter | 175,113 |
Total undiscounted minimum future lease payments | 1,173,248 |
Imputed interest | (153,125) |
Total operating lease obligations | $ 1,020,123 |
OPERATING LEASE (Details Narrat
OPERATING LEASE (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Jan. 01, 2022 | Sep. 01, 2021 | Aug. 31, 2021 | Jun. 30, 2021 | May 13, 2020 | Oct. 31, 2019 | Jun. 30, 2022 | Jun. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Weighted-average remaining lease term | 3 years 6 months | 3 years 6 months | ||||||
Weighted average discount rate | 8% | 8% | ||||||
Elite Medical Billing Specialists, Inc [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Termination period | termination date of July 2024. | |||||||
Lease term | 25 months | 25 months | ||||||
Custom Computing Corporation, LLC [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Termination period | termination date of March 2023. | |||||||
Lease term | 9 months | 9 months | ||||||
Ticket Smarter Acquisition [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Termination period | termination date of December 2022. | |||||||
Lease term | 6 months | 6 months | ||||||
Private Medical Billing Company [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Termination period | termination date of June 2025. | |||||||
Lease term | 36 months | 36 months | ||||||
Minimum [Member] | Elite Medical Billing Specialists, Inc [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease, payments | $ 2,648 | |||||||
Minimum [Member] | Custom Computing Corporation, LLC [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease, payments | $ 11,579 | |||||||
Minimum [Member] | Ticket Smarter Acquisition [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease, payments | $ 7,211 | |||||||
Minimum [Member] | Private Medical Billing Company [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease, payments | $ 4,233 | |||||||
Maximum [Member] | Elite Medical Billing Specialists, Inc [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease, payments | $ 2,774 | |||||||
Maximum [Member] | Custom Computing Corporation, LLC [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease, payments | $ 11,811 | |||||||
Maximum [Member] | Ticket Smarter Acquisition [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease, payments | $ 7,364 | |||||||
Maximum [Member] | Private Medical Billing Company [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease, payments | $ 4,626 | |||||||
September 2012 for Office and Warehouse Space [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Termination period | termination date of December 2026. | |||||||
Lease term | 54 months | 54 months | ||||||
September 2012 for Office and Warehouse Space [Member] | Minimum [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease, payments | $ 12,398 | |||||||
September 2012 for Office and Warehouse Space [Member] | Maximum [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease, payments | $ 14,741 | |||||||
October 2019 for Copiers [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease, payments | $ 1,598 | |||||||
Termination period | maturity date of October 2023. | |||||||
Lease term | 48 months | 16 months | 16 months | |||||
Office Space and Copier [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease | $ 119,230 | $ 274,302 |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | $ 20,116,736 | $ 17,627,139 |
Accumulated amortization | 1,441,267 | 724,626 |
Net carrying value | 18,675,469 | 16,902,513 |
Amortized Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 7,882,241 | 7,090,162 |
Accumulated amortization | 1,441,267 | 724,626 |
Net carrying value | 6,440,974 | 6,365,536 |
Amortized Intangible Assets [Member] | Licenses [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 194,286 | 194,286 |
Accumulated amortization | 73,866 | 65,578 |
Net carrying value | 120,420 | 128,708 |
Amortized Intangible Assets [Member] | Patents and Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 493,945 | 493,945 |
Accumulated amortization | 303,485 | 233,471 |
Net carrying value | 190,460 | 260,474 |
Amortized Intangible Assets [Member] | Sponsorship Agreement Network [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 5,600,000 | 5,600,000 |
Accumulated amortization | 933,333 | 373,333 |
Net carrying value | 4,666,667 | 5,226,667 |
Amortized Intangible Assets [Member] | SEO Content [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 600,000 | 600,000 |
Accumulated amortization | 125,000 | 50,000 |
