Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2023 | May 15, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2023 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2023 | |
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, $0.001 par value per share | |
Trading Symbol | DGLY | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 2,755,224 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 2,859,723 | $ 3,532,199 |
Accounts receivable – trade, net of $181,761 allowance – March 31, 2023 and $146,964 – December 31, 2022 | 2,199,255 | 2,044,056 |
Other receivables, net of $5,000 allowance – March 31, 2023 and $0 – December 31, 2022 (including $138,384 due from related parties – March 31, 2023 and $138,384 – December 31, 2022, refer to Note 20) | 2,592,046 | 4,076,522 |
Inventories, net | 5,921,079 | 6,839,406 |
Prepaid expenses | 7,782,010 | 8,466,413 |
Total current assets | 21,354,113 | 24,958,596 |
Property, plant, and equipment, net | 7,750,712 | 7,898,686 |
Goodwill and other intangible assets, net | 17,548,479 | 17,872,970 |
Operating lease right of use assets, net | 1,189,053 | 782,129 |
Other assets | 7,600,887 | 5,155,681 |
Total assets | 55,443,244 | 56,668,062 |
Current liabilities: | ||
Accounts payable | 12,487,267 | 9,477,355 |
Accrued expenses | 905,991 | 1,090,967 |
Current portion of operating lease obligations | 287,520 | 294,617 |
Contract liabilities – current portion | 2,624,870 | 2,154,874 |
Debt obligations – current portion | 1,102,943 | 485,373 |
Income taxes payable | 8,097 | 8,097 |
Total current liabilities | 17,416,688 | 13,511,283 |
Long-term liabilities: | ||
Debt obligations – long term | 254,944 | 442,467 |
Operating lease obligation – long term | 969,728 | 555,707 |
Contract liabilities – long term | 6,315,647 | 5,818,082 |
Lease Deposit | 10,445 | |
Total liabilities | 24,967,452 | 20,327,539 |
Commitments and contingencies | ||
Stockholders’ Equity: | ||
Common stock, $0.001 par value per share; 200,000,000 shares authorized; shares issued: 2,755,224 shares issued – March 31, 2023 and 2,720,170 shares issued – December 31, 2022 | 2,756 | 2,721 |
Additional paid in capital | 127,984,155 | 127,869,342 |
Noncontrolling interest in consolidated subsidiary | 574,933 | 448,694 |
Accumulated deficit | (98,086,052) | (91,980,234) |
Total stockholders’ equity | 30,475,792 | 36,340,523 |
Total liabilities and stockholders’ equity | $ 55,443,244 | $ 56,668,062 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Related Party Transaction [Line Items] | ||
Allowance for doubtful accounts receivable | $ 181,761 | $ 146,964 |
Allowance for other receivable, current | $ 5,000 | $ 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 2,755,224 | 2,720,170 |
Related Party [Member] | ||
Related Party Transaction [Line Items] | ||
Other receivables net current | $ 138,384 | $ 138,384 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue: | ||
Total revenue | $ 7,697,190 | $ 10,294,781 |
Cost of revenue: | ||
Total cost of revenue | 6,152,398 | 8,355,162 |
Gross profit | 1,544,792 | 1,939,619 |
Selling, general and administrative expenses: | ||
Research and development expense | 934,939 | 498,000 |
Selling, advertising and promotional expense | 1,847,489 | 2,779,404 |
General and administrative expense | 4,935,170 | 5,465,553 |
Total selling, general and administrative expenses | 7,717,598 | 8,742,957 |
Operating loss | (6,172,806) | (6,803,338) |
Other income (expense): | ||
Interest income | 15,477 | 71,362 |
Interest expense | (5,664) | (17,009) |
Other income | 25,393 | 43,440 |
Change in fair value of contingent consideration promissory notes | 158,021 | (56,050) |
Change in fair value of short-term investments | (84,818) | |
Change in fair value of warrant derivative liabilities | 148,171 | |
Total other income | 193,227 | 105,096 |
Income (loss) before income tax benefit | (5,979,579) | (6,698,242) |
Income tax benefit | ||
Net loss | (5,979,579) | (6,698,242) |
Net (income) loss attributable to noncontrolling interests of consolidated subsidiary | (126,239) | 98,094 |
Net loss attributable to common stockholders | $ (6,105,818) | $ (6,600,148) |
Net loss per share information: | ||
Basic | $ (2.22) | $ (2.59) |
Diluted | $ (2.22) | $ (2.59) |
Weighted average shares outstanding: | ||
Basic | 2,751,662 | 2,546,552 |
Diluted | 2,751,662 | 2,546,552 |
Product [Member] | ||
Revenue: | ||
Total revenue | $ 2,453,810 | $ 2,410,060 |
Cost of revenue: | ||
Total cost of revenue | 2,301,100 | 2,822,051 |
Service, Other [Member] | ||
Revenue: | ||
Total revenue | 5,243,380 | 7,884,721 |
Cost of revenue: | ||
Total cost of revenue | $ 3,851,298 | $ 5,533,111 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock, Preferred [Member] | Noncontrolling Interest [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2021 | $ 2,545 | $ 124,476,447 | $ 56,453 | $ (68,672,206) | $ 55,863,239 | |
Balance, shares at Dec. 31, 2021 | 2,545,220 | |||||
Stock-based compensation | 394,749 | 394,749 | ||||
Restricted common stock grant | $ 36 | (36) | ||||
Restricted common stock grant, shares | 35,750 | |||||
Restricted common stock forfeitures | $ (1) | 1 | ||||
Restricted common stock forfeitures, shares | (750) | |||||
Repurchase and cancellation of common stock | $ (94) | (2,063,674) | (2,063,768) | |||
Repurchase and cancellation of common stock, shares | (93,802) | |||||
Distribution to noncontrolling interest in consolidated subsidiary | (15,692) | (15,692) | ||||
Net income (loss) | (98,094) | (6,600,148) | (6,698,242) | |||
Balance at Mar. 31, 2022 | $ 2,486 | 124,871,161 | (57,333) | (77,336,028) | 47,480,286 | |
Balance, shares at Mar. 31, 2022 | 2,486,418 | |||||
Balance at Dec. 31, 2022 | $ 2,721 | 127,869,342 | 448,694 | (91,980,234) | 36,340,523 | |
Balance, shares at Dec. 31, 2022 | 2,720,170 | |||||
Stock-based compensation | 114,848 | 114,848 | ||||
Restricted common stock grant | $ 35 | (35) | ||||
Restricted common stock grant, shares | 35,000 | |||||
Net income (loss) | 126,239 | (6,105,818) | (5,979,579) | |||
Issuance due to rounding from reverse stock split | ||||||
Balance at Mar. 31, 2023 | $ 2,756 | $ 127,984,155 | $ 574,933 | $ (98,086,052) | $ 30,475,792 | |
Balance, shares at Mar. 31, 2023 | 2,755,224 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Cash Flows from Operating Activities: | |||
Net loss | $ (5,979,579) | $ (6,698,242) | |
Adjustments to reconcile net loss to net cash flows used in operating activities: | |||
Depreciation and amortization | 543,110 | 493,395 | |
Stock-based compensation | 114,848 | 394,749 | |
Change in fair value of warrant derivative liabilities | (148,171) | ||
Provision for inventory obsolescence | 80,434 | 18,629 | |
Provision for doubtful accounts receivable | 29,025 | (150,636) | |
Provision for doubtful lease receivable | 5,000 | ||
Change in fair value of contingent consideration promissory note | (158,021) | 56,050 | |
(Increase) decrease in: | |||
Accounts receivable – trade | (211,201) | (744,521) | |
Accounts receivable – other | 1,479,476 | 41,928 | |
Inventories | 837,893 | 234,987 | |
Prepaid expenses | 684,403 | (512,817) | |
Operating lease right of use assets | 110,115 | 102,165 | |
Other assets | (2,445,206) | (2,529,277) | |
Accounts payable | 3,009,912 | 2,958,343 | |
Accrued expenses | (184,976) | (142,043) | |
Operating lease obligations | (110,115) | (102,164) | |
Income taxes payable | 15,000 | ||
Lease deposit | 10,445 | ||
Contract liabilities | 967,561 | 656,953 | |
Net cash used in operating activities | (1,216,876) | (6,055,672) | |
Cash Flows from Investing Activities: | |||
Purchases of furniture, fixtures and equipment | (23,657) | (1,774,592) | |
Additions to intangible assets | (46,988) | (37,127) | |
Cash paid for acquisition of Medical Billing Company | (1,153,627) | ||
Cash paid for asset acquisition from Medical Billing Company | (230,000) | ||
Net cash used in investing activities | (70,645) | (3,195,346) | |
Cash Flows from Financing Activities: | |||
Repurchase and cancellation of common stock | (2,063,768) | ||
Distribution to noncontrolling interest in consolidated subsidiary | (15,692) | ||
Proceeds-Commercial Extension of Credit – Entertainment Segment | 1,000,000 | ||
Payments on Commercial Extension of Credit – Entertainment Segment | (264,166) | ||
Principal payment on contingent consideration promissory notes | (120,789) | (116,198) | |
Net cash provided by (used in) financing activities | 615,045 | (2,195,658) | |
Net decrease in cash and cash equivalents | (672,476) | (11,446,676) | |
Cash, cash equivalents, beginning of period | 3,532,199 | 32,007,792 | $ 32,007,792 |
Cash, cash equivalents, end of period | 2,859,723 | 20,561,116 | $ 3,532,199 |
Supplemental disclosures of non-cash investing and financing activities: | |||
Cash payments for interest | 6,348 | 18,847 | |
Cash payments for income taxes | 9,969 | ||
Restricted common stock grant | 35 | 715 | |
Restricted common stock forfeitures | 15 | ||
Issuance of contingent consideration promissory note for business and asset acquisitions | 855,000 | ||
Assets acquired in business acquisitions | 190,631 | ||
Goodwill acquired in business acquisitions | 2,100,000 | ||
Liabilities assumed in business acquisitions | 387,005 | ||
Commercial Extension of Credit repaid through accrued revenue – Entertainment Segment | 26,977 | ||
ROU and lease liability recorded on extension of lease | $ 517,039 |
NATURE OF BUSINESS AND SUMMARY
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2023 | |
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. (such merged entity, the “Predecessor Registrant”). On August 23, 2022 (the “ Effective Time Predecessor Registrant Registrant Merger Agreement Merger At the Effective Time, pursuant to the Merger Agreement, (i) each outstanding share of Predecessor Registrant’s common stock, par value $ 0.001 Predecessor Common Stock 0.001 Registrant Common Stock The business of the Registrant, 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., BirdVu Jets, 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 Entertainment 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 Entertainment Segment acts as an intermediary between ticket buyers and sellers within our secondary ticketing platform, ticketsmarter.com, and we also acquire tickets from primary sellers to then sell through various platforms. The 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 19. Spin-off: On December 8, 2022, the Company announced that its Board of Directors unanimously approved a plan to pursue a separation into two independent, publicly-traded companies to optimize investment and capital allocation, accelerate growth, and unlock shareholder value. Specifically, the Company plans to spin off (the “Spin-off”) its ticketing operating segment, Kustom Entertainment, Inc. (“Kustom”). Upon completion of the Spin-off, the Company’s stockholders will own equity in two focused and streamlined businesses. Digital Ally, Inc. will continue to be a provider of video solution technology for law enforcement agencies, commercial fleets, and situational event security solutions. Digital Ally will also continue to provide working capital and back-office services to a variety of healthcare organizations throughout the country through its revenue cycle management subsidiary. For the year ending December 31, 2022, these consolidated businesses generated approximately $ 37.0 As an independent company, we believe that Digital Ally, Inc. will have greater strategic focus and operational flexibility, while building on its recent momentum and emphasizing the improvement of its profit margins and profitability. Additionally, the Company expects to benefit from dedicated resources and management, with an attention to brand building, innovation, and extended opportunities domestically as well as internationally. As Digital Ally has continued to build its portfolio of subscriptions and customers that are already in place, we believe that we can continue to maintain stable sales through our deferred revenue model; however, there will be an equal expectation for growth and expansion across several high-growth adjacent markets. Upon completion of the Spin-off, Digital Ally, Inc. will be led by Brody J. Green, who will serve as Chief Executive Officer. The Company intends to continue to be listed on the NASDAQ under its current ticker symbol, “DGLY”. Kustom will be a multi-disciplinary entertainment company, anchored by a premier ticketing technology business, which we believe is poised to achieve substantial scaling opportunities, through its TicketSmarter, Inc. subsidiary, which offers unique primary and secondary ticketing products to the market. Additionally, Kustom’s offerings will include a distinctive event marketing and production company, with numerous customization options for events, festivals, and concerts, through its Kustom 440, Inc., subsidiary. For the year ending December 31, 2022, these standalone businesses achieved approximately $20.9 million in annual revenues. We believe that this business can achieve above-average growth by exploiting its relationships in the sporting and entertainment industries that are intended to support its primary ticketing-related opportunities, along with the expectation of the full deployment of the Kustom 440 brand and its line of service offerings. Kustom will be able to differentiate itself through its ability to provide event services of all sizes, ranging from corporate events to multi-day festivals. Furthermore, the ability to offer venue, ticketing, marketing, and production capabilities will make this company a unique and attractive option for many partners and investors. With the planned separation, TicketSmarter is expected to enhance its leadership position in the national secondary ticketing marketplace, while also building a stronger position in the primary ticketing market. Furthermore, as Kustom 440 was formed in mid-2022, the event marketing and production business will be fully able to execute and produce the planned events throughout 2023, as production and investments have already begun. Kustom will be led by Stanton E. Ross, who will serve as the President and Chief Executive Officer. Kustom’s shares are expected to be listed on a national exchange under a ticker symbol to be determined and announced at a later date. The Company may also pursue an alternative disposition of Kustom instead of the Spin-Off. The Spin-Off or alternative transaction is expected to be completed in the second half of 2023. 