Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | May 17, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2024 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 | |
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, $0.001 par value per share | |
Trading Symbol | DGLY | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 2,879,826 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 927,861 | $ 680,549 |
Accounts receivable – trade, net of $234,727 allowance – March 31, 2024 and $200,668 – December 31, 2023 | 1,207,752 | 1,584,662 |
Other receivables, net of $25,000 allowance – March 31, 2024 and $5,000 – December 31, 2023 | 3,213,740 | 3,107,634 |
Inventories, net | 3,148,689 | 3,845,281 |
Prepaid expenses | 6,575,013 | 6,366,368 |
Total current assets | 15,073,055 | 15,584,494 |
Property, plant, and equipment, net | 6,207,795 | 7,283,702 |
Goodwill and other intangible assets, net | 16,625,032 | 16,510,422 |
Operating lease right of use assets, net | 925,128 | 1,053,159 |
Other assets | 6,333,185 | 6,597,032 |
Total assets | 45,164,195 | 47,028,809 |
Current liabilities: | ||
Accounts payable | 11,212,697 | 10,732,089 |
Accrued expenses | 3,137,144 | 3,269,330 |
Current portion of operating lease obligations | 225,960 | 279,538 |
Contract liabilities – current portion | 3,299,714 | 2,937,168 |
Notes payable – related party – current portion | 2,700,000 | 2,700,000 |
Debt obligations – current portion | 2,403,029 | 1,260,513 |
Warrant derivative liabilities | 1,718,629 | 1,369,738 |
Income taxes payable | 61 | |
Total current liabilities | 24,697,173 | 22,548,437 |
Long-term liabilities: | ||
Debt obligations – long term | 4,875,831 | 4,853,237 |
Operating lease obligation – long term | 749,718 | 827,836 |
Contract liabilities – long term | 7,285,206 | 7,340,459 |
Lease Deposit | 10,445 | 10,445 |
Total liabilities | 37,618,373 | 35,580,414 |
Commitments and contingencies | ||
Stockholders’ Equity: | ||
Common stock, $0.001 par value per share; 200,000,000 shares authorized; shares issued: 2,879,826 shares issued – March 31, 2024 and 2,800,754 shares issued – December 31, 2023 | 2,880 | 2,801 |
Additional paid in capital | 128,481,699 | 128,441,083 |
Noncontrolling interest in consolidated subsidiary | 661,044 | 673,292 |
Accumulated deficit | (121,599,801) | (117,668,781) |
Total stockholders’ equity | 7,545,822 | 11,448,395 |
Total liabilities and stockholders’ equity | $ 45,164,195 | $ 47,028,809 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivable | $ 234,727 | $ 200,668 |
Allowance for other receivable, current | $ 25,000 | $ 5,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 2,879,826 | 2,800,754 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenue: | ||
Total revenue | $ 5,529,351 | $ 7,697,190 |
Cost of revenue: | ||
Total cost of revenue | 4,005,652 | 6,152,398 |
Gross profit | 1,523,699 | 1,544,792 |
Selling, general and administrative expenses: | ||
Research and development expense | 487,466 | 934,939 |
Selling, advertising and promotional expense | 761,118 | 1,847,489 |
General and administrative expense | 3,914,149 | 4,935,170 |
Total selling, general and administrative expenses | 5,162,733 | 7,717,598 |
Operating loss | (3,639,034) | (6,172,806) |
Other income (expense): | ||
Interest income | 19,356 | 15,477 |
Interest expense | (648,567) | (5,664) |
Other income | 27,602 | 25,393 |
Change in fair value of warrant derivative liabilities | (348,891) | |
Change in fair value of contingent consideration promissory notes and earn-out agreements | 158,021 | |
Gain on extinguishment of liabilities | 682,345 | |
Gain on sale of intangibles | 5,582 | |
Loss on sale of property, plant and equipment | (41,661) | |
Total other income | (304,234) | 193,227 |
Income (loss) before income tax benefit | (3,943,268) | (5,979,579) |
Income tax benefit | ||
Net loss | (3,943,268) | (5,979,579) |
Net (income) loss attributable to noncontrolling interests of consolidated subsidiary | 12,248 | (126,239) |
Net loss attributable to common stockholders | $ (3,931,020) | $ (6,105,818) |
Net loss per share information: | ||
Basic | $ (1.37) | $ (2.22) |
Diluted | $ (1.37) | $ (2.22) |
Weighted average shares outstanding: | ||
Basic | 2,861,229 | 2,751,662 |
Diluted | 2,861,229 | 2,751,662 |
Product [Member] | ||
Revenue: | ||
Total revenue | $ 1,565,846 | $ 2,453,810 |
Cost of revenue: | ||
Total cost of revenue | 1,567,393 | 2,301,100 |
Service, Other [Member] | ||
Revenue: | ||
Total revenue | 3,963,505 | 5,243,380 |
Cost of revenue: | ||
Total cost of revenue | $ 2,438,259 | $ 3,851,298 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Noncontrolling Interest [Member] | Retained Earnings [Member] | Total |