Net carrying value | 475,000 | 550,000 |
Amortized Intangible Assets [Member] | Personal Sear Licenses (Ticketing) [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 201,931 | 201,931 |
Accumulated amortization | 5,583 | 2,244 |
Net carrying value | 196,348 | 199,687 |
Amortized Intangible Assets [Member] | Client Agreement Revenue Cycle [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 792,079 | |
Accumulated amortization | ||
Net carrying value | 792,079 | |
Unamortized Intangible Assets [Member] | Goodwill [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 11,574,468 | 9,931,547 |
Accumulated amortization | ||
Net carrying value | 11,574,468 | 9,931,547 |
Unamortized Intangible Assets [Member] | Trade Name [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 600,000 | 600,000 |
Accumulated amortization | ||
Net carrying value | 600,000 | 600,000 |
Unamortized Intangible Assets [Member] | Patents and Trademarks Pending [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 60,027 | 5,430 |
Accumulated amortization | ||
Net carrying value | $ 60,027 | $ 5,430 |
SCHEDULE OF ESTIMATED AMORTIZAT
SCHEDULE OF ESTIMATED AMORTIZATION FOR INTANGIBLE ASSETS (Details) | Jun. 30, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 (July 1, to December 31, 2022) | $ 813,792 |
2023 | 1,448,622 |
2024 | 1,398,065 |
2025 | 1,311,958 |
2026 and thereafter | 1,468,537 |
Total | $ 6,440,974 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 10 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Amortization of Intangible Assets | $ 358,944 | $ 27,483 | $ 716,910 | $ 50,114 | $ 1,058,333 |
SCHEDULE OF OTHER ASSETS (Detai
SCHEDULE OF OTHER ASSETS (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Lease receivable | $ 3,337,608 | $ 1,921,021 |
Sponsorship network | 3,337,465 | 30,752 |
Other | 232,208 | 155,526 |
Total other assets | $ 6,907,281 | $ 2,107,299 |
SUMMARY OF STOCK OPTIONS OUTSTA
SUMMARY OF STOCK OPTIONS OUTSTANDING (Details) - Stock Options [Member] | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Options Outstanding, Beginning balance | shares | 1,086,063 |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ / shares | $ 2.37 |
Options Granted | shares | 25,000 |
Weighted Average Exercise Price, Granted | $ / shares | $ 0.98 |
Options Exercised | shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Options Forfeited | shares | (23,750) |
Weighted Average Exercise Price, Forfeited | $ / shares | $ (4.33) |
Options Outstanding, Ending balance | shares | 1,087,313 |
Weighted Average Exercise Price, Outstanding, Ending balance | $ / shares | $ 2.30 |
Options Exercisable | shares | 999,813 |
Weighted Average Exercise Price, Exercisable | $ / shares | $ 2.36 |
SCHEDULE OF FAIR VALUE OF STOCK
SCHEDULE OF FAIR VALUE OF STOCK OPTIONS ASSUMPTION (Details) | 6 Months Ended |
Jun. 30, 2022 $ / shares | |
Share-Based Payment Arrangement [Abstract] | |
Volatility - range | 111.67% |
Risk-free rate | 1.80% |
Expected term | 10 years |
Exercise price | $ 0.98 |
SCHEDULE OF SHARES AUTHORIZED U
SCHEDULE OF SHARES AUTHORIZED UNDER STOCK OPTION PLANS BY EXERCISE PRICE RANGE (Details) | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number of options, outstanding | 1,087,313 |
Weighted average remaining contractual life, outstanding options | 7 years 3 months 18 days |
Number of options, exercisable | 999,813 |
Weighted average remaining contractual life, exercisable options | 7 years 1 month 6 days |
Range One [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit | $ / shares | $ 0.01 |
Exercise price range, upper limit | $ / shares | $ 2.49 |
Number of options, outstanding | 740,000 |
Weighted average remaining contractual life, outstanding options | 8 years 1 month 6 days |
Number of options, exercisable | 652,500 |
Weighted average remaining contractual life, exercisable options | 8 years |
Range Two [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit | $ / shares | $ 2.50 |
Exercise price range, upper limit | $ / shares | $ 3.49 |
Number of options, outstanding | 310,313 |
Weighted average remaining contractual life, outstanding options | 5 years 9 months 18 days |
Number of options, exercisable | 310,313 |
Weighted average remaining contractual life, exercisable options | 5 years 9 months 18 days |
Range Three [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit | $ / shares | $ 3.50 |
Exercise price range, upper limit | $ / shares | $ 4.49 |
Number of options, outstanding | 37,000 |