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 month period ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. The balance sheet at December 31, 2022 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, 2022. Liquidity and Going Concern During the second quarter of 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This update provided U.S. GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. Under this standard, the Company is required to evaluate whether there is substantial doubt about its ability to continue as a going concern each reporting period, including interim periods. In evaluating the Company’s ability to continue as a going concern, management considered the conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern within 12 months after the Company’s financial statements were issued (May 15, 2023). Management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and the Company’s obligations due before May 15, 2024. The Company has experienced net losses and cash outflows from operating activities since inception. For the three months ended March 31, 2023, the Company had a net loss attributable to common stockholders of $ 6,105,818 1,216,876 70,645 615,045 provided The Company has implemented an enhanced quality control program to detect and correct product issues before they result in significant rework expenditures affecting its gross margins and has seen progress in that regard. The Company has also implemented a marketing and advertisement reduction plan for its entertainment segment, which will focus on reducing and alleviating current obligations from its media marketing agreements and place a hold on entering into any new agreements. The Company believes that its quality control, cost-cutting initiatives, and new product introduction will eventually restore positive operating cash flows and profitability, although it can offer no assurances in this regard. Management has evaluated the significance of the conditions described above in relation to the Company’s ability to meet its obligations and concluded that, without additional funding, the Company will not have sufficient funds to meet its obligations within one year from the date the unaudited condensed consolidated financial statements were issued. 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., BirdVu Jets, 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. The Company formed TicketSmarter, Inc. on September 1, 2021, upon its acquisition of Goody Tickets, LLC and TicketSmarter, LLC, to facilitate its global entertainment operations. The Company formed Worldwide Reinsurance Ltd. in December 2021, 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. and BirdVu Jets, 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 entertainment 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 customer contracts. In situations where sales are to a distributor, the Company has concluded that such contracts are with the distributor as in such cases the Company holds 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 is 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. Entertainment The Company reports entertainment 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 entertainment 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 March 31, 2023, the Company recognized revenue of $ 0.5 SCHEDULE OF CONTRACT LIABILITIES March 31, 2023 December 31, Additions/Reclass Recognized Revenue March 31, Contract liabilities, current $ 2,154,874 $ 562,809 $ 92,813 $ 2,624,870 Contract liabilities, non-current 5,818,082 868,211 370,646 6,315,647 $ 7,972,956 $ 1,431,020 $ 463,459 $ 8,940,517 March 31, 2022 December 31, Additions/Reclass Recognized Revenue March 31, Contract liabilities, current $ 1,665,519 $ 280,375 $ 157,173 $ 1,788,721 Contract liabilities, non-current 2,687,786 897,438 363,687 3,221,537 $ 4,353,305 $ 1,177,813 $ 520,860 $ 5,010,258 Sales returns and allowances aggregated $ 116,642 118,027 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 March 31, 2023 Adjusted Realized Realized Fair Value Demand deposits $ 339,933 $ — $ — $ 339,933 Short-term investments with original maturities of 90 days or less (Level 1) (1) Money market funds 2,519,790 — — 2,519,790 $ 2,859,723 $ — $ — $ 2,859,723 December 31, 2022 Adjusted Unrealized Unrealized Fair Value Demand deposits $ 897,745 $ — $ — $ 897,745 Short-term investments with original maturities of 90 days or less (Level 1) (1) Money market funds 2,634,454 — — 2,634,454 $ 3,532,199 $ — $ — $ 3,532,199 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 2,021,428 2,495,189 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 the market approach. Under the market approach, we estimate the fair value based on multiples of comparable public companies and precedent transactions. Significant estimates in the market approach include: identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment, and assessing comparable revenue and operating income multiples in estimating the fair value of the reporting unit. 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 March 31, 2023 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 represent the interest in subsidiaries held by our venture partner. The venture partner holds a noncontrolling interest 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 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. As such, we adopted ASC 326 effective January 1, 2023. The adoption of this standard did not have a significant impact on the Company’s financial position and results of operations. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 2. INVENTORIES Inventories consisted of the following at March 31, 2023 and December 31, 2022: SCHEDULE OF INVENTORIES March 31, 2023 December 31, 2022 Raw material and component parts– video solutions segment $ 3,923,281 $ 4,509,165 Work-in-process– video solutions segment 11,665 3,164 Finished goods – video solutions segment 6,558,625 6,846,091 Finished goods – entertainment segment 836,615 970,527 Subtotal 11,330,186 12,328,947 Reserve for excess and obsolete inventory– video solutions segment (5,089,903 ) (5,230,261 ) Reserve for excess and obsolete inventory – entertainment segment (319,204 ) (259,280 ) Total inventories $ 5,921,079 $ 6,839,406 Finished goods inventory includes units held by potential customers and sales agents for test and evaluation purposes. The cost of such units totaled $ 173,630 171,071 |
DEBT OBLIGATIONS
DEBT OBLIGATIONS | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
DEBT OBLIGATIONS | NOTE 3. DEBT OBLIGATIONS Debt obligations is comprised of the following: SUMMARY OF DEBT OBLIGATIONS March 31, 2023 December 31, 2022 Economic injury disaster loan (EIDL) $ 150,000 $ 150,000 Contingent consideration promissory note – Nobility Healthcare Division Acquisition 324,129 388,955 Contingent consideration promissory note – Nobility Healthcare Division Acquisition 147,047 176,456 Contingent consideration promissory note – Nobility Healthcare Division Acquisition 6,926 208,083 Contingent consideration promissory note – Nobility Healthcare Division Acquisition 20,928 4,346 Commercial Extension of Credit – Entertainment Segment 708,857 — Debt obligations 1,357,887 927,840 Less: current maturities of debt obligations 1,102,943 485,373 Debt obligations, long-term $ 254,944 $ 442,467 Debt obligations mature as follows as of March 31, 2023: SCHEDULE OF MATURITY OF DEBT OBLIGATIONS March 31, 2023 2023 (April 1, 2023 to December 31, 2023) $ 1,005,718 2024 207,673 2025 3,412 2026 3,542 2027 and thereafter 137,542 Total $ 1,357,887 2020 Small Business Administration Notes 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-year 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 $ 350,000 143,026 147,047 29,409 no 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-year 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 $ 650,000 357,779 324,129 64,826 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 $ 750,000 146,843 6,926 175,146 175,146 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-year 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 $ 105,000 543 20,928 17,125 17,125 2023 Commercial Extension of Credit On February 23, 2023, the Company’s Entertainment segment entered into an extension of credit in the form of a loan to use in marketing and operating its business in accordance with the Private Label Agreement previously entered into with the Lender. The Lender agreed to extend, subject to the conditions hereof, and Borrower agreed to take, a Loan for Principal Sum of $ 1,000,000 Lender shall retain 25% of each remittance owed to Borrower under the terms of the Private Label Agreement. Such remittances shall include regular weekly remittances and any additional incentive payments to which the Borrower may be entitled. The 25% withholding of the Borrower’s applicable remittance shall be deemed a “Payment” under the terms of this Note, and Payments shall continue until the earlier of (i) repayment of the Principal Sum, accrued Interest, and a fee of $35,000.00 or (ii) expiration of the Private Label Agreement on December 31, 2023 As of the three months ended March 31, 2023, the Company’s Entertainment segment had repaid $ 291,143 708,857 |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 3 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023 and December 31, 2022: SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS Level 1 Level 2 Level 3 Total March 31, 2023 Level 1 Level 2 Level 3 Total Liabilities: Contingent consideration promissory notes and contingent consideration earn-out agreement — — $ 499,029 $ 499,029 Liabilities, fair value $ — $ — $ 499,029 $ 499,029 Level 1 Level 2 Level 3 Total December 31, 2022 Level 1 Level 2 Level 3 Total Liabilities: Contingent consideration promissory notes and contingent consideration earn-out agreement — — $ 777,840 $ 777,840 Liabilities, fair value $ — $ — $ 777,840 $ 777,840 The following table represents the change in Level 3 tier value measurements for the three months ended March 31, 2023: SCHEDULE OF FAIR VALUE MEASUREMENTS CHANGE IN LEVEL 3 INPUTS Contingent Consideration Promissory Notes Balance, December 31, 2022 $ 777,840 Principal payments on contingent consideration promissory notes – Revenue Cycle Management Acquisitions (120,789 ) Change in fair value of contingent consideration promissory notes – Revenue Cycle Management Acquisitions (158,022 ) Balance, March 31, 2023 $ 499,029 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | NOTE 5. ACCRUED EXPENSES Accrued expenses consisted of the following at March 31, 2023 and December 31, 2022: SCHEDULE OF ACCRUED EXPENSES March 31, 2023 December 31, 2022 Accrued warranty expense $ 19,261 $ 15,694 Accrued litigation costs 247,984 247,984 Accrued sales commissions 59,075 55,000 Accrued payroll and related fringes 316,114 504,020 Accrued sales returns and allowances 116,643 118,026 Accrued taxes 50,727 46,408 Other 96,187 103,835 Total accrued expenses $ 905,991 $ 1,090,967 Accrued warranty expense was comprised of the following for the three months ended March 31, 2023: SCHEDULE OF ACCRUED WARRANTY EXPENSE Beginning balance $ 15,694 Provision for warranty expense 20,708 Charges applied to warranty reserve (17,141 ) Ending balance $ 19,261 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 6. INCOME TAXES The effective tax rate for the three months ended March 31, 2023 and 2022 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 March 31, 2023. 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 is determined to continue to provide a 100 113.3 |
PREPAID EXPENSES
PREPAID EXPENSES | 3 Months Ended |
Mar. 31, 2023 | |
Prepaid Expenses | |
PREPAID EXPENSES | NOTE 7. PREPAID EXPENSES Prepaid expenses were the following at March 31, 2023 and December 31, 2022: SCHEDULE OF PREPAID EXPENSE March 31, 2023 December 31, 2022 Prepaid inventory $ 5,925,548 $ 6,110,321 Prepaid advertising 1,397,068 1,931,628 Other 459,394 424,464 Total prepaid expenses $ 7,782,010 $ 8,466,413 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 8. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following at March 31, 2023 and December 31, 2022: SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT Estimated March 31, 2023 December 31, 2022 Building 25 $ 4,537,037 $ 4,537,037 Land Infinite 739,734 739,734 Office furniture, fixtures, equipment, and aircraft 3 20 2,072,295 2,048,169 Warehouse and production equipment 3 7 51,302 51,302 Demonstration and tradeshow equipment 3 7 72,341 72,341 Building improvements 5 7 1,334,374 1,334,374 Total cost 8,807,083 8,782,957 Less: accumulated depreciation and amortization (1,056,371 ) (884,271 ) Net property, plant and equipment $ 7,750,712 $ 7,898,686 Depreciation expense for the three months ended March 31, 2023 and March 31, 2022 was $ 171,631 135,438 |
OPERATING LEASE
OPERATING LEASE | 3 Months Ended |
Mar. 31, 2023 | |