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 | ||||
Issuance due to rounding from reverse stock split | |||||
Issuance due to rounding from reverse stock split, shares | 54 | ||||
Net Income (loss) | 126,239 | $ (6,105,818) | $ (5,979,579) | ||
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 | ||||
Balance at Dec. 31, 2023 | $ 2,801 | 128,441,083 | 673,292 | (117,668,781) | 11,448,395 |
Balance, shares at Dec. 31, 2023 | 2,800,754 | ||||
Stock-based compensation | 40,695 | 40,695 | |||
Restricted common stock grant | $ 80 | (80) | |||
Restricted common stock grant, shares | 80,197 | ||||
Net Income (loss) | (12,248) | (3,931,020) | (3,943,268) | ||
Restricted common stock forfeitures | $ (1) | 1 | |||
Restricted common stock grant, shares | (1,125) | 1,125 | |||
Balance at Mar. 31, 2024 | $ 2,880 | $ 128,481,699 | $ 661,044 | $ (121,599,801) | $ 7,545,822 |
Balance, shares at Mar. 31, 2024 | 2,879,826 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (3,943,268) | $ (5,979,579) |
Adjustments to reconcile net loss to net cash flows used in operating activities: | ||
Depreciation and amortization | 550,991 | 543,110 |
Loss on sale of property, plant and equipment | 41,661 | |
Gain on sale of intangible | (5,582) | |
Stock-based compensation | 40,695 | 114,848 |
Amortization of debt issuance costs | 360,330 | |
Gain on extinguishment of liabilities | (682,345) | |
Change in fair value of warrant derivative liabilities | 348,891 | |
Provision for inventory obsolescence | (56,072) | 80,434 |
Provision for doubtful accounts receivable | 34,059 | 29,025 |
Provision for doubtful lease receivable | 20,000 | 5,000 |
Change in fair value of contingent consideration promissory note | (158,021) | |
(Increase) decrease in: | ||
Accounts receivable – trade | 142,606 | (211,201) |
Other receivable | (126,106) | 1,479,476 |
Inventories | 793,664 | 837,893 |
Prepaid expenses | (154,645) | 684,403 |
Operating lease right of use assets | 54,137 | 110,115 |
Other assets | 263,847 | (2,445,206) |
Increase (decrease) in: | ||
Accounts payable | 1,569,346 | 3,009,912 |
Accrued expenses | (132,185) | (184,976) |
Operating lease obligations | (57,801) | (110,115) |
Income taxes payable | (61) | |
Lease deposit | 10,445 | |
Contract liabilities | 19,293 | 967,561 |
Net cash used in operating activities | (918,545) | (1,216,876) |
Cash Flows from Investing Activities: | ||
Purchases of furniture, fixtures and equipment | (18,467) | (23,657) |
Additions to intangible assets | (61,882) | (46,988) |
Cash paid for acquisition of Country Stampede | (400,000) | |
Proceeds from sale of intangible assets | 90,535 | |
Proceeds from sale of property, plant and equipment | 550,644 | |
Net cash provided by (used in) investing activities | 160,830 | (70,645) |
Cash Flows from Financing Activities: | ||
Proceeds – Merchant Advances – Video Solutions Segment | 700,000 | |
Proceeds – Merchant Advances – Entertainment Segment | 915,000 | |
Proceeds – Commercial Extension of Credit – Entertainment Segment | 275,000 | 1,000,000 |
Payments on Commercial Extension of Credit – Entertainment Segment | (87,928) | (264,166) |
Payments on Merchant Advances – Video Solutions Segment | (702,000) | |
Principal payment on EIDL loan | (810) | |
Principal payment on contingent consideration promissory notes | (94,235) | (120,789) |
Net cash provided by financing activities | 1,005,027 | 615,045 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 247,312 | (672,476) |
Cash, cash equivalents, and restricted cash, beginning of period | 778,149 | 3,532,199 |
Cash, cash equivalents, and restricted cash, end of period | 1,025,461 | 2,859,723 |
Supplemental disclosures of cash flow information: | ||
Cash payments for interest | 158,517 | 6,348 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Restricted common stock grant | 80 | 35 |
Restricted common stock forfeitures | 1 | |
Adjustments of accounts payable with the sale proceeds of property, plant and equipment | 549,356 | |
Assets acquired in business acquisitions | 605,000 | |
Goodwill acquired in business acquisitions | 225,959 | |
Liabilities assumed in business acquisitions | 288,000 | |
Amounts payable for Country Stampede acquisition | 142,959 | |
Commercial Extension of Credit repaid through accrued revenue – Entertainment Segment | 205,357 | 26,977 |
ROU and lease liability recorded on extension (termination) of lease | $ (73,894) | $ 517,039 |
NATURE OF BUSINESS AND SUMMARY
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2024 | |