Weighted average remaining contractual life, outstanding options | 3 years 3 months 18 days |
Number of options, exercisable | 37,000 |
Weighted average remaining contractual life, exercisable options | 3 years 3 months 18 days |
SUMMARY OF RESTRICTED STOCK ACT
SUMMARY OF RESTRICTED STOCK ACTIVITY (Details) | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Restricted shares, Forfeited | (65,000) |
Restricted Stock [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Restricted shares, Non-vested Beginning Balance | 1,057,375 |
Weighted average grant date fair value, Non-vested Beginning Balance | $ / shares | $ 1.87 |
Number of Restricted shares, Granted | 715,000 |
Weighted average grant date fair value, Granted | $ / shares | $ 1.07 |
Number of Restricted shares, Vested | (463,375) |
Weighted average grant date fair value, Vested | $ / shares | $ (1.89) |
Number of Restricted shares, Forfeited | (65,000) |
Weighted average grant date fair value, Forfeited | $ / shares | $ (1.06) |
Number of Restricted shares, Non-vested Ending Balance | 1,244,000 |
Weighted average grant date fair value, Non-vested Ending Balance | $ / shares | $ 1.45 |
SCHEDULE OF NON-VESTED BALANCE
SCHEDULE OF NON-VESTED BALANCE OF RESTRICTED STOCK (Details) | Jun. 30, 2022 shares |
Share-Based Payment Arrangement [Abstract] | |
2022 (July 1, 2022 through December 31, 2022) | 119,500 |
2023 | 663,000 |
2024 | 279,000 |
2025 | 80,000 |
2026 | 72,500 |
2027 | 30,000 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Pretax compensation expense | $ 381,601 | $ 330,213 | $ 776,350 | $ 656,378 | |
Stock options or restricted stock granted | 6,675,000 | 6,675,000 | |||
Options, available for grant | 190,845 | 190,845 | |||
Stock options granted, value | $ 22,768 | ||||
Aggregate intrinsic value | $ 0 | 0 | $ 0 | ||
Aggregate intrinsic value of options exercisable | 0 | 0 | $ 0 | ||
Unrecognized portion of stock compensation expense | 0 | 0 | |||
Restricted Stock Units (RSUs) [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Unrecognized portion of stock compensation expense | $ 880,299 | $ 880,299 | |||
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 55 months | ||||
2005 Stock Option Plan [Member] | During 2015 [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Shares unavailable for issuance | 21,553 | 21,553 | |||
Stock options unexercised and outstanding | 5,689 | 5,689 | |||
2005 Stock Option Plan [Member] | During 2016 [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Stock options unexercised and outstanding | 10,625 | 10,625 | |||
2005 Stock Option Plan [Member] | During 2017 [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Stock options unexercised and outstanding | 0 | 0 | |||
2005 Stock Option Plan [Member] | During 2018 [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Stock options unexercised and outstanding | 0 | 0 | |||
2006 Stock Option Plan [Member] | During 2016 [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Shares unavailable for issuance | 54,787 | 54,787 | |||
2007 Stock Option Plan [Member] | During 2017 [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Shares unavailable for issuance | 94,651 | 94,651 | |||
2008 Plan [Member] | During 2018 [Member] | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Shares unavailable for issuance | 40,499 | 40,499 |
SCHEDULE OF WARRANT MODIFICATIO
SCHEDULE OF WARRANT MODIFICATION (Details) | Aug. 19, 2021 shares | Jan. 14, 2021 shares |
Common stock issuable under the warrants | 42,550,000 | |
Warrant [Member] | Original Terms [Member] | ||
Common stock issuable under the warrants | 14,300,000 | |
Warrant [Member] | Modified Terms [Member] | ||
Common stock issuable under the warrants | 14,300,000 | |
Warrant [Member] | Measurement Input, Price Volatility [Member] | Original Terms [Member] | ||
Warrants measurement input | 109.3 | |
Warrant [Member] | Measurement Input, Price Volatility [Member] | Modified Terms [Member] | ||
Warrants measurement input | 104.7 | |
Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member] | Original Terms [Member] | ||
Warrants measurement input | 0.78 | |
Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member] | Modified Terms [Member] | ||
Warrants measurement input | 0.78 | |
Warrant [Member] | Measurement Input, Expected Dividend Rate [Member] | Original Terms [Member] | ||
Warrants measurement input | 0 | |
Warrant [Member] | Measurement Input, Expected Dividend Rate [Member] | Modified Terms [Member] | ||