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 forty-five 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 seven 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 sixteen 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 eighty-four-month 7,436 8,877 termination date of March 2030 eighty-four months On September 1, 2021, the Company completed the acquisition of Goody Tickets, LLC and TicketSmarter, LLC through TicketSmarter. Upon completion of this acquisition, the Company became responsible for the operating lease for TicketSmarter’s office space. The lease terms include monthly payments ranging from $ 7,211 7,364 termination date of December 2022 six-month 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 twenty-seven 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 $ 142,402 The weighted-average remaining lease term related to the Company’s lease liabilities as of March 31, 2023 was 4.8 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 March 31, 2023: SCHEDULE OF OPERATING LEASES RIGHT OF USE ASSETS AND LIABILITIES Assets: Operating lease right of use assets $ 1,189,053 Liabilities: Operating lease obligations-current portion $ 287,520 Operating lease obligations-less current portion 969,728 Total operating lease obligations $ 1,257,248 The components of lease expense were as follows for the three months ended March 31, 2023: SCHEDULE OF LEASE EXPENSE Selling, general and administrative expenses $ 142,402 Following are the minimum lease payments for each year and in total: SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS Year ending December 31: 2023 (April 1, to December 31, 2023) $ 291,559 2024 336,992 2025 290,417 2026 271,868 Thereafter 334,651 Total undiscounted minimum future lease payments 1,525,487 Imputed interest (268,239 ) Total operating lease liability $ 1,257,248 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023 and December 31, 2022: SCHEDULE OF INTANGIBLE ASSETS March 31, 2023 December 31, 2022 Gross Accumulated Net Gross Accumulated Net Amortized intangible assets: Licenses (video solutions segment) $ 211,183 $ 84,488 $ 126,695 $ 211,183 $ 80,378 $ 130,805 Patents and trademarks (video solutions segment) 472,077 328,412 143,665 472,077 305,021 167,056 Sponsorship agreement network (entertainment segment) 5,600,000 1,773,333 3,826,667 5,600,000 1,493,333 4,106,667 SEO content (entertainment segment) 600,000 237,500 362,500 600,000 200,000 400,000 Personal seat licenses (entertainment 180,081 9,502 170,579 180,081 8,001 172,080 Client agreements (revenue cycle management segments) 999,034 151,840 847,194 999,034 126,864 872,170 8,062,375 2,585,075 5,477,300 8,062,375 2,213,597 5,848,778 Indefinite life intangible assets: Goodwill (entertainment and revenue cycle management segments) 11,367,514 — 11,367,514 11,367,514 — 11,367,514 Trade name (entertainment segment) 600,000 — 600,000 600,000 — 600,000 Patents and trademarks pending 103,665 — 103,665 56,678 — 56,678 Total $ 20,133,554 $ 2,585,075 $ 17,548,479 $ 20,086,567 $ 2,213,597 $ 17,872,970 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 March 31, 2023 and 2022 was $ 371,478 357,966 SCHEDULE OF ESTIMATED AMORTIZATION FOR INTANGIBLE ASSETS Year ending December 31: 2023 (April 1, to December 31, 2023) $ 1,113,133 2024 1,432,808 2025 1,340,312 2026 856,330 2027 and thereafter 734,717 Total $ 5,477,300 |
OTHER ASSETS
OTHER ASSETS | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ASSETS | NOTE 11. OTHER ASSETS Other assets were the following at March 31, 2023 and December 31, 2022: SCHEDULE OF OTHER ASSETS March 31, 2023 December 31, 2022 Lease receivable $ 5,071,750 $ 4,700,923 Sponsorship network 2,149,520 116,828 Other 379,617 337,930 Total other assets $ 7,600,887 $ 5,155,681 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12. COMMITMENTS AND CONTINGENCIES 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 reevaluate 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 resolution is unknown, based on the information currently available, we do not expect that these lawsuits will individually, or in the aggregate, have a material adverse effect to our results of operations, financial condition or 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. Notice of Delisting On July 7, 2022, 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 was below $ 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 On February 23, 2023, the Company received notice from Nasdaq confirming that the Company has cured its bid price deficiency and has fully regained compliance with the Minimum Bid Price Requirement. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2023 | |
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 $ 114,848 394,749 As of March 31, 2023, the Company had adopted ten 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”), (ix) the 2020 Stock Option and Restricted Stock Plan (the “2020 Plan”), and (x) the 2022 Stock Option and Restricted Stock Plan (the “2022 Plan”). The 2005 Plan, 2006 Plan, 2007 Plan, 2008 Plan, 2011 Plan, 2013 Plan, 2015 Plan, 2018 Plan, 2020 Plan and 2022 Plan are referred to as the “Plans.” These Plans permit the grant of stock options or restricted stock to its employees, non-employee directors and others for up to a total of 333,750 1,078 284 531 4,733 no 2,025 Stock option grants. 137,042 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 three months ended March 31, 2023 is as follows: SUMMARY OF STOCK OPTIONS OUTSTANDING Options Number of Shares Weighted Average Exercise Price Outstanding at December 31, 2022 53,950 $ 45.80 Granted — — Exercised — — Forfeited (350 ) (83.20 ) Outstanding at March 31, 2023 53,600 $ 45.55 Exercisable at March 31, 2023 53,600 $ 45.55 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 three months ended March 31, 2023 and 2022. The aggregate intrinsic value of options outstanding was $- 0 0 0 0 As of March 31, 2023, 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 March 31, 2023: 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 49.99 37,000 7.4 37,000 7.4 $ 50.00 69.99 15,100 5.2 15,100 5.2 $ 70.00 89.99 1,500 3.1 1,500 3.1 53,600 6.6 53,600 6.6 Restricted stock grants. A summary of all restricted stock activity under the Plans for the three months ended March 31, 2023 is as follows: SUMMARY OF RESTRICTED STOCK ACTIVITY Number of Restricted shares Weighted average grant date Nonvested balance, December 31, 2022 79,125 $ 21.73 Granted 35,000 5.00 Vested (26,375 ) (35.83 ) Forfeited — — Nonvested balance, March 31, 2023 87,750 $ 10.82 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 March 31, 2023, there were $ 559,045 The nonvested balance of restricted stock vests as follows: SCHEDULE OF NON-VESTED BALANCE OF RESTRICTED STOCK Years ended Number of shares 2023 (April 1, 2023 through December 31, 2023) 30,375 2024 28,750 2025 20,000 2026 4,625 2027 2,500 2028 1,000 |
COMMON STOCK PURCHASE WARRANTS
COMMON STOCK PURCHASE WARRANTS | 3 Months Ended |
Mar. 31, 2023 | |
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 39,162 52.00 The warrants expire from April 3, 2023 through July 31, 2023 and under certain circumstances allow for cashless exercise. On January 14, 2021 and February 1, 2021, the Company issued warrants to purchase a total of 2,127,500 On August 19, 2021, the Company entered into a Warrant Exchange Agreement (the “Exchange Agreement”) with the Investors cancelling February Warrants exercisable for an aggregate of 384,077 384,077 330,923 September 18, 2026 65.00 On the date of the exchange, the 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 $ 65.00 $ 65.00 Common stock issuable under the warrants 715,000 715,000 On August 23, 2022, the Company entered into Warrant Exchange Agreements (the “Warrant Exchange Agreements”) with certain investors (the “Investors”), pursuant to which the Company agreed to issue to the Investors an aggregate of 303,750 8.1 9.3 1.2 4.5 3.6 Terms at Volatility - range 103.7 % Risk-free rate 3.17 3.36 % Dividend 0 % Remaining contractual term 3.4 4.1 Exercise price $ 65.00 Common stock issuable under the warrants 1,215,000 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 following table summarizes information about shares issuable under warrants outstanding during the three months ended March 31, 2023: SUMMARY OF WARRANT ACTIVITY Warrants Weighted average exercise price Vested Balance, January 1, 2023 67,459 $ 60.26 Granted — — Exercised — — Forfeited/cancelled (28,333 ) (67.20 ) Vested Balance, March 31, 2023 39,126 $ 55.24 The total intrinsic value of all outstanding warrants aggregated $- 0 four months 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 March 31, 2023: 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 $ 52.00 23,286 0.3 $ 60.00 15,840 0.1 39,126 0.2 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 15. STOCKHOLDERS’ EQUITY 2023 Issuance of Restricted Common Stock On January 10, 2023, the board of directors approved the grant of 22,500 Such shares will generally vest over a period of one to five years on their respective anniversary dates in January through January 2028, provided that each grantee remains an officer or employee on such dates. 12,500 one two years Reverse Stock Split On February 6, 2023, we filed a Certificate of Amendment to the Articles of Incorporation, as amended, with the Secretary of State of the State of Nevada to effect a 1-for-20 reverse stock split Noncontrolling Interests The Company owns a 51 49 126,239 98,094 |
NET EARNINGS (LOSS) PER SHARE
NET EARNINGS (LOSS) PER SHARE | 3 Months Ended |
Mar. 31, 2023 | |
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 months ended March 31, 2023 and 2022 are as follows: SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING AND LOSS PER SHARE OUTSTANDING Three months ended March 31, 2023 2022 Numerator for basic and diluted income (loss) per share – Net income (loss) $ (6,105,818 ) $ (6,600,148 ) Denominator for basic income (loss) per share – weighted average shares outstanding 2,751,662 2,546,552 Dilutive effect of shares issuable upon conversion of convertible debt and the exercise of stock options and warrants outstanding — — Denominator for diluted income (loss) per share – adjusted weighted average shares outstanding 2,751,662 2,546,552 Net income (loss) per share: Basic $ (2.22 ) $ (2.59 ) Diluted $ (2.22 ) $ (2.59 ) Basic income (loss) per share is based upon the weighted average number of common shares outstanding during the period. For the three months ended March 31, 2023 and 2022, 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 | 3 Months Ended |
Mar. 31, 2023 | |
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 11 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 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 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 IDENTIFIABLE INTANGIBLE ASSETS ACQUIRED AND THEIR ESTIMATED USEFUL LIVES Cost Amortization through Estimated Identifiable intangible assets: Client agreements $ 457,079 $ 79,989 10 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 preliminary and final 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 Preliminary As Final As Purchase price Preliminary As Final As Description September 30, September 30, Assets acquired: Tangible assets acquired $ 401,547 $ 401,547 Identifiable intangible assets acquired – client agreements — 206,955 Goodwill 2,920,000 2,713,045 Liabilities assumed pursuant to stock purchase agreement (401,547 ) (401,547 ) Net assets acquired and liabilities assumed $ 2,920,000 $ 2,920,000 Consideration: Cash paid at Healthcare Acquisition date $ 2,270,000 $ 2,270,000 Contingent consideration earn-out agreement 650,000 650,000 Total Healthcare Acquisition purchase price $ 2,920,000 $ 2,920,000 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 IDENTIFIABLE INTANGIBLE ASSET ACQUIRED AND THEIR ESTIMATED USEFUL LIVES Cost Amortization through Estimated Identifiable intangible assets: Client agreements $ 206,955 $ 32,768 10 For the period from the date of the Healthcare Acquisition to August 31, 2022, the Company adjusted its preliminary fair value estimates and estimated useful lives based upon information obtained through August 31, 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 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. There was no change from the preliminary estimated fair value to the final estimated fair value of assets acquired, and liabilities assumed in the Healthcare Acquisition, those value were as follows: SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION Description Final purchase price allocation 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 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 acquisition was structured as asset purchase and are included in the consolidated financial statements from the acquisition date. The preliminary 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 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 IDENTIFIABLE INTANGIBLE ASSETS ACQUIRED AND THEIR ESTIMATED USEFUL LIVES Cost Amortization through Estimated Identifiable intangible assets: Client agreements $ 335,000 $ 39,083 10 The change in fair value of the contingent consideration is more fully described in Note 10, “Debt Obligations” and will be estimated on a quarterly basis. |
TICKETSMARTER ACQUISITION
TICKETSMARTER ACQUISITION | 3 Months Ended |
Mar. 31, 2023 | |
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 entertainment 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 PARLIAMENT AND FINAL ESTIMATED FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED ACQUISITION As allocated As allocated Preliminary purchase price allocation As allocated As allocated Description September 30, 2021 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 ) Liabilities assumed pursuant to stock purchase agreement (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 ACCRUED AND ESTIMATED USEFUL LIVES Cost Amortization through Estimated useful life Identifiable intangible assets: Trademarks $ 600,000 $ — indefinite Sponsorship agreement network 5,600,000 1,773,333 5 Search engine optimization/content 600,000 237,500 4 $ 6,800,000 $ 2,010,833 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 months ended March 31, 2023. 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 | 3 Months Ended |
Mar. 31, 2023 | |