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 (“Digital Ally Healthcare”), TicketSmarter, Inc. (“TicketSmarter”), Worldwide Reinsurance, Ltd., Digital Connect, Inc., BirdVu Jets, Inc., Kustom 440, Inc. (“Kustom 440”), Kustom Entertainment, Inc., and its majority-owned subsidiary Nobility Healthcare, LLC, collectively, “Digital Ally,” “Digital,” and the “Company”), is divided into three reportable operating segments: 1) the Video Solutions Segment, 2) the Revenue Cycle Management Segment and 3) the Ticketing Segment. The Video Solutions Segment is our legacy business that produces digital video imaging, storage products, disinfectant and related safety products for use in law enforcement, security and commercial applications. This segment includes both service and product revenues through our subscription models offering cloud and warranty solutions, and hardware sales for video and health safety solutions. The Revenue Cycle Management Segment provides working capital and back-office services to a variety of healthcare organizations throughout the country, as a monthly service fee. The 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 18. Reverse Stock Split On February 6, 2023, the Company filed a Certificate of Amendment to its Articles of Incorporation, as amended, with the Secretary of State of the State of Nevada to effect a 1-for-20 reverse stock split Business Combination In June 2023, the Company, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Clover Leaf Capital Corp., a Delaware corporation (Nasdaq: CLOE) (“Clover Leaf”), CL Merger Sub, Inc., a Nevada corporation and a wholly owned subsidiary of Clover Leaf (“Merger Sub”), Yntegra Capital Investments LLC, a Delaware limited liability company, in the capacity as the representative from and after the Effective Time (as defined in the Merger Agreement) for the stockholders of Clover Leaf in accordance with the terms and conditions of the Merger Agreement, and Kustom Entertainment, Inc., a Nevada corporation, a wholly owned subsidiary of the Company, with a focus and mission to own and produce events, festivals, and entertainment alongside its evolving primary and secondary ticketing technologies (“Kustom”). Pursuant to the Merger Agreement, subject to the terms and conditions set forth therein upon the consummation of the transactions contemplated by the Merger Agreement (the “Closing”), Merger Sub will merge with and into Kustom, with Kustom continuing as the surviving corporation in the Merger and a wholly owned subsidiary of Clover Leaf. Upon the Closing which is subject to the approval of Clover Leaf’s shareholders and the satisfaction or waiver of certain other customary closing conditions, the common stock of the combined company is expected to be listed on the Nasdaq under a mutually agreed new ticker symbol that reflects the name “Kustom Entertainment”. 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, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. The balance sheet at December 31, 2023 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, 2023. 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, 2024, the Company had a net loss attributable to common stockholders of $ 3,931,020 , net cash used in operating activities of $ 918,545 , $ 160,830 provided by investing activities and $ 1,005,027 provided by financing activities. The Company will have to restore positive operating cash flows and profitability over the next year and/or raise additional capital to fund its operational plans, meet its customary payment obligations and otherwise execute its business plan. There can be no assurance that it will be successful in restoring positive cash flows and profitability, or that it can raise additional financing when needed, and obtain it on terms acceptable or favorable to the Company. 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 (“Nobility Healthcare”) 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. upon its acquisition of Goody Tickets, LLC and TicketSmarter, LLC, to facilitate its global ticketing operations. The Company formed Worldwide Reinsurance Ltd., which is a captive insurance company domiciled in Bermuda. It will provide primarily liability insurance coverage to the Company for which insurance may not be currently available or economically feasible in today’s insurance marketplace. The Company formed Kustom 440, Inc. in 2022 to create unique entertainment experiences directly for consumers, and Kustom Entertainment, Inc. in 2023 to serve as the participant in the Business Combination. 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 the contracts with the customer. In situation where sales are to a distributor, the Company had concluded its contracts are with the distributor as the Company holds a contract bearing enforceable rights and obligations only with the distributor. As part of 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 is 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 products. 