Warrants measurement input | 0 | |
Warrant [Member] | Measurement Input, Expected Term [Member] | Original Terms [Member] | ||
Remaining contractual term | 4 years 6 months | |
Warrant [Member] | Measurement Input, Expected Term [Member] | Modified Terms [Member] | ||
Remaining contractual term | 5 years 1 month 6 days | |
Warrant [Member] | Measurement Input, Exercise Price [Member] | Original Terms [Member] | ||
Warrants measurement input | 3.25 | |
Warrant [Member] | Measurement Input, Exercise Price [Member] | Modified Terms [Member] | ||
Warrants measurement input | 3.25 |
SCHEDULE OF FAIR VALUE OF THE W
SCHEDULE OF FAIR VALUE OF THE WARRANT DERIVATIVE LIABILITIES (Details) | 6 Months Ended | |
Jan. 14, 2021 shares | Jun. 30, 2022 shares | |
Common stock issuable under the warrants | 42,550,000 | |
Warrant [Member] | Measurement Input, Price Volatility [Member] | ||
Derivative liability measurement input | 104.7 | |
Warrant [Member] | Measurement Input, Price Volatility [Member] | Minimum [Member] | ||
Derivative liability measurement input | 106.6 | |
Warrant [Member] | Measurement Input, Price Volatility [Member] | Maximum [Member] | ||
Derivative liability measurement input | 166.6 | |
Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||
Derivative liability measurement input | 3.01 | |
Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member] | Minimum [Member] | ||
Derivative liability measurement input | 0.08 | |
Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member] | Maximum [Member] | ||
Derivative liability measurement input | 0.49 | |
Warrant [Member] | Measurement Input, Expected Dividend Rate [Member] | ||
Derivative liability measurement input | 0 | 0 |
Warrant [Member] | Measurement Input, Expected Term [Member] | Minimum [Member] | ||
Remaining contractual term | 3 days | 3 years 6 months |
Warrant [Member] | Measurement Input, Expected Term [Member] | Maximum [Member] | ||
Remaining contractual term | 5 years | 4 years 2 months 12 days |
Warrant [Member] | Measurement Input, Exercise Price [Member] | ||
Derivative liability measurement input | 3.25 | |
Warrant [Member] | Measurement Input, Exercise Price [Member] | Minimum [Member] | ||
Derivative liability measurement input | 2.80 | |
Warrant [Member] | Measurement Input, Exercise Price [Member] | Maximum [Member] | ||
Derivative liability measurement input | 3.25 | |
Warrant Liability [Member] | ||
Common stock issuable under the warrants | 42,550,000 | 24,300,000 |
SUMMARY OF WARRANT ACTIVITY (De
SUMMARY OF WARRANT ACTIVITY (Details) - Warrant [Member] | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Warrants, Vested, Beginning balance | shares | 26,008,598 |
Weighted average exercise price, Vested, Beginning balance | $ / shares | $ 3.24 |
Warrants, Granted | shares | |
Weighted average exercise price, Granted | $ / shares | |
Warrants, Exercised | shares | |
Weighted average exercise price, Exercised | $ / shares | |
Warrants, Forfeited/Cancelled | shares | (333,667) |
Weighted average exercise price, Forfeited/Cancelled | $ / shares | $ 3.51 |
Warrants, Vested, Ending balance | shares | 25,674,931 |
Weighted average exercise price, Vested, Ending balance | $ / shares | $ 3.24 |
SUMMARY OF RANGE OF EXERCISE PR
SUMMARY OF RANGE OF EXERCISE PRICES AND WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE OF WARRANTS (Details) - Warrant [Member] | 6 Months Ended |
Jun. 30, 2022 $ / shares shares | |
Outstanding and exercisable warrants, Number of warrants | 25,674,931 |
Outstanding and exercisable warrants, Weighted average remaining contractual life | 3 years 9 months 18 days |
Range One [Member] | |
Outstanding and exercisable warrants, Exercise price | $ / shares | $ 2.60 |
Outstanding and exercisable warrants, Number of warrants | 465,712 |
Outstanding and exercisable warrants, Weighted average remaining contractual life | 1 year 1 month 6 days |
Range Two [Member] | |
Outstanding and exercisable warrants, Exercise price | $ / shares | $ 3 |
Outstanding and exercisable warrants, Number of warrants | 316,800 |
Outstanding and exercisable warrants, Weighted average remaining contractual life | 9 months 18 days |
Range Three [Member] | |
Outstanding and exercisable warrants, Exercise price | $ / shares | $ 3.25 |
Outstanding and exercisable warrants, Number of warrants | 24,300,000 |
Outstanding and exercisable warrants, Weighted average remaining contractual life | 3 years 10 months 24 days |