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 Entertainment, each of which has specific personnel responsible for that business and reports to the CODM. Corporate expenses capture the Company’s corporate administrative activities, is also to be reported in the segment information. The Company’s captive insurance subsidiary provides services to the Company’s other business segments and not to outside customers. Therefore, its operations are eliminated in consolidation and is not considered a separate business segment for financial reporting purposes. The Video Solutions Segment encompasses our law, commercial, and shield divisions. This segment includes both service and product revenues through our subscription models offering cloud and warranty solutions, and hardware sales for video and health safety solutions. The Revenue Cycle Management Segment provides working capital and back-office services to a variety of healthcare organizations throughout the country, as a monthly service fee. The Entertainment Segment acts as an intermediary between ticket buyers and sellers within our secondary ticketing platform, ticketsmarter.com, and we also acquire tickets from primary sellers to then sell through various platforms. The Company’s corporate administration activities are reported in the corporate line item. These activities primarily include expense related to certain corporate officers and support staff, certain accounting staff, expense related to the Company’s Board of Directors, stock option expense for options granted to corporate administration employees, certain consulting expenses, investor relations activities, and a portion of the Company’s legal, auditing and professional fee expenses. Corporate identifiable assets primarily consist of cash, invested cash (if any), refundable income taxes (if any), and deferred income taxes. Summarized financial information for the Company’s reportable business segments is provided for the indicated periods and as of March 31, 2023, and March 31, 2022: SCHEDULE OF SEGMENT REPORTING 2023 2022 Three Months Ended March 31, 2023 2022 Net Revenues: Video Solutions $ 1,899,364 $ 2,010,049 Revenue Cycle Management 1,781,590 1,903,957 Entertainment 4,016,236 6,380,775 Total Net Revenues $ 7,697,190 $ 10,294,781 Gross Profit: Video Solutions $ 534,195 $ 268,431 Revenue Cycle Management 775,934 697,169 Entertainment 234,663 974,019 Total Gross Profit $ 1,544,792 $ 1,939,619 Operating Income (loss): Video Solutions $ (1,963,186 ) $ (1,658,144 ) Revenue Cycle Management 103,765 (128,518 ) Entertainment (1,233,006 ) (1,445,847 ) Corporate (3,080,379 ) (3,570,829 ) Total Operating Income (Loss) $ (6,172,806 ) $ (6,803,338 ) Depreciation and Amortization: Video Solutions $ 198,122 $ 174,066 Revenue Cycle Management 25,507 146 Entertainment 319,481 319,183 Total Depreciation and Amortization $ 543,110 $ 493,395 March 31, 2023 December 31, 2022 Assets (net of eliminations): Video Solutions $ 30,802,197 $ 28,509,706 Revenue Cycle Management 2,720,079 2,201,570 Entertainment 8,741,754 11,190,491 Corporate 13,179,214 14,766,295 Total Identifiable Assets $ 55,443,244 $ 56,668,062 The segments recorded noncash items effecting the gross profit and operating income (loss) through the established inventory reserves based on estimates of excess and/or obsolete current and non-current inventory. The Company recorded a reserve for excess and obsolete inventory in the video solutions segment of $ 5,089,903 319,204 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 | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 20. RELATED PARTY TRANSACTIONS Transactions with Managing Member of Nobility Healthcare Nobility, LLC is currently the managing member of Nobility Healthcare, LLC. The Company has advanced a total of $ 158,384 138,384 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 21. SUBSEQUENT EVENTS Convertible Note On April 5, 2023, Digital Ally, Inc. (the “Company”) entered into and consummated the initial closing (the “First Closing”) of the transactions contemplated by a Securities Purchase Agreement, dated as of April 5, 2023 (the “Purchase Agreement”), between the Company and certain investors (the “Purchasers”). At the First Closing, the Company issued and sold to the Purchasers Senior Secured Convertible Notes in the aggregate original principal amount of $ 3,000,000 10 2,700,000 1,125,000 375,000 5.50 375,000 6.50 375,000 7.50 Subject to certain conditions, within 18 months from the Effectiveness Date (as defined below) and while the Notes remain outstanding, the Purchasers have the right to require the Company to consummate a second closing of up to an additional $ 3,000,000 The Notes are convertible into shares of Common Stock at the election of the Purchasers at any time at a fixed conversion price of $ 5.00 110 |
NATURE OF BUSINESS AND SUMMAR_2
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
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. (such merged entity, the “Predecessor Registrant”). On August 23, 2022 (the “ Effective Time Predecessor Registrant Registrant Merger Agreement Merger At the Effective Time, pursuant to the Merger Agreement, (i) each outstanding share of Predecessor Registrant’s common stock, par value $ 0.001 Predecessor Common Stock 0.001 Registrant Common Stock The business of the Registrant, 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., BirdVu Jets, 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 Entertainment 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 Entertainment Segment acts as an intermediary between ticket buyers and sellers within our secondary ticketing platform, ticketsmarter.com, and we also acquire tickets from primary sellers to then sell through various platforms. The 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 19. Spin-off: On December 8, 2022, the Company announced that its Board of Directors unanimously approved a plan to pursue a separation into two independent, publicly-traded companies to optimize investment and capital allocation, accelerate growth, and unlock shareholder value. Specifically, the Company plans to spin off (the “Spin-off”) its ticketing operating segment, Kustom Entertainment, Inc. (“Kustom”). Upon completion of the Spin-off, the Company’s stockholders will own equity in two focused and streamlined businesses. Digital Ally, Inc. will continue to be a provider of video solution technology for law enforcement agencies, commercial fleets, and situational event security solutions. Digital Ally will also continue to provide working capital and back-office services to a variety of healthcare organizations throughout the country through its revenue cycle management subsidiary. For the year ending December 31, 2022, these consolidated businesses generated approximately $ 37.0 As an independent company, we believe that Digital Ally, Inc. will have greater strategic focus and operational flexibility, while building on its recent momentum and emphasizing the improvement of its profit margins and profitability. Additionally, the Company expects to benefit from dedicated resources and management, with an attention to brand building, innovation, and extended opportunities domestically as well as internationally. As Digital Ally has continued to build its portfolio of subscriptions and customers that are already in place, we believe that we can continue to maintain stable sales through our deferred revenue model; however, there will be an equal expectation for growth and expansion across several high-growth adjacent markets. Upon completion of the Spin-off, Digital Ally, Inc. will be led by Brody J. Green, who will serve as Chief Executive Officer. The Company intends to continue to be listed on the NASDAQ under its current ticker symbol, “DGLY”. Kustom will be a multi-disciplinary entertainment company, anchored by a premier ticketing technology business, which we believe is poised to achieve substantial scaling opportunities, through its TicketSmarter, Inc. subsidiary, which offers unique primary and secondary ticketing products to the market. Additionally, Kustom’s offerings will include a distinctive event marketing and production company, with numerous customization options for events, festivals, and concerts, through its Kustom 440, Inc., subsidiary. For the year ending December 31, 2022, these standalone businesses achieved approximately $20.9 million in annual revenues. We believe that this business can achieve above-average growth by exploiting its relationships in the sporting and entertainment industries that are intended to support its primary ticketing-related opportunities, along with the expectation of the full deployment of the Kustom 440 brand and its line of service offerings. Kustom will be able to differentiate itself through its ability to provide event services of all sizes, ranging from corporate events to multi-day festivals. Furthermore, the ability to offer venue, ticketing, marketing, and production capabilities will make this company a unique and attractive option for many partners and investors. With the planned separation, TicketSmarter is expected to enhance its leadership position in the national secondary ticketing marketplace, while also building a stronger position in the primary ticketing market. Furthermore, as Kustom 440 was formed in mid-2022, the event marketing and production business will be fully able to execute and produce the planned events throughout 2023, as production and investments have already begun. Kustom will be led by Stanton E. Ross, who will serve as the President and Chief Executive Officer. Kustom’s shares are expected to be listed on a national exchange under a ticker symbol to be determined and announced at a later date. The Company may also pursue an alternative disposition of Kustom instead of the Spin-Off. The Spin-Off or alternative transaction is expected to be completed in the second half of 2023. |
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 month period ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. The balance sheet at December 31, 2022 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, 2022. |
Liquidity and Going Concern | Liquidity and Going Concern During the second quarter of 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. This update provided U.S. GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. Under this standard, the Company is required to evaluate whether there is substantial doubt about its ability to continue as a going concern each reporting period, including interim periods. In evaluating the Company’s ability to continue as a going concern, management considered the conditions and events that could raise substantial doubt about the Company’s ability to continue as a going concern within 12 months after the Company’s financial statements were issued (May 15, 2023). Management considered the Company’s current financial condition and liquidity sources, including current funds available, forecasted future cash flows and the Company’s obligations due before May 15, 2024. The Company has experienced net losses and cash outflows from operating activities since inception. For the three months ended March 31, 2023, the Company had a net loss attributable to common stockholders of $ 6,105,818 1,216,876 70,645 615,045 provided The Company has implemented an enhanced quality control program to detect and correct product issues before they result in significant rework expenditures affecting its gross margins and has seen progress in that regard. The Company has also implemented a marketing and advertisement reduction plan for its entertainment segment, which will focus on reducing and alleviating current obligations from its media marketing agreements and place a hold on entering into any new agreements. The Company believes that its quality control, cost-cutting initiatives, and new product introduction will eventually restore positive operating cash flows and profitability, although it can offer no assurances in this regard. Management has evaluated the significance of the conditions described above in relation to the Company’s ability to meet its obligations and concluded that, without additional funding, the Company will not have sufficient funds to meet its obligations within one year from the date the unaudited condensed consolidated financial statements were issued. |
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., BirdVu Jets, 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. The Company formed TicketSmarter, Inc. on September 1, 2021, upon its acquisition of Goody Tickets, LLC and TicketSmarter, LLC, to facilitate its global entertainment operations. The Company formed Worldwide Reinsurance Ltd. in December 2021, 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. and BirdVu Jets, 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 entertainment 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 customer contracts. In situations where sales are to a distributor, the Company has concluded that such contracts are with the distributor as in such cases the Company holds 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 is 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. Entertainment The Company reports entertainment 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 entertainment 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 March 31, 2023, the Company recognized revenue of $ 0.5 SCHEDULE OF CONTRACT LIABILITIES March 31, 2023 December 31, Additions/Reclass Recognized Revenue March 31, Contract liabilities, current $ 2,154,874 $ 562,809 $ 92,813 $ 2,624,870 Contract liabilities, non-current 5,818,082 868,211 370,646 6,315,647 $ 7,972,956 $ 1,431,020 $ 463,459 $ 8,940,517 March 31, 2022 December 31, Additions/Reclass Recognized Revenue March 31, Contract liabilities, current $ 1,665,519 $ 280,375 $ 157,173 $ 1,788,721 Contract liabilities, non-current 2,687,786 897,438 363,687 3,221,537 $ 4,353,305 $ 1,177,813 $ 520,860 $ 5,010,258 Sales returns and allowances aggregated $ 116,642 118,027 |
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 March 31, 2023 Adjusted Realized Realized Fair Value Demand deposits $ 339,933 $ — $ — $ 339,933 Short-term investments with original maturities of 90 days or less (Level 1) (1) Money market funds 2,519,790 — — 2,519,790 $ 2,859,723 $ — $ — $ 2,859,723 December 31, 2022 Adjusted Unrealized Unrealized Fair Value Demand deposits $ 897,745 $ — $ — $ 897,745 Short-term investments with original maturities of 90 days or less (Level 1) (1) Money market funds 2,634,454 — — 2,634,454 $ 3,532,199 $ — $ — $ 3,532,199 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 2,021,428 2,495,189 |
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 the market approach. Under the market approach, we estimate the fair value based on multiples of comparable public companies and precedent transactions. Significant estimates in the market approach include: identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment, and assessing comparable revenue and operating income multiples in estimating the fair value of the reporting unit. 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 March 31, 2023 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 represent the interest in subsidiaries held by our venture partner. The venture partner holds a noncontrolling interest 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 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. As such, we adopted ASC 326 effective January 1, 2023. The adoption of this standard did not have a significant impact on the Company’s financial position and results of operations. |
NATURE OF BUSINESS AND SUMMAR_3
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SCHEDULE OF CONTRACT LIABILITIES | SCHEDULE OF CONTRACT LIABILITIES March 31, 2023 December 31, Additions/Reclass Recognized Revenue March 31, Contract liabilities, current $ 2,154,874 $ 562,809 $ 92,813 $ 2,624,870 Contract liabilities, non-current 5,818,082 868,211 370,646 6,315,647 $ 7,972,956 $ 1,431,020 $ 463,459 $ 8,940,517 March 31, 2022 December 31, Additions/Reclass Recognized Revenue March 31, Contract liabilities, current $ 1,665,519 $ 280,375 $ 157,173 $ 1,788,721 Contract liabilities, non-current 2,687,786 897,438 363,687 3,221,537 $ 4,353,305 $ 1,177,813 $ 520,860 $ 5,010,258 |