Range Four [Member] | |
Outstanding and exercisable warrants, Exercise price | $ / shares | $ 3.36 |
Outstanding and exercisable warrants, Number of warrants | 566,666 |
Outstanding and exercisable warrants, Weighted average remaining contractual life | 8 months 12 days |
Range Five [Member] | |
Outstanding and exercisable warrants, Exercise price | $ / shares | $ 3.75 |
Outstanding and exercisable warrants, Number of warrants | 25,753 |
Outstanding and exercisable warrants, Weighted average remaining contractual life | 1 month 6 days |
COMMON STOCK PURCHASE WARRANT_2
COMMON STOCK PURCHASE WARRANTS (Details Narrative) - USD ($) | 6 Months Ended | |||
Aug. 19, 2021 | Jun. 30, 2022 | Feb. 01, 2021 | Jan. 14, 2021 | |
Warrant to purchase | 42,550,000 | |||
Exercise price | $ 3.25 | |||
Warrants exercisable for common stock | 7,681,540 | |||
Warrants and Rights Outstanding | $ 11,818,644 | |||
Warrant modification expense | $ 295,780 | |||
Change in pricing inputs and volatilities, percentage | 111.67% | |||
Weighted average remaining terms | 45 months | |||
Fair Value, Inputs, Level 3 [Member] | ||||
Change in pricing inputs and volatilities, percentage | 10% | |||
Exchange Warrants [Member] | ||||
Warrants exercisable for common stock | 7,681,540 | |||
Warrants and Rights Outstanding | $ 12,114,424 | |||
Replacement Original Warrants [Member] | ||||
Warrants exercisable for common stock | 6,618,460 | |||
Warrants expiration date | Sep. 18, 2026 | |||
Common Stock Purchase Warrants [Member] | ||||
Warrant to purchase | 25,674,931 | |||
Warrant expiration date description | The warrants expire from August 21, 2022 through September 18, 2026 | |||
Common Stock Purchase Warrants [Member] | Minimum [Member] | ||||
Exercise price | $ 2.60 | |||
Common Stock Purchase Warrants [Member] | Maximum [Member] | ||||
Exercise price | $ 3.75 | |||
Common Stock [Member] | ||||
Warrant to purchase | 14,300,000 | 10,000,000 | ||
Common Stock [Member] | PreFunded Warrants [Member] | ||||
Warrant to purchase | 11,050,000 | 7,200,000 | ||
Warrant [Member] | ||||
Intrinsic value of all outstanding warrants | $ 0 |
SCHEDULE OF STOCK REPURCHASE (D
SCHEDULE OF STOCK REPURCHASE (Details) | Jun. 30, 2022 USD ($) $ / shares shares |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Shares Purchased | 5,460,824 |
Average Price Paid per Shares | $ / shares | $ 1.10 |
Total Number of Shares Purchased as Part of Publicly Announced Program | 5,460,824 |
Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | $ | $ 3,998,398 |
December 2022 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Shares Purchased | 1,734,838 |
Average Price Paid per Shares | $ / shares | $ 1.14 |
Total Number of Shares Purchased as Part of Publicly Announced Program | 1,734,838 |
Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | $ | |
January 2022 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Shares Purchased | 697,093 |
Average Price Paid per Shares | $ / shares | $ 1.11 |
Total Number of Shares Purchased as Part of Publicly Announced Program | 697,093 |
Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | $ | |
February 2022 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Shares Purchased | 692,984 |
Average Price Paid per Shares | $ / shares | $ 1.12 |
Total Number of Shares Purchased as Part of Publicly Announced Program | 692,984 |
Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | $ | |
March 2022 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Shares Purchased | 485,957 |
Average Price Paid per Shares | $ / shares | $ 1.06 |
Total Number of Shares Purchased as Part of Publicly Announced Program | 485,957 |
Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | $ | |
April 2022 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Shares Purchased | 595,476 |
Average Price Paid per Shares | $ / shares | $ 1.14 |
Total Number of Shares Purchased as Part of Publicly Announced Program | 595,476 |
Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | $ | |
May 2022 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Shares Purchased | 716,911 |
Average Price Paid per Shares | $ / shares | $ 1.08 |
Total Number of Shares Purchased as Part of Publicly Announced Program | 716,911 |
Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | $ | |
June 2022 [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of Shares Purchased | 537,565 |
Average Price Paid per Shares | $ / shares | $ 0.96 |
Total Number of Shares Purchased as Part of Publicly Announced Program | 537,565 |
Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program | $ |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 7 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Dec. 06, 2021 | |
Equity, Class of Treasury Stock [Line Items] | ||||||
Number of restricted common stock cancelled | 65,000 | |||||
Net income attributable to noncontrolling interests | $ 383,326 | $ 0 | $ 285,232 | $ 0 | ||
Nobility Healthcare LLC [Member] | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Noncontrolling shareholders ownership percentage | 49% | 49% | 49% | |||
Nobility Healthcare LLC [Member] | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Equity method investment, ownership percentage | 51% | 51% | 51% | |||
Stock Repurchase Program [Member] | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Number of shares repurchased, shares | 1,849,952 | 3,725,986 | 5,460,824 | |||
Number of shares repurchased, value | $ 1,962,755 | $ 4,026,523 | $ 6,001,602 | |||
Stock Repurchase Program [Member] | Maximum [Member] | ||||||
Equity, Class of Treasury Stock [Line Items] | ||||||
Stock repurchase authorized amount | $ 10,000,000 |
SCHEDULE OF WEIGHTED AVERAGE NU
SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING AND LOSS PER SHARE OUTSTANDING (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Earnings Per Share [Abstract] | ||||
Numerator for basic and diluted income per share – Net income (loss) attributable to common stockholders | $ (1,065,513) | $ (5,382,487) | $ (7,665,662) | $ 16,339,371 |
Denominator for basic loss per share – weighted average shares outstanding | 48,657,440 | 51,513,691 | 49,787,562 | 48,177,399 |
Dilutive effect of shares issuable under stock options and warrants outstanding | ||||
Denominator for diluted loss per share – adjusted weighted average shares outstanding | 48,657,440 | 51,513,691 | 49,787,562 | 48,177,399 |
Basic | $ (0.02) | $ (0.10) | $ (0.15) | $ 0.34 |
Diluted | $ (0.02) | $ (0.10) | $ (0.15) | $ 0.34 |
SCHEDULE OF PRELIMINARY FAIR VA
SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION (Details) - USD ($) | Jun. 30, 2022 | Feb. 01, 2022 | Jan. 01, 2022 | Aug. 31, 2021 | Jun. 30, 2021 |
Healthcare Acquisition [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Tangible assets acquired | $ 174,351 | $ 174,351 | |||
Intangible assets acquired – client agreements | 457,079 | ||||
Goodwill | 667,921 | 1,125,000 | |||
Liabilities assumed pursuant to stock purchase agreement | 77,158 | 77,158 | |||
Total assets acquired and liabilities assumed | 1,376,509 | 1,376,509 | |||
Cash paid at acquisition date | 1,026,509 | 1,026,509 | |||
Contingent consideration promissory note | 350,000 | 350,000 | |||
Total acquisition purchase price | $ 1,376,509 | $ 1,376,509 | |||
Medical Billing Acquisition [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Tangible assets acquired | $ 401,547 | ||||
Goodwill | 2,920,000 | ||||
Total assets acquired and liabilities assumed | 2,920,000 | ||||
Cash paid at acquisition date | 2,270,000 | ||||
Contingent consideration promissory note | 650,000 | ||||
Total acquisition purchase price | 2,920,000 | ||||
Liabilities assumed pursuant to stock purchase agreement | $ (401,547) | ||||
Medical Billing Acquisition One [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Tangible assets acquired | $ 190,631 | ||||
Goodwill | 2,100,000 | ||||
Total assets acquired and liabilities assumed | 1,903,626 | ||||
Cash paid at acquisition date | 1,153,626 | ||||
Contingent consideration promissory note | 750,000 | ||||
Total acquisition purchase price | 1,903,626 | ||||
Liabilities assumed pursuant to stock purchase agreement | $ (387,005) | ||||
Medical Billing Acquisition Two [Member] | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Intangible assets acquired – client agreements | $ 335,000 | ||||
Total assets acquired and liabilities assumed | 335,000 | ||||
Cash paid at acquisition date | 230,000 | ||||
Contingent consideration promissory note | 105,000 | ||||
Total acquisition purchase price | $ 335,000 |
DIGITAL ALLY HEALTHCARE VENTU_3
DIGITAL ALLY HEALTHCARE VENTURE (Details Narrative) - USD ($) | 6 Months Ended | ||||||||
Jun. 30, 2022 | Feb. 01, 2022 | Jan. 01, 2022 | Aug. 31, 2021 | Jun. 30, 2021 | Jun. 04, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | |||||||||
Debt principal amount | $ 150,000 | $ 150,000 | $ 150,000 | ||||||
Increase in accounts receivable | $ (721,540) | $ (817,077) | |||||||