SCHEDULE OF SHORT TERM INVESTMENTS | SCHEDULE OF SHORT TERM INVESTMENTS March 31, 2023 Adjusted Realized Realized Fair Value Demand deposits $ 339,933 $ — $ — $ 339,933 Short-term investments with original maturities of 90 days or less (Level 1) (1) Money market funds 2,519,790 — — 2,519,790 $ 2,859,723 $ — $ — $ 2,859,723 December 31, 2022 Adjusted Unrealized Unrealized Fair Value Demand deposits $ 897,745 $ — $ — $ 897,745 Short-term investments with original maturities of 90 days or less (Level 1) (1) Money market funds 2,634,454 — — 2,634,454 $ 3,532,199 $ — $ — $ 3,532,199 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORIES | Inventories consisted of the following at March 31, 2023 and December 31, 2022: SCHEDULE OF INVENTORIES March 31, 2023 December 31, 2022 Raw material and component parts– video solutions segment $ 3,923,281 $ 4,509,165 Work-in-process– video solutions segment 11,665 3,164 Finished goods – video solutions segment 6,558,625 6,846,091 Finished goods – entertainment segment 836,615 970,527 Subtotal 11,330,186 12,328,947 Reserve for excess and obsolete inventory– video solutions segment (5,089,903 ) (5,230,261 ) Reserve for excess and obsolete inventory – entertainment segment (319,204 ) (259,280 ) Total inventories $ 5,921,079 $ 6,839,406 |
DEBT OBLIGATIONS (Tables)
DEBT OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
SUMMARY OF DEBT OBLIGATIONS | Debt obligations is comprised of the following: SUMMARY OF DEBT OBLIGATIONS March 31, 2023 December 31, 2022 Economic injury disaster loan (EIDL) $ 150,000 $ 150,000 Contingent consideration promissory note – Nobility Healthcare Division Acquisition 324,129 388,955 Contingent consideration promissory note – Nobility Healthcare Division Acquisition 147,047 176,456 Contingent consideration promissory note – Nobility Healthcare Division Acquisition 6,926 208,083 Contingent consideration promissory note – Nobility Healthcare Division Acquisition 20,928 4,346 Commercial Extension of Credit – Entertainment Segment 708,857 — Debt obligations 1,357,887 927,840 Less: current maturities of debt obligations 1,102,943 485,373 Debt obligations, long-term $ 254,944 $ 442,467 |
SCHEDULE OF MATURITY OF DEBT OBLIGATIONS | Debt obligations mature as follows as of March 31, 2023: SCHEDULE OF MATURITY OF DEBT OBLIGATIONS March 31, 2023 2023 (April 1, 2023 to December 31, 2023) $ 1,005,718 2024 207,673 2025 3,412 2026 3,542 2027 and thereafter 137,542 Total $ 1,357,887 |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023 and December 31, 2022: SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS Level 1 Level 2 Level 3 Total March 31, 2023 Level 1 Level 2 Level 3 Total Liabilities: Contingent consideration promissory notes and contingent consideration earn-out agreement — — $ 499,029 $ 499,029 Liabilities, fair value $ — $ — $ 499,029 $ 499,029 Level 1 Level 2 Level 3 Total December 31, 2022 Level 1 Level 2 Level 3 Total Liabilities: Contingent consideration promissory notes and contingent consideration earn-out agreement — — $ 777,840 $ 777,840 Liabilities, fair value $ — $ — $ 777,840 $ 777,840 |
SCHEDULE OF FAIR VALUE MEASUREMENTS CHANGE IN LEVEL 3 INPUTS | The following table represents the change in Level 3 tier value measurements for the three months ended March 31, 2023: SCHEDULE OF FAIR VALUE MEASUREMENTS CHANGE IN LEVEL 3 INPUTS Contingent Consideration Promissory Notes Balance, December 31, 2022 $ 777,840 Principal payments on contingent consideration promissory notes – Revenue Cycle Management Acquisitions (120,789 ) Change in fair value of contingent consideration promissory notes – Revenue Cycle Management Acquisitions (158,022 ) Balance, March 31, 2023 $ 499,029 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCRUED EXPENSES | Accrued expenses consisted of the following at March 31, 2023 and December 31, 2022: SCHEDULE OF ACCRUED EXPENSES March 31, 2023 December 31, 2022 Accrued warranty expense $ 19,261 $ 15,694 Accrued litigation costs 247,984 247,984 Accrued sales commissions 59,075 55,000 Accrued payroll and related fringes 316,114 504,020 Accrued sales returns and allowances 116,643 118,026 Accrued taxes 50,727 46,408 Other 96,187 103,835 Total accrued expenses $ 905,991 $ 1,090,967 |
SCHEDULE OF ACCRUED WARRANTY EXPENSE | Accrued warranty expense was comprised of the following for the three months ended March 31, 2023: SCHEDULE OF ACCRUED WARRANTY EXPENSE Beginning balance $ 15,694 Provision for warranty expense 20,708 Charges applied to warranty reserve (17,141 ) Ending balance $ 19,261 |
PREPAID EXPENSES (Tables)
PREPAID EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Prepaid Expenses | |
SCHEDULE OF PREPAID EXPENSE | Prepaid expenses were the following at March 31, 2023 and December 31, 2022: SCHEDULE OF PREPAID EXPENSE March 31, 2023 December 31, 2022 Prepaid inventory $ 5,925,548 $ 6,110,321 Prepaid advertising 1,397,068 1,931,628 Other 459,394 424,464 Total prepaid expenses $ 7,782,010 $ 8,466,413 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT | Property, plant and equipment consisted of the following at March 31, 2023 and December 31, 2022: SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT Estimated March 31, 2023 December 31, 2022 Building 25 $ 4,537,037 $ 4,537,037 Land Infinite 739,734 739,734 Office furniture, fixtures, equipment, and aircraft 3 20 2,072,295 2,048,169 Warehouse and production equipment 3 7 51,302 51,302 Demonstration and tradeshow equipment 3 7 72,341 72,341 Building improvements 5 7 1,334,374 1,334,374 Total cost 8,807,083 8,782,957 Less: accumulated depreciation and amortization (1,056,371 ) (884,271 ) Net property, plant and equipment $ 7,750,712 $ 7,898,686 |
OPERATING LEASE (Tables)
OPERATING LEASE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023: SCHEDULE OF OPERATING LEASES RIGHT OF USE ASSETS AND LIABILITIES Assets: Operating lease right of use assets $ 1,189,053 Liabilities: Operating lease obligations-current portion $ 287,520 Operating lease obligations-less current portion 969,728 Total operating lease obligations $ 1,257,248 |
SCHEDULE OF LEASE EXPENSE | The components of lease expense were as follows for the three months ended March 31, 2023: SCHEDULE OF LEASE EXPENSE Selling, general and administrative expenses $ 142,402 |
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: 2023 (April 1, to December 31, 2023) $ 291,559 2024 336,992 2025 290,417 2026 271,868 Thereafter 334,651 Total undiscounted minimum future lease payments 1,525,487 Imputed interest (268,239 ) Total operating lease liability $ 1,257,248 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS | Intangible assets consisted of the following at March 31, 2023 and December 31, 2022: SCHEDULE OF INTANGIBLE ASSETS March 31, 2023 December 31, 2022 Gross Accumulated Net Gross Accumulated Net Amortized intangible assets: Licenses (video solutions segment) $ 211,183 $ 84,488 $ 126,695 $ 211,183 $ 80,378 $ 130,805 Patents and trademarks (video solutions segment) 472,077 328,412 143,665 472,077 305,021 167,056 Sponsorship agreement network (entertainment segment) 5,600,000 1,773,333 3,826,667 5,600,000 1,493,333 4,106,667 SEO content (entertainment segment) 600,000 237,500 362,500 600,000 200,000 400,000 Personal seat licenses (entertainment 180,081 9,502 170,579 180,081 8,001 172,080 Client agreements (revenue cycle management segments) 999,034 151,840 847,194 999,034 126,864 872,170 8,062,375 2,585,075 5,477,300 8,062,375 2,213,597 5,848,778 Indefinite life intangible assets: Goodwill (entertainment and revenue cycle management segments) 11,367,514 — 11,367,514 11,367,514 — 11,367,514 Trade name (entertainment segment) 600,000 — 600,000 600,000 — 600,000 Patents and trademarks pending 103,665 — 103,665 56,678 — 56,678 Total $ 20,133,554 $ 2,585,075 $ 17,548,479 $ 20,086,567 $ 2,213,597 $ 17,872,970 |
SCHEDULE OF ESTIMATED AMORTIZATION FOR INTANGIBLE ASSETS | SCHEDULE OF ESTIMATED AMORTIZATION FOR INTANGIBLE ASSETS Year ending December 31: 2023 (April 1, to December 31, 2023) $ 1,113,133 2024 1,432,808 2025 1,340,312 2026 856,330 2027 and thereafter 734,717 Total $ 5,477,300 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
SCHEDULE OF OTHER ASSETS | Other assets were the following at March 31, 2023 and December 31, 2022: SCHEDULE OF OTHER ASSETS March 31, 2023 December 31, 2022 Lease receivable $ 5,071,750 $ 4,700,923 Sponsorship network 2,149,520 116,828 Other 379,617 337,930 Total other assets $ 7,600,887 $ 5,155,681 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
SUMMARY OF STOCK OPTIONS OUTSTANDING | A summary of all stock option activity under the Plans for the three months ended March 31, 2023 is as follows: SUMMARY OF STOCK OPTIONS OUTSTANDING Options Number of Shares Weighted Average Exercise Price Outstanding at December 31, 2022 53,950 $ 45.80 Granted — — Exercised — — Forfeited (350 ) (83.20 ) Outstanding at March 31, 2023 53,600 $ 45.55 Exercisable at March 31, 2023 53,600 $ 45.55 |
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 March 31, 2023: 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 49.99 37,000 7.4 37,000 7.4 $ 50.00 69.99 15,100 5.2 15,100 5.2 $ 70.00 89.99 1,500 3.1 1,500 3.1 53,600 6.6 53,600 6.6 |
SUMMARY OF RESTRICTED STOCK ACTIVITY | A summary of all restricted stock activity under the Plans for the three months ended March 31, 2023 is as follows: SUMMARY OF RESTRICTED STOCK ACTIVITY Number of Restricted shares Weighted average grant date Nonvested balance, December 31, 2022 79,125 $ 21.73 Granted 35,000 5.00 Vested (26,375 ) (35.83 ) Forfeited — — Nonvested balance, March 31, 2023 87,750 $ 10.82 |
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 2023 (April 1, 2023 through December 31, 2023) 30,375 2024 28,750 2025 20,000 2026 4,625 2027 2,500 2028 1,000 |
COMMON STOCK PURCHASE WARRANTS
COMMON STOCK PURCHASE WARRANTS (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 $ 65.00 $ 65.00 Common stock issuable under the warrants 715,000 715,000 Terms at Volatility - range 103.7 % Risk-free rate 3.17 3.36 % Dividend 0 % Remaining contractual term 3.4 4.1 Exercise price $ 65.00 Common stock issuable under the warrants 1,215,000 |
SUMMARY OF WARRANT ACTIVITY | The following table summarizes information about shares issuable under warrants outstanding during the three months ended March 31, 2023: SUMMARY OF WARRANT ACTIVITY Warrants Weighted average exercise price Vested Balance, January 1, 2023 67,459 $ 60.26 Granted — — Exercised — — Forfeited/cancelled (28,333 ) (67.20 ) Vested Balance, March 31, 2023 39,126 $ 55.24 |
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 March 31, 2023: 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 $ 52.00 23,286 0.3 $ 60.00 15,840 0.1 39,126 0.2 |
NET EARNINGS (LOSS) PER SHARE (
NET EARNINGS (LOSS) PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 months ended March 31, 2023 and 2022 are as follows: SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING AND LOSS PER SHARE OUTSTANDING Three months ended March 31, 2023 2022 Numerator for basic and diluted income (loss) per share – Net income (loss) $ (6,105,818 ) $ (6,600,148 ) Denominator for basic income (loss) per share – weighted average shares outstanding 2,751,662 2,546,552 Dilutive effect of shares issuable upon conversion of convertible debt and the exercise of stock options and warrants outstanding — — Denominator for diluted income (loss) per share – adjusted weighted average shares outstanding 2,751,662 2,546,552 Net income (loss) per share: Basic $ (2.22 ) $ (2.59 ) Diluted $ (2.22 ) $ (2.59 ) |
DIGITAL ALLY HEALTHCARE VENTU_2
DIGITAL ALLY HEALTHCARE VENTURE (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring Cost and Reserve [Line Items] | |
SCHEDULE OF IDENTIFIABLE INTANGIBLE ASSETS ACQUIRED AND THEIR 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 ACCRUED AND ESTIMATED USEFUL LIVES Cost Amortization through Estimated useful life Identifiable intangible assets: Trademarks $ 600,000 $ — indefinite Sponsorship agreement network 5,600,000 1,773,333 5 Search engine optimization/content 600,000 237,500 4 $ 6,800,000 $ 2,010,833 |
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 |
SCHEDULE OF IDENTIFIABLE INTANGIBLE ASSETS ACQUIRED AND THEIR 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 IDENTIFIABLE INTANGIBLE ASSETS ACQUIRED AND THEIR ESTIMATED USEFUL LIVES Cost Amortization through Estimated Identifiable intangible assets: Client agreements $ 457,079 $ 79,989 10 |
Custom Computing Corporation, LLC [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 Preliminary As Final As Purchase price Preliminary As Final As Description September 30, September 30, Assets acquired: Tangible assets acquired $ 401,547 $ 401,547 Identifiable intangible assets acquired – client agreements — 206,955 Goodwill 2,920,000 2,713,045 Liabilities assumed pursuant to stock purchase agreement (401,547 ) (401,547 ) Net assets acquired and liabilities assumed $ 2,920,000 $ 2,920,000 Consideration: Cash paid at Healthcare Acquisition date $ 2,270,000 $ 2,270,000 Contingent consideration earn-out agreement 650,000 650,000 Total Healthcare Acquisition purchase price $ 2,920,000 $ 2,920,000 |
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: 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 |
SCHEDULE OF IDENTIFIABLE INTANGIBLE ASSETS ACQUIRED AND THEIR 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 IDENTIFIABLE INTANGIBLE ASSET ACQUIRED AND THEIR ESTIMATED USEFUL LIVES Cost Amortization through Estimated Identifiable intangible assets: Client agreements $ 206,955 $ 32,768 10 |
Healthcare 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 Final purchase price allocation 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 Assets Acquisition [Member] | |
Restructuring Cost and Reserve [Line Items] | |
SCHEDULE OF IDENTIFIABLE INTANGIBLE ASSETS ACQUIRED AND THEIR 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 IDENTIFIABLE INTANGIBLE ASSETS ACQUIRED AND THEIR ESTIMATED USEFUL LIVES Cost Amortization through Estimated Identifiable intangible assets: Client agreements $ 335,000 $ 39,083 10 |
TICKETSMARTER ACQUISITION (Tabl
TICKETSMARTER ACQUISITION (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Business Acquisition [Line Items] | |