Healthcare Acquisition [Member] | |||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||
Aggregate purchase price | $ 1,376,509 | $ 1,376,509 | |||||||
Medical Billing Acquisition [Member] | |||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||
Aggregate purchase price | $ 2,920,000 | ||||||||
Medical Billing Acquisition One [Member] | |||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||
Aggregate purchase price | $ 1,903,626 | ||||||||
Medical Billing Acquisition Two [Member] | |||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||
Aggregate purchase price | $ 335,000 | ||||||||
Nobility LLC [Member] | |||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||
Venture capitalization amount | $ 13,500,000 | ||||||||
Ownership description | Digital Ally Healthcare owns 51% of the venture that entitles it to 51% of the distributable cash as defined in the venture’s operating agreement plus a cumulative preferred return of 10% per annum on its invested capital. Nobility will receive a management fee and 49% of the distributable cash, subordinated to Digital Ally Healthcare’s preferred return | ||||||||
Nobility LLC [Member] | Healthcare Acquisition [Member] | |||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||
Initial Payment Amount | 850,000 | ||||||||
Fair value of contingent promissory note | $ 317,212 | ||||||||
Aggregate purchase price | 1,376,509 | ||||||||
Acquisition related costs | 7,996 | 164,630 | 164,630 | ||||||
Increase in accounts receivable | 75,000 | ||||||||
Nobility LLC [Member] | Healthcare Acquisition [Member] | Promissory Note [Member] | |||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||
Debt principal amount | 350,000 | $ 350,000 | |||||||
Repayments of principal and accrued interest | $ 162,552 | ||||||||
Nobility LLC [Member] | Medical Billing Acquisition [Member] | |||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||
Initial Payment Amount | 2,270,000 | ||||||||
Aggregate purchase price | 2,920,000 | ||||||||
Acquisition related costs | 5,602 | ||||||||
Nobility LLC [Member] | Medical Billing Acquisition [Member] | Promissory Note [Member] | |||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||
Debt principal amount | $ 650,000 | ||||||||
Nobility LLC [Member] | Medical Billing Acquisition One [Member] | |||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||
Initial Payment Amount | 1,153,626 | ||||||||
Aggregate purchase price | 1,903,626 | ||||||||
Nobility LLC [Member] | Medical Billing Acquisition One [Member] | Promissory Note [Member] | |||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||
Debt principal amount | $ 750,000 | ||||||||
Nobility LLC [Member] | Medical Billing Acquisition Two [Member] | |||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||
Initial Payment Amount | 230,000 | ||||||||
Aggregate purchase price | 335,000 | ||||||||
Acquisition related costs | 10,322 | ||||||||
Nobility LLC [Member] | Medical Billing Acquisition Two [Member] | Promissory Note [Member] | |||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||
Debt principal amount | $ 105,000 |
SCHEDULE OF PRELIMINARY FAIR _2
SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED ACQUISITION (Details) - Ticket Smarter Acquisition [Member] - USD ($) | 1 Months Ended | ||
Dec. 31, 2021 | Sep. 30, 2021 | Sep. 01, 2021 | |
Business Acquisition [Line Items] | |||
Tangible assets acquired, including $51,432 of cash acquired | $ 5,748,291 | $ 7,139,930 | |
Identifiable intangible assets acquired | 6,800,000 | ||
Goodwill | 5,886,547 | 11,839,308 | |
Liabilities assumed | (5,128,964) | (5,128,964) | |
Net assets acquired and liabilities assumed | 13,305,874 | 13,850,274 | |
Cash paid at TicketSmarter Acquisition date | 8,413,240 | 8,413,240 | |
Common stock issued as consideration for TicketSmarter Acquisition at date of acquisition | 990,360 | 990,360 | |
Contingent consideration earn-out agreement | 3,700,000 | 4,244,400 | |
Cash paid at closing to escrow amount | 500,000 | 500,000 | $ 500,000 |
Cash retained from escrow amount pursuant to settlement of working capital target | 297,726 | 297,726 | |
Total TicketSmarter Acquisition purchase price | $ 13,305,874 | $ 13,850,274 |
SCHEDULE OF PRELIMINARY FAIR _3
SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED ACQUISITION (Details) (Parenthetical) | Sep. 30, 2021 USD ($) |
Business Combination and Asset Acquisition [Abstract] | |
Cash Acquired from Acquisition | $ 51,432 |
SCHEDULE OF COMPONENTS OF IDENT