SCHEDULE OF COMPONENTS OF IDENTIFIABLE INTANGIBLE ASSETS ACCRUED 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 ACCRUED AND ESTIMATED USEFUL LIVES Cost Amortization through Estimated useful life Identifiable intangible assets: Trademarks $ 600,000 $ — indefinite Sponsorship agreement network 5,600,000 1,773,333 5 Search engine optimization/content 600,000 237,500 4 $ 6,800,000 $ 2,010,833 |
Ticket Smarter Acquisition [Member] | |
Business Acquisition [Line Items] | |
SCHEDULE OF PARLIAMENT AND FINAL ESTIMATED FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED ACQUISITION | SCHEDULE OF PARLIAMENT AND FINAL ESTIMATED FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED ACQUISITION As allocated As allocated Preliminary purchase price allocation As allocated As allocated Description September 30, 2021 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 ) Liabilities assumed pursuant to stock purchase agreement (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) | 3 Months Ended |
Mar. 31, 2023 | |
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 March 31, 2023, and March 31, 2022: SCHEDULE OF SEGMENT REPORTING 2023 2022 Three Months Ended March 31, 2023 2022 Net Revenues: Video Solutions $ 1,899,364 $ 2,010,049 Revenue Cycle Management 1,781,590 1,903,957 Entertainment 4,016,236 6,380,775 Total Net Revenues $ 7,697,190 $ 10,294,781 Gross Profit: Video Solutions $ 534,195 $ 268,431 Revenue Cycle Management 775,934 697,169 Entertainment 234,663 974,019 Total Gross Profit $ 1,544,792 $ 1,939,619 Operating Income (loss): Video Solutions $ (1,963,186 ) $ (1,658,144 ) Revenue Cycle Management 103,765 (128,518 ) Entertainment (1,233,006 ) (1,445,847 ) Corporate (3,080,379 ) (3,570,829 ) Total Operating Income (Loss) $ (6,172,806 ) $ (6,803,338 ) Depreciation and Amortization: Video Solutions $ 198,122 $ 174,066 Revenue Cycle Management 25,507 146 Entertainment 319,481 319,183 Total Depreciation and Amortization $ 543,110 $ 493,395 March 31, 2023 December 31, 2022 Assets (net of eliminations): Video Solutions $ 30,802,197 $ 28,509,706 Revenue Cycle Management 2,720,079 2,201,570 Entertainment 8,741,754 11,190,491 Corporate 13,179,214 14,766,295 Total Identifiable Assets $ 55,443,244 $ 56,668,062 |
SCHEDULE OF CONTRACT LIABILITIE
SCHEDULE OF CONTRACT LIABILITIES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Contract liabilities, current, beginning | $ 2,154,874 | $ 1,665,519 |
Contract liabilities, current, additions | 562,809 | 280,375 |
Contract liabilities, current, revenue recognized | 92,813 | 157,173 |
Contract liabilities, current, ending | 2,624,870 | 1,788,721 |
Contract liabilities, non-current, beginning | 5,818,082 | 2,687,786 |
Contract liabilities, non-current, additions | 868,211 | 897,438 |
Contract liabilities, non-current, revenue recognized | 370,646 | 363,687 |
Contract liabilities, non-current, ending | 6,315,647 | 3,221,537 |
Contract liabilities, beginning | 7,972,956 | 4,353,305 |
Contract liabilities, additions | 1,431,020 | 1,177,813 |
Contract liabilities, revenue recognized | 463,459 | 520,860 |
Contract liabilities, ending | $ 8,940,517 | $ 5,010,258 |
SCHEDULE OF SHORT TERM INVESTME
SCHEDULE OF SHORT TERM INVESTMENTS (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Adjusted cost | $ 2,859,723 | $ 3,532,199 |
Realized gains | ||
Realized Losses | ||
Fair value | 2,859,723 | 3,532,199 |
Unrealized gains | ||
Unrealized losses | ||
Cash [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Adjusted cost | 339,933 | 897,745 |
Realized gains | ||
Realized Losses | ||
Fair value | 339,933 | 897,745 |
Unrealized gains | ||
Unrealized losses | ||
Money Market Funds [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Adjusted cost | 2,519,790 | 2,634,454 |
Realized gains | ||
Realized Losses | ||
Fair value | $ 2,519,790 | 2,634,454 |
Unrealized gains | ||
Unrealized losses |
NATURE OF BUSINESS AND SUMMAR_4
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 USD ($) Segment $ / shares | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) $ / shares | Aug. 23, 2022 $ / shares | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Common stock, par value per share | $ / shares | $ 0.001 | $ 0.001 | ||
Revenues | $ 37,000,000 | |||
Net income loss | $ 6,105,818 | $ 6,600,148 | ||
Net cash used in operating activities | 1,216,876 | 6,055,672 | ||
Net cash used in investing activities | 70,645 | 3,195,346 | ||
Net cash (used in) provided by financing activities | 615,045 | (2,195,658) | ||
Contract liabilities, revenue recognized | 463,459 | $ 520,860 | ||
Sales return and allowances | 116,642 | 118,027 | ||
Cash, FDIC insured amount | 250,000 | |||
Uninsured balance | $ 2,021,428 | $ 2,495,189 | ||
Number of operating segments | Segment | 3 | |||
Merger Agreement [Member] | Predecessor Common Stock [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Common stock, par value per share | $ / shares | $ 0.001 | |||
Merger Agreement [Member] | Registrant Common Stock [Member] | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Common stock, par value per share | $ / shares | $ 0.001 |
SCHEDULE OF INVENTORIES (Detail
SCHEDULE OF INVENTORIES (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw material and component parts– video solutions segment | $ 3,923,281 | $ 4,509,165 |
Work-in-process– video solutions segment | 11,665 | 3,164 |
Finished goods – video solutions segment | 6,558,625 | 6,846,091 |
Finished goods – entertainment segment | 836,615 | 970,527 |
Subtotal | 11,330,186 | 12,328,947 |
Reserve for excess and obsolete inventory– video solutions segment | (5,089,903) | (5,230,261) |
Reserve for excess and obsolete inventory – entertainment segment | (319,204) | (259,280) |
Total inventories | $ 5,921,079 | $ 6,839,406 |
INVENTORIES (Details Narrative)
INVENTORIES (Details Narrative) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Units held by customers and agents | $ 173,630 | $ 171,071 |
SUMMARY OF DEBT OBLIGATIONS (De
SUMMARY OF DEBT OBLIGATIONS (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Economic injury disaster loan (EIDL) | $ 150,000 | $ 150,000 |
Contingent consideration promissory note – Nobility Healthcare Division Acquisition | 324,129 | 388,955 |
Contingent consideration promissory note – Nobility Healthcare Division Acquisition | 147,047 | 176,456 |
Contingent consideration promissory note – Nobility Healthcare Division Acquisition | 6,926 | 208,083 |
Contingent consideration promissory note – Nobility Healthcare Division Acquisition | 20,928 | 4,346 |
Commercial Extension of Credit – Entertainment Segment | 708,857 | |
Debt obligations | 1,357,887 | 927,840 |
Less: current maturities of debt obligations | 1,102,943 | 485,373 |
Debt obligations, long-term | $ 254,944 | $ 442,467 |
SCHEDULE OF MATURITY OF DEBT OB
SCHEDULE OF MATURITY OF DEBT OBLIGATIONS (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
2023 (April 1, 2023 to December 31, 2023) | $ 1,005,718 | |
2024 | 207,673 | |
2025 | 3,412 | |
2026 | 3,542 | |
2027 and thereafter | 137,542 | |
Total | $ 1,357,887 | $ 927,840 |
DEBT OBLIGATIONS (Details Narra
DEBT OBLIGATIONS (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||
Feb. 02, 2023 | Feb. 02, 2022 | Jan. 02, 2022 | Aug. 31, 2021 | Jun. 30, 2021 | May 12, 2020 | Mar. 31, 2023 | Dec. 31, 2022 | Feb. 23, 2023 | |
Short-Term Debt [Line Items] | |||||||||
Face value | $ 150,000 | $ 150,000 | |||||||
Repayments of Debt | 291,143 | ||||||||
Principal loan through remittances | 708,857 | ||||||||
2020 Small Business Administration Notes [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Proceeds from loans | $ 150,000 | ||||||||
Face value | $ 150,000 | ||||||||
Debt instrument stated percentage | 3.75% | ||||||||
Principal payment | $ 731 | ||||||||
June Contingent Payment Note [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Face value | $ 350,000 | ||||||||
Debt instrument stated percentage | 3% | ||||||||
Principal payment | $ 143,026 | ||||||||
Debt instrument | 3 years | ||||||||
Perjected revenue | $ 975,000 | ||||||||
Fair value | $ 350,000 | 147,047 | 29,409 | ||||||
Securities gain loss | 0 | ||||||||
August Contingent Payment Note [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Face value | $ 650,000 | ||||||||
Debt instrument stated percentage | 3% | ||||||||
Principal payment | $ 357,779 | ||||||||
Debt instrument | 3 years | ||||||||
Perjected revenue | $ 3,000,000 | ||||||||
Fair value | $ 650,000 | 324,129 | |||||||
Securities gain loss | 64,826 | ||||||||
January Contingent Payment Note [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Face value | $ 750,000 | ||||||||
Debt instrument stated percentage | 3% | ||||||||
Principal payment | 146,843 | ||||||||
Debt instrument | 2 years 6 months | ||||||||
Perjected revenue | $ 3,500,000 | ||||||||
Fair value | 6,926 | ||||||||
Securities gain loss | 175,146 | ||||||||
Decrease in estimated fair value of debt | 175,146 | ||||||||
January Contingent Payment [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Fair value | 750,000 | ||||||||
February Contingent Payment Note [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Face value | $ 105,000 | ||||||||
Debt instrument stated percentage | 3% | ||||||||
Principal payment | $ 543 | ||||||||
Debt instrument | 3 years | ||||||||
Perjected revenue | $ 440,000 | ||||||||
Fair value | $ 105,000 | 20,928 | |||||||
Decrease in estimated fair value of debt | $ 17,125 | ||||||||
Gain on fair value of debt | $ 17,125 | ||||||||
Twenty Twenty Three Commercial Extension Of Credit [Member] | |||||||||
Short-Term Debt [Line Items] | |||||||||
Line of Credit | $ 1,000,000 | ||||||||
Credit facility description | The 25% withholding of the Borrower’s applicable remittance shall be deemed a “Payment” under the terms of this Note, and Payments shall continue until the earlier of (i) repayment of the Principal Sum, accrued Interest, and a fee of $35,000.00 or (ii) expiration of the Private Label Agreement on December 31, 2023 |
SCHEDULE OF FINANCIAL ASSETS AN
SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | $ 499,029 | $ 777,840 |
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 | 499,029 | 777,840 |
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] | 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] | 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 | 499,029 | 777,840 |
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 | $ 499,029 | $ 777,840 |
SCHEDULE OF FAIR VALUE MEASUREM
SCHEDULE OF FAIR VALUE MEASUREMENTS CHANGE IN LEVEL 3 INPUTS (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Short-Term Debt [Line Items] | |
Beginning balance | $ 777,840 |
Ending balance | 499,029 |
Contingent Consideration Promissory Note [Member] | |
Short-Term Debt [Line Items] | |
Beginning balance | 777,840 |
Principal payments on contingent consideration promissory notes - Revenue Cycle Management Acquisitions | (120,789) |
Change in fair value of contingent consideration promissory notes - Revenue Cycle Management Acquisitions | (158,022) |
Ending balance | $ 499,029 |
SCHEDULE OF ACCRUED EXPENSES (D
SCHEDULE OF ACCRUED EXPENSES (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued warranty expense | $ 19,261 | $ 15,694 |
Accrued litigation costs | 247,984 | 247,984 |
Accrued sales commissions | 59,075 | 55,000 |
Accrued payroll and related fringes | 316,114 | 504,020 |
Accrued sales returns and allowances | 116,643 | 118,026 |
Accrued taxes | 50,727 | 46,408 |
Other | 96,187 | 103,835 |
Total accrued expenses | $ 905,991 | $ 1,090,967 |
SCHEDULE OF ACCRUED WARRANTY EX
SCHEDULE OF ACCRUED WARRANTY EXPENSE (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Payables and Accruals [Abstract] | |
Beginning balance | $ 15,694 |
Provision for warranty expense | 20,708 |
Charges applied to warranty reserve | (17,141) |
Ending balance | $ 19,261 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Percentage of valuation allowance | 100% | 100% |
Deferred tax assets valuation allowance percentage | 100% | |
Operating loss carryforwards | $ 113.3 |
SCHEDULE OF PREPAID EXPENSE (De
SCHEDULE OF PREPAID EXPENSE (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Prepaid Expenses | ||
Prepaid inventory | $ 5,925,548 | $ 6,110,321 |
Prepaid advertising | 1,397,068 | 1,931,628 |
Other | 459,394 | 424,464 |
Total prepaid expenses | $ 7,782,010 | $ 8,466,413 |
SCHEDULE OF PROPERTY, PLANT AND
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Building | $ 4,537,037 | $ 4,537,037 |
Land | $ 739,734 | 739,734 |
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] | us-gaap:LandMember | |
Office furniture, fixtures, equipment, and aircraft | $ 2,072,295 | 2,048,169 |
Warehouse and production equipment | 51,302 | 51,302 |
Demonstration and tradeshow equipment | 72,341 | 72,341 |
Building improvements | 1,334,374 | 1,334,374 |
Total cost | 8,807,083 | 8,782,957 |
Less: accumulated depreciation and amortization | (1,056,371) | (884,271) |
Net property, plant and equipment | $ 7,750,712 | $ 7,898,686 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 25 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 | 7 years | |
Demonstration and Tradeshow Equipment [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 3 years | |
Demonstration and Tradeshow Equipment [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 7 years | |
Building Improvements [Member] | Minimum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 5 years | |
Building Improvements [Member] | Maximum [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 7 years |
PROPERTY, PLANT AND EQUIPMENT_2
PROPERTY, PLANT AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 171,631 | $ 135,438 |
SCHEDULE OF OPERATING LEASES RI
SCHEDULE OF OPERATING LEASES RIGHT OF USE ASSETS AND LIABILITIES (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Operating Lease | ||
Operating lease right of use assets | $ 1,189,053 | $ 782,129 |
Operating lease obligations-current portion | 287,520 | 294,617 |
Operating lease obligations-less current portion | 969,728 | $ 555,707 |
Total operating lease obligations | $ 1,257,248 |
SCHEDULE OF LEASE EXPENSE (Deta
SCHEDULE OF LEASE EXPENSE (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Selling, General and Administrative Expenses [Member] | |
Selling, general and administrative expenses | $ 142,402 |
SCHEDULE OF FUTURE MINIMUM LEAS
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS (Details) | Mar. 31, 2023 USD ($) |