SCHEDULE OF COMPONENTS OF IDENTIFIABLE INTANGIBLE ASSETS ACQUIRED AND ESTIMATED USEFUL LIVES (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 10 Months Ended | |||
Sep. 01, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | |
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Identifiable intangible assets | $ 6,800,000 | |||||
Amortization | $ 358,944 | $ 27,483 | $ 716,910 | $ 50,114 | $ 1,058,333 | |
Trademarks and Trade Names [Member] | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Identifiable intangible assets | 600,000 | |||||
Amortization | ||||||
Sponsorship Agreement Network [Member] | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Identifiable intangible assets | $ 5,600,000 | |||||
Amortization | 933,333 | |||||
Estimated useful life | 5 years | |||||
Search Engine Optimization [Member] | ||||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||||
Identifiable intangible assets | $ 600,000 | |||||
Amortization | $ 125,000 | |||||
Estimated useful life | 4 years |
TICKETSMARTER ACQUISITION (Deta
TICKETSMARTER ACQUISITION (Details Narrative) - Ticket Smarter Acquisition [Member] - USD ($) | Sep. 01, 2021 | Jan. 01, 2021 | Dec. 31, 2021 | Sep. 30, 2021 |
Business Acquisition [Line Items] | ||||
Initial Payment Amount | $ 9,403,600 | |||
Contingent amount | $ 3,700,000 | $ 4,244,400 | ||
Amount in escrow | 500,000 | 500,000 | $ 500,000 | |
Working capital adjustment | $ 297,726 | |||
Escrow amount to sellers | 202,274 | |||
Acquisition related costs | $ 40,625 | |||
Promissory Note [Member] | ||||
Business Acquisition [Line Items] | ||||
Contingent amount | $ 4,244,400 | |||
Fair value on acquisition | $ 3,700,000 |
SCHEDULE OF SEGMENT REPORTING (
SCHEDULE OF SEGMENT REPORTING (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||||
Total Net Revenues | $ 9,351,457 | $ 2,493,671 | $ 19,646,238 | $ 5,029,501 | |
Total Gross Profit | 1,719,078 | 1,260,800 | 3,658,696 | 2,072,683 | |
Total Operating Income (Loss) | (6,661,252) | (2,616,884) | (13,464,590) | (5,482,578) | |
Total Depreciation and Amortization | 528,835 | 87,830 | 1,024,238 | 145,459 | |
Total Identifiable Assets | 70,728,821 | 70,728,821 | $ 82,989,197 | ||
Video Solutions [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Net Revenues | 2,049,756 | 2,493,671 | 4,059,805 | 5,029,501 | |
Total Gross Profit | 759,010 | 1,260,800 | 1,027,440 | 2,072,683 | |
Total Operating Income (Loss) | (1,130,749) | (296,601) | (2,846,004) | (979,520) | |
Total Depreciation and Amortization | 209,442 | 87,830 | 385,516 | 145,459 | |
Total Identifiable Assets | 35,219,240 | 35,219,240 | 25,983,348 | ||
Revenue Cycle Management [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Net Revenues | 2,120,738 | 4,024,695 | |||
Total Gross Profit | 957,263 | 1,654,432 | |||
Total Operating Income (Loss) | 247,301 | 118,783 | |||
Total Depreciation and Amortization | 319,175 | 638,358 | |||
Total Identifiable Assets | 1,678,775 | 1,678,775 | 934,095 | ||
Ticketing [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Net Revenues | 5,180,963 | 11,561,738 | |||
Total Gross Profit | 2,805 | 976,824 | |||
Total Operating Income (Loss) | (2,320,694) | (3,766,541) | |||
Total Depreciation and Amortization | 218 | 364 | |||
Total Identifiable Assets | 10,097,319 | 10,097,319 | 12,260,780 | ||
Corporate Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total Operating Income (Loss) | (3,457,110) | $ (2,320,283) | (6,970,828) | $ (4,503,058) | |
Total Identifiable Assets | $ 23,733,487 | $ 23,733,487 | $ 43,810,974 |
SEGMENT DATA (Details Narrative
SEGMENT DATA (Details Narrative) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Segment Reporting Information [Line Items] | ||
Reserve for excess | $ 3,272,832 | $ 3,353,458 |
Obsolete inventory | 449,635 | $ 561,631 |
Video Solutions [Member] | ||
Segment Reporting Information [Line Items] | ||
Reserve for excess | 3,272,831 | |
Ticketing [Member] | ||
Segment Reporting Information [Line Items] | ||
Obsolete inventory | $ 449,635 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||
Distributions paid | $ 15,692 | |
Nobility LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Working capital loan | $ 138,384 | $ 158,384 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - $ / shares | Jul. 07, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Subsequent Event [Line Items] | |||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Common Stock, Par or Stated Value Per Share | $ 0.001 | ||
Share price | $ 1 |