Operating Lease | |
2023 (April 1, to December 31, 2023) | $ 291,559 |
2024 | 336,992 |
2025 | 290,417 |
2026 | 271,868 |
Thereafter | 334,651 |
Total undiscounted minimum future lease payments | 1,525,487 |
Imputed interest | (268,239) |
Total operating lease obligations | $ 1,257,248 |
OPERATING LEASE (Details Narrat
OPERATING LEASE (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||||||||
Jan. 02, 2022 | Sep. 02, 2021 | Aug. 31, 2021 | Aug. 31, 2021 | Jun. 30, 2021 | May 13, 2020 | Jun. 30, 2021 | Oct. 31, 2019 | Mar. 31, 2023 | Mar. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Weighted-average remaining lease term | 4 years 9 months 18 days | |||||||||
Private Medical Billing Company [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Termination period | termination date of June 2025 | termination date of July 2024 | ||||||||
Lessee, operating lease, term of contract | 16 months | |||||||||
Private Medical Billing Company [Member] | January 1, 2022 [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Lessee, operating lease, term of contract | 27 months | |||||||||
Custom Computing Corporation, LLC [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Termination period | termination date of March 2023 | termination date of March 2030 | ||||||||
Lessee, operating lease, term of contract | 84 months | |||||||||
Weighted-average remaining lease term | 84 months | |||||||||
Ticket Smarter Acquisition [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Termination period | termination date of December 2022 | |||||||||
Weighted-average remaining lease term | 6 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] | Private Medical Billing Company [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Operating lease, payments | $ 4,233 | |||||||||
Minimum [Member] | Custom Computing Corporation, LLC [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Operating lease, payments | $ 11,579 | $ 7,436 | ||||||||
Minimum [Member] | Ticket Smarter Acquisition [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Operating lease, payments | $ 7,211 | |||||||||
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] | Private Medical Billing Company [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Operating lease, payments | $ 4,626 | |||||||||
Maximum [Member] | Custom Computing Corporation, LLC [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Operating lease, payments | $ 11,811 | 8,877 | ||||||||
Maximum [Member] | Ticket Smarter Acquisition [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Operating lease, payments | $ 7,364 | |||||||||
Warehouse And Office Space [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Termination period | termination date of December 2026 | |||||||||
Lessee, operating lease, term of contract | 48 months | |||||||||
Warehouse And Office Space [Member] | Minimum [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Operating lease, payments | $ 12,398 | |||||||||
Warehouse And Office 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 | |||||||||
Lessee, operating lease, term of contract | 48 months | 7 months | ||||||||
Office Space and Copier [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Operating lease | $ 142,402 | |||||||||
Discount rate | 8% |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | $ 20,133,554 | $ 20,086,567 |
Accumulated amortization | 2,585,075 | 2,213,597 |
Net carrying value | 17,548,479 | 17,872,970 |
Amortized Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 8,062,375 | 8,062,375 |
Accumulated amortization | 2,585,075 | 2,213,597 |
Net carrying value | 5,477,300 | 5,848,778 |
Amortized Intangible Assets [Member] | Licenses [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 211,183 | 211,183 |
Accumulated amortization | 84,488 | 80,378 |
Net carrying value | 126,695 | 130,805 |
Amortized Intangible Assets [Member] | Patents and Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 472,077 | 472,077 |
Accumulated amortization | 328,412 | 305,021 |
Net carrying value | 143,665 | 167,056 |
Amortized Intangible Assets [Member] | Sponsorship Agreement Network [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 5,600,000 | 5,600,000 |
Accumulated amortization | 1,773,333 | 1,493,333 |
Net carrying value | 3,826,667 | 4,106,667 |
Amortized Intangible Assets [Member] | SEO Content [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 600,000 | 600,000 |
Accumulated amortization | 237,500 | 200,000 |
Net carrying value | 362,500 | 400,000 |
Amortized Intangible Assets [Member] | Personal Seat Licenses (Entertainment Segment) [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 180,081 | 180,081 |
Accumulated amortization | 9,502 | 8,001 |
Net carrying value | 170,579 | 172,080 |
Amortized Intangible Assets [Member] | Client Agreement Revenue Cycle [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 999,034 | 999,034 |
Accumulated amortization | 151,840 | 126,864 |
Net carrying value | 847,194 | 872,170 |
Unamortized Intangible Assets [Member] | Goodwill [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 11,367,514 | 11,367,514 |
Accumulated amortization | ||
Net carrying value | 11,367,514 | 11,367,514 |
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 | 103,665 | 56,678 |
Accumulated amortization | ||
Net carrying value | $ 103,665 | $ 56,678 |
SCHEDULE OF ESTIMATED AMORTIZAT
SCHEDULE OF ESTIMATED AMORTIZATION FOR INTANGIBLE ASSETS (Details) | Mar. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 (April 1, to December 31, 2023) | $ 1,113,133 |
2024 | 1,432,808 |
2025 | 1,340,312 |
2026 | 856,330 |
2027 and thereafter | 734,717 |
Total | $ 5,477,300 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 19 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 371,478 | $ 357,966 | $ 2,010,833 |
SCHEDULE OF OTHER ASSETS (Detai
SCHEDULE OF OTHER ASSETS (Details) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Lease receivable | $ 5,071,750 | $ 4,700,923 |
Sponsorship network | 2,149,520 | 116,828 |
Other | 379,617 | 337,930 |
Total other assets | $ 7,600,887 | $ 5,155,681 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) | Jul. 07, 2022 $ / shares |
Nasdaq Stock Market LLC [Member] | |
Closing bid price per share | $ 1 |
SUMMARY OF STOCK OPTIONS OUTSTA
SUMMARY OF STOCK OPTIONS OUTSTANDING (Details) - Stock Options [Member] | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Options outstanding, beginning balance | shares | 53,950 |
Weighted average exercise price, outstanding, beginning balance | $ / shares | $ 45.80 |
Options granted | shares | |
Weighted average exercise price, granted | $ / shares | |
Options exercised | shares | |
Weighted average exercise price, exercised | $ / shares | |
Options forfeited | shares | (350) |
Weighted average exercise price, forfeited | $ / shares | $ (83.20) |
Options outstanding, ending balance | shares | 53,600 |
Weighted average exercise price, outstanding, ending balance | $ / shares | $ 45.55 |
Options exercisable, ending balance | shares | 53,600 |
Weighted average exercise price, exercisable, ending balance | $ / shares | $ 45.55 |
SCHEDULE OF SHARES AUTHORIZED U
SCHEDULE OF SHARES AUTHORIZED UNDER STOCK OPTION PLANS BY EXERCISE PRICE RANGE (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Number of options, outstanding | 53,600 |
Weighted average remaining contractual life, outstanding options | 6 years 7 months 6 days |
Number of options, exercisable | 53,600 |
Weighted average remaining contractual life, exercisable options | 6 years 7 months 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 | $ 49.99 |
Number of options, outstanding | 37,000 |
Weighted average remaining contractual life, outstanding options | 7 years 4 months 24 days |
Number of options, exercisable | 37,000 |
Weighted average remaining contractual life, exercisable options | 7 years 4 months 24 days |
Range Two [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit | $ / shares | $ 50 |
Exercise price range, upper limit | $ / shares | $ 69.99 |
Number of options, outstanding | 15,100 |
Weighted average remaining contractual life, outstanding options | 5 years 2 months 12 days |
Number of options, exercisable | 15,100 |
Weighted average remaining contractual life, exercisable options | 5 years 2 months 12 days |
Range Three [Member] | |
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Exercise price range, lower limit | $ / shares | $ 70 |
Exercise price range, upper limit | $ / shares | $ 89.99 |
Number of options, outstanding | 1,500 |
Weighted average remaining contractual life, outstanding options | 3 years 1 month 6 days |
Number of options, exercisable | 1,500 |
Weighted average remaining contractual life, exercisable options | 3 years 1 month 6 days |
SUMMARY OF RESTRICTED STOCK ACT
SUMMARY OF RESTRICTED STOCK ACTIVITY (Details) - Restricted Stock [Member] | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of restricted shares, non-vested beginning balance | shares | 79,125 |
Weighted average grant date fair value, non-vested beginning balance | $ / shares | $ 21.73 |
Number of restricted shares, granted | shares | 35,000 |
Weighted average grant date fair value, granted | $ / shares | $ 5 |
Number of restricted shares, vested | shares | (26,375) |
Weighted average grant date fair value, vested | $ / shares | $ (35.83) |
Number of restricted shares, forfeited | shares | |
Weighted average grant date fair value, forfeited | $ / shares | |
Number of restricted shares, non-vested ending balance | shares | 87,750 |
Weighted average grant date fair value, non-vested ending balance | $ / shares | $ 10.82 |
SCHEDULE OF NON-VESTED BALANCE
SCHEDULE OF NON-VESTED BALANCE OF RESTRICTED STOCK (Details) | Mar. 31, 2023 shares |
Share-Based Payment Arrangement [Abstract] | |
2023 (April 1, 2023 through December 31, 2023) | 30,375 |
2024 | 28,750 |
2025 | 20,000 |
2026 | 4,625 |
2027 | 2,500 |
2028 | 1,000 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Pretax compensation expense | $ 114,848 | $ 394,749 | |
Stock options or restricted stock granted | 333,750 | ||
Options, available for grant | 137,042 | ||
Aggregate intrinsic value | $ 0 | $ 0 | |
Aggregate intrinsic value of options exercisable | 0 | $ 0 | |
Unrecognized portion of stock compensation expense | 0 | ||
Restricted Stock Units (RSUs) [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Unrecognized portion of stock compensation expense | $ 559,045 | ||
2005 Stock Option Plan [Member] | During 2015 [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Shares unavailable for issuance | 1,078 | ||
Shares unexercised and outstanding | 284 | ||
2006 Stock Option Plan [Member] | During 2016 [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Shares unexercised and outstanding | 531 | ||
2007 Stock Option Plan [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Shares unexercised and outstanding | 0 | ||
2007 Stock Option Plan [Member] | During 2017 [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Shares unavailable for issuance | 4,733 | ||
2008 Plan [Member] | During 2018 [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Shares unavailable for issuance | 2,025 |
SCHEDULE OF WARRANT MODIFICATIO
SCHEDULE OF WARRANT MODIFICATION (Details) | Aug. 23, 2022 shares | Aug. 19, 2021 shares | Feb. 02, 2021 shares |
Common stock issuable under the warrants | 2,127,500 | ||
Warrant [Member] | Original Terms [Member] | |||
Common stock issuable under the warrants | 1,215,000 | 715,000 | |
Warrant [Member] | Modified Terms [Member] | |||
Common stock issuable under the warrants | 715,000 | ||
Warrant [Member] | Measurement Input, Price Volatility [Member] | Original Terms [Member] | |||
Warrants measurement input | 103.7 | 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] | Original Terms [Member] | Minimum [Member] | |||
Warrants measurement input | 3.17 | ||
Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member] | Original Terms [Member] | Maximum [Member] | |||
Warrants measurement input | 3.36 | ||
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 | 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] | Original Terms [Member] | Minimum [Member] | |||
Remaining contractual term | 3 years 4 months 24 days | ||
Warrant [Member] | Measurement Input, Expected Term [Member] | Original Terms [Member] | Maximum [Member] | |||
Remaining contractual term | 4 years 1 month 6 days | ||
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 | 65 | 65 | |
Warrant [Member] | Measurement Input, Exercise Price [Member] | Modified Terms [Member] | |||
Warrants measurement input | 65 |
SUMMARY OF WARRANT ACTIVITY (De
SUMMARY OF WARRANT ACTIVITY (Details) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Warrants, vested, beginning balance | shares | 67,459 |
Weighted average exercise price, vested, beginning balance | $ / shares | $ 60.26 |
Warrants, Granted | shares | |
Weighted average exercise price, granted | $ / shares | |
Warrants, exercised | shares | |
Weighted average exercise price, exercised | $ / shares | |
Warrants, forfeited/cancelled | shares | (28,333) |
Weighted average exercise price, forfeited/cancelled | $ / shares | $ (67.20) |
Warrants, vested, ending balance | shares | 39,126 |
Weighted average exercise price, vested, ending balance | $ / shares | $ 55.24 |
SUMMARY OF RANGE OF EXERCISE PR
SUMMARY OF RANGE OF EXERCISE PRICES AND WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE OF WARRANTS (Details) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Outstanding and exercisable warrants, number of warrants | 39,126 |
Outstanding and exercisable warrants, weighted average remaining contractual life | 2 months 12 days |
Range One [Member] | |
Outstanding and exercisable warrants, Exercise price | $ / shares | $ 52 |
Outstanding and exercisable warrants, number of warrants | 23,286 |
Outstanding and exercisable warrants, weighted average remaining contractual life | 3 months 18 days |
Range Two [Member] | |
Outstanding and exercisable warrants, Exercise price | $ / shares | $ 60 |
Outstanding and exercisable warrants, number of warrants | 15,840 |
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 ($) | 3 Months Ended | 12 Months Ended | |||||
Aug. 23, 2022 | Aug. 19, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Jun. 30, 2022 | Feb. 02, 2021 | |
Warrant to purchase | 2,127,500 | ||||||
Warrants and rights outstanding | $ 11,818,644 | ||||||
Warrant modification expense | $ 295,780 | ||||||
Issuance of common stock through warrant exchange agreement, shares | 303,750 | ||||||
Change in fair market value of warrant derivative liabilities | $ 148,171 | ||||||
Weighted average remaining terms | 4 months | ||||||
Fair Value, Inputs, Level 3 [Member] | |||||||
Change in pricing inputs and volatilities, percentage | 10% | ||||||
Exchange Warrants [Member] | |||||||
Warrants exercisable | 384,077 | ||||||
Warrants and rights outstanding | $ 12,114,424 | ||||||
Warrant Exchange Agreement [Member] | |||||||
Warrants exercisable | 384,077 | ||||||
Fair value of warrant derivative liability | $ 8,100,000 | $ 9,300,000 | |||||
Change in fair market value of warrant derivative liabilities | $ 1,200,000 | ||||||
Issued shares of common stock, value | 4,500,000 | ||||||
Gain on extinguishment of warrant derivative liabilities | $ 3,600,000 | ||||||
Warrant Exchange Agreement [Member] | Replacement Original Warrants [Member] | |||||||
Exercise price per share | $ 65 | ||||||
Number of shares issued warrant | 330,923 | ||||||
Warrants expiration date | Sep. 18, 2026 | ||||||
Common Stock Purchase Warrants [Member] | |||||||
Warrant to purchase | 39,162 | ||||||
Exercise price per share | $ 52 | ||||||
Warrant expiration date description | The warrants expire from April 3, 2023 through July 31, 2023 and under certain circumstances allow for cashless exercise. | ||||||
Warrant [Member] | |||||||
Intrinsic value of all outstanding warrants | $ 0 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 3 Months Ended | |||
Feb. 06, 2023 | Jan. 10, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Reverse stock split | 1-for-20 reverse stock split | |||
Net income attributable to noncontrolling interests | $ 126,239 | $ (98,094) | ||
Net income attributable to noncontrolling interests | $ (126,239) | $ 98,094 | ||
Nobility Healthcare LLC [Member] | ||||
Noncontrolling shareholders ownership percentage | 49% | |||
Nobility Healthcare LLC [Member] | ||||
Equity method investment, ownership percentage | 51% | |||
Officers [Member] | ||||
Common stock issuance granted | 22,500 | |||
Vesting drescription | Such shares will generally vest over a period of one to five years on their respective anniversary dates in January through January 2028, provided that each grantee remains an officer or employee on such dates. | |||
New Employees [Member] | ||||
Common stock issuance granted | 12,500 | |||
New Employees [Member] | Minimum [Member] | ||||
Vesting period | 1 year | |||
New Employees [Member] | Maximum [Member] | ||||
Vesting period | 2 years |
SCHEDULE OF WEIGHTED AVERAGE NU
SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING AND LOSS PER SHARE OUTSTANDING (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Numerator for basic and diluted income (loss) per share – Net income (loss) | $ (6,105,818) | $ (6,600,148) |
Denominator for basic income (loss) per share – weighted average shares outstanding | 2,751,662 | 2,546,552 |
Dilutive effect of shares issuable upon conversion of convertible debt and the exercise of stock options and warrants outstanding | ||
Denominator for diluted income (loss) per share – adjusted weighted average shares outstanding | 2,751,662 | 2,546,552 |
Basic | $ (2.22) | $ (2.59) |
Diluted | $ (2.22) | $ (2.59) |
SCHEDULE OF PRELIMINARY FAIR VA
SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION (Details) - USD ($) | 3 Months Ended | |||||||
Sep. 30, 2022 | Jun. 30, 2022 | Feb. 01, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2023 | Feb. 02, 2022 | Sep. 02, 2021 | |
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 | $ 4,244,400 | |||||
Healthcare Acquisition [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Total acquisition purchase price | $ 1,376,509 | $ 1,376,509 | ||||||
Healthcare Acquisition One [Member] | ||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||
Tangible assets acquired | $ 401,547 | $ 401,547 | ||||||
Intangible assets acquired – Client Agreements | 206,955 | |||||||
Goodwill | 2,713,045 | 2,920,000 | ||||||
Total assets acquired and liabilities assumed | 2,920,000 | 2,920,000 | ||||||
Cash paid at acquisition date | 2,270,000 | 2,270,000 | ||||||
Contingent consideration promissory note | 650,000 | 650,000 | ||||||
Total acquisition purchase price | 2,920,000 | 2,920,000 | ||||||
Liabilities assumed pursuant to stock purchase agreement | $ (401,547) | $ (401,547) | ||||||
Healthcare Acquisition Two [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 [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 |
SCHEDULE OF IDENTIFIABLE INTANG
SCHEDULE OF IDENTIFIABLE INTANGIBLE ASSETS ACQUIRED AND THEIR ESTIMATED USEFUL LIVES (Details) - USD ($) | 3 Months Ended | 19 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | |||
Cost | $ 6,800,000 | ||
Amortization | $ 371,478 | $ 357,966 | $ 2,010,833 |
Client Agreements [Member] | Healthcare Acquisition [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 457,079 | ||
Amortization | $ 79,989 | ||
Estimated useful life | 10 years | ||
Client Agreements [Member] | Medical Billing Acquisition [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | $ 335,000 | ||
Amortization | $ 39,083 | ||
Estimated useful life | 10 years |
SCHEDULE OF IDENTIFIABLE INTA_2
SCHEDULE OF IDENTIFIABLE INTANGIBLE ASSET ACQUIRED AND THEIR ESTIMATED USEFUL LIVES (Details) - USD ($) | 3 Months Ended | 19 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | |
Finite-Lived Intangible Assets [Line Items] | |||
Cost | $ 6,800,000 | ||
Amortization | $ 371,478 | $ 357,966 | $ 2,010,833 |
Client Agreements [Member] | Healthcare Acquisition One [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Cost | 206,955 | ||
Amortization | $ 32,768 | ||
Estimated useful life | 10 years |
DIGITAL ALLY HEALTHCARE VENTU_3
DIGITAL ALLY HEALTHCARE VENTURE (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||
Jun. 30, 2022 | Feb. 02, 2022 | Feb. 01, 2022 | Jan. 02, 2022 | Aug. 31, 2021 | Jun. 30, 2021 | Jun. 30, 2021 | Jun. 04, 2021 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Jan. 01, 2022 | |
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||
Principal amount | $ 6,152,398 | $ 8,355,162 | |||||||||||
Principal amount | 150,000 | $ 150,000 | |||||||||||
Increase accounts receivable | $ 211,201 | $ 744,521 | |||||||||||
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 | $ 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] | Elite Medical Billing Specialists, Inc [Member] | |||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||
Principal amount | $ 350,000 | ||||||||||||
Principal amount | $ 317,212 | ||||||||||||
Nobility LLC [Member] | Healthcare Acquisition [Member] | |||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||
Initial payment | 850,000 | ||||||||||||
Increase accounts receivable | 75,000 | ||||||||||||
Business Acquisition, Transaction Costs | $ 7,996 | ||||||||||||
Nobility LLC [Member] | Elite Medical Billing Specialists, Inc [Member] | |||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||
Repayments of notes payable | 162,552 | ||||||||||||
Aggregate purchase price | $ 1,376,509 | ||||||||||||
Nobility LLC [Member] | Elite Medical Billing Specialists, Inc [Member] | Acquisition-related Costs [Member] | |||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||
Aggregate purchase price | $ 164,630 | ||||||||||||
Nobility LLC [Member] | Medical Billing Acquisition [Member] | |||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||
Initial payment | $ 2,270,000 | ||||||||||||
Aggregate purchase price | 2,920,000 | ||||||||||||
Business Acquisition, Transaction Costs | 5,602 | ||||||||||||
Nobility LLC [Member] | Medical Billing Acquisition [Member] | Promissory Note [Member] | |||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||
Principal amount | $ 650,000 | ||||||||||||
Nobility LLC [Member] | Medical Billing Acquisition One [Member] | |||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||
Initial payment | $ 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] | |||||||||||||
Principal amount | $ 750,000 | ||||||||||||
Nobility LLC [Member] | Medical Billing Acquisition Two [Member] | |||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||
Initial payment | $ 230,000 | ||||||||||||
Aggregate purchase price | 335,000 | ||||||||||||
Business Acquisition, Transaction Costs | 10,322 | ||||||||||||
Nobility LLC [Member] | Medical Billing Acquisition Two [Member] | Promissory Note [Member] | |||||||||||||
Defined Benefit Plan Disclosure [Line Items] | |||||||||||||
Principal amount | $ 105,000 |
SCHEDULE OF PARLIAMENT AND FINA
SCHEDULE OF PARLIAMENT AND FINAL ESTIMATED FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED ACQUISITION (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Sep. 30, 2021 | Dec. 31, 2021 | Jun. 30, 2022 | Sep. 02, 2021 | Jun. 30, 2021 | |
Business Acquisition [Line Items] | |||||
Identifiable intangible assets acquired | $ 457,079 | ||||
Goodwill | 667,921 | 1,125,000 | |||
Net assets acquired and liabilities assumed | 1,376,509 | 1,376,509 | |||
Cash paid at TicketSmarter Acquisition date | 174,351 | 174,351 | |||
Contingent consideration earn-out agreement | $ 350,000 | $ 4,244,400 | $ 350,000 | ||
Ticket Smarter Acquisition [Member] | |||||
Business Acquisition [Line Items] | |||||
Tangible assets acquired, including $51,432 of cash acquired | $ 7,139,930 | $ 5,748,291 | |||
Identifiable intangible assets acquired | 6,800,000 | ||||
Goodwill | 11,839,308 | 5,886,547 | |||
Liabilities assumed pursuant to stock purchase agreement | (5,128,964) | (5,128,964) | |||
Net assets acquired and liabilities assumed | 13,850,274 | 13,305,874 | |||
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 |
SCHEDULE OF PRELIMINARY FAIR _2
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 ACCRUED AND ESTIMATED USEFUL LIVES (Details) - USD ($) | 3 Months Ended | 19 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Mar. 31, 2023 | |
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Identifiable intangible assets | $ 6,800,000 | ||
Amortization | $ 371,478 | $ 357,966 | 2,010,833 |
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 | $ 1,773,333 | ||
Estimated useful life | 5 years | ||
Search Engine Optimization [Member] | |||
Acquired Finite-Lived Intangible Assets [Line Items] | |||
Identifiable intangible assets | $ 600,000 | ||
Amortization | $ 237,500 | ||
Estimated useful life | 4 years |
TICKETSMARTER ACQUISITION (Deta
TICKETSMARTER ACQUISITION (Details Narrative) - USD ($) | Sep. 02, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 |
Business Acquisition [Line Items] | |||||
Number of shares issued, value | $ 9,403,600 | ||||
Contingent Amount | 4,244,400 | $ 350,000 | $ 350,000 | ||
Ticket Smarter Acquisition [Member] | |||||
Business Acquisition [Line Items] | |||||
Contingent Amount | $ 3,700,000 | $ 4,244,400 | |||
Amount in escrow | $ 500,000 | $ 500,000 | |||
Working capital adjustment | 297,726 | ||||
Escrow amount to sellers | 202,274 | ||||
Acquisition related costs | 40,625 | ||||
Ticket Smarter Acquisition [Member] | Promissory Note [Member] | |||||
Business Acquisition [Line Items] | |||||
Fair value on acquisition | $ 3,700,000 |
SCHEDULE OF SEGMENT REPORTING (
SCHEDULE OF SEGMENT REPORTING (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | |||
Total Net Revenues | $ 7,697,190 | $ 10,294,781 | |
Total Gross Profit | 1,544,792 | 1,939,619 | |
Total Operating Income (Loss) | (6,172,806) | (6,803,338) | |
Total Depreciation and Amortization | 543,110 | 493,395 | |
Total identifiable assets | 55,443,244 | $ 56,668,062 | |
Video Solutions [Member] | |||
Segment Reporting Information [Line Items] | |||
Total Net Revenues | 1,899,364 | 2,010,049 | |
Total Gross Profit | 534,195 | 268,431 | |
Total Operating Income (Loss) | (1,963,186) | (1,658,144) | |
Total Depreciation and Amortization | 198,122 | 174,066 | |
Total identifiable assets | 30,802,197 | 28,509,706 | |
Revenue Cycle Management [Member] | |||
Segment Reporting Information [Line Items] | |||
Total Net Revenues | 1,781,590 | 1,903,957 | |
Total Gross Profit | 775,934 | 697,169 | |
Total Operating Income (Loss) | 103,765 | (128,518) | |
Total Depreciation and Amortization | 25,507 | 146 | |
Total identifiable assets | 2,720,079 | 2,201,570 | |
Entertainment Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Total Net Revenues | 4,016,236 | 6,380,775 | |
Total Gross Profit | 234,663 | 974,019 | |
Total Operating Income (Loss) | (1,233,006) | (1,445,847) | |
Total Depreciation and Amortization | 319,481 | 319,183 | |
Total identifiable assets | 8,741,754 | 11,190,491 | |
Corporate Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Total Operating Income (Loss) | (3,080,379) | $ (3,570,829) | |
Total identifiable assets | $ 13,179,214 | $ 14,766,295 |
SEGMENT DATA (Details Narrative
SEGMENT DATA (Details Narrative) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 |
Segment Reporting [Abstract] | ||
Reserve for excess | $ 5,089,903 | $ 5,230,261 |
Obsolete inventory | $ 319,204 | $ 259,280 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | Mar. 31, 2023 | Dec. 31, 2021 |
Nobility LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Working capital | $ 138,384 | $ 158,384 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Apr. 05, 2023 | Apr. 05, 2023 | Feb. 02, 2021 |
Subsequent Event [Line Items] | |||
Comprised shares | 2,127,500 | ||
Subsequent Event [Member] | Warrant [Member] | |||
Subsequent Event [Line Items] | |||
Aggregate shares exercisable | 1,125,000 | 1,125,000 | |
Subsequent Event [Member] | Warrant One [Member] | |||
Subsequent Event [Line Items] | |||
Comprised shares | 375,000 | 375,000 | |
Warrant exercise price | $ 5.50 | $ 5.50 | |
Subsequent Event [Member] | Warrant Two [Member] | |||
Subsequent Event [Line Items] | |||
Comprised shares | 375,000 | 375,000 | |
Warrant exercise price | $ 6.50 | $ 6.50 | |
Subsequent Event [Member] | Warrant Three [Member] | |||
Subsequent Event [Line Items] | |||
Comprised shares | 375,000 | 375,000 | |
Warrant exercise price | $ 7.50 | $ 7.50 | |
Subsequent Event [Member] | Common Stock [Member] | |||
Subsequent Event [Line Items] | |||
Common stock conversion price | $ 5 | ||
Outstanding pricipal amount | 110% | ||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | |||
Subsequent Event [Line Items] | |||
Principal amount | $ 3,000,000 | ||
Debt instrument stated percentage | 10% | 10% | |
Proceeds from convertible debt | $ 2,700,000 | ||
Principal amount | $ 3,000,000 |