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 ticketing revenue on a gross or net basis based on management’s assessment of whether the Company is acting as a principal or agent in the transaction. The determination is based upon the evaluation of control over the event ticket, including the right to sell the ticket, prior to its transfer to the ticket buyer. The Company sells tickets held in inventory, which consists of one performance obligation, being to transfer control of an event ticket to the buyer upon confirmation of the order. The Company acts as the principal in these transactions as the ticket is owned by the Company at the time of sale, therefore controlling the ticket prior to transferring to the customer. In these transactions, revenue is recorded on a gross basis based on the value of the ticket and is recognized when an order is confirmed. Payment is typically due upon delivery of the ticket. The Company also acts as an intermediary between buyers and sellers through online secondary marketplace. Revenues derived from this marketplace primarily consist of service fees from ticketing operations, and consists of one primary performance obligation, which is facilitating the transaction between the buyer and seller, being satisfied at the time the order has been confirmed. As the Company does not control the ticket prior to the transfer, the Company acts as an agent in these transactions. Revenue is recognized on a net basis, net of the amount due to the seller when an order is confirmed, the seller is then obligated to deliver the tickets to the buyer per the seller’s listing. 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, 2024, the Company recognized revenue of $ 241,371 SCHEDULE OF CONTRACT LIABILITIES March 31, 2024 December 31, 2023 Additions/Reclass Recognized Revenue March 31, 2024 Contract liabilities, current $ 2,937,168 $ 535,598 $ 173,052 $ 3,299,714 Contract liabilities, non-current 7,340,459 13,066 68,319 7,285,206 $ 10,277,627 $ 548,664 $ 241,371 $ 10,584,920 March 31, 2023 December 31, 2022 Additions/Reclass Recognized Revenue March 31, 2023 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 Sales returns and allowances aggregated $ 93,170 117,713 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, allowance for doubtful accounts, the estimate of fair value of the lease liabilities and related right of use asset, 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. The following table shows the Company’s cash and cash equivalents by significant investment category as of March 31, 2024 and December 31, 2023: SCHEDULE OF SHORT TERM INVESTMENTS March 31, 2024 Adjusted Realized Realized Fair Value Demand deposits $ 769,982 $ — $ — $ 769,982 Short-term investments with original maturities of 90 days or less (Level 1) Money market funds 157,879 — — 157,879 $ 927,861 $ — $ — $ 927,861 December 31, 2023 Adjusted Realized Realized Fair Value Demand deposits $ 545,207 $ — $ — $ 545,207 Short-term investments with original maturities of 90 days or less (Level 1): Money market funds 135,342 — — 135,342 $ 680,549 $ — $ — $ 680,549 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 $ 250,000 296,799 29,700 Restricted Cash Restricted cash of $ 97,600 97,600 The following table provides a reconciliation of cash and cash equivalents in the consolidated balance sheets to cash, cash equivalents and restricted cash in the consolidated statements of cash flows: SCHEDULE OF RECONCILIATION OF CASH AND CASH EQUIVALENTS March 31, 2024 December 31, 2023 Cash and cash equivalents $ 927,861 $ 680,549 Long-term restricted cash included in other assets 97,600 97,600 Total cash, cash equivalents and restricted cash in the statements of cash flows $ 1,025,461 $ 778,149 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 December 31, 2023 and concluded that there was no impairment. Subsequent to completing our 2023 annual impairment test, no events or changes in circumstances were noted that required an interim goodwill impairment test. Intangible assets include deferred patent costs, license agreements, trademarks and trade names. 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. 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 November 2023, the FASB issued Accounting Standards Update No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures. In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures. |
INVENTORIES
INVENTORIES | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 2. INVENTORIES Inventories consisted of the following at March 31, 2024 and December 31, 2023: SCHEDULE OF INVENTORIES March 31, 2024 December 31, 2023 Raw material and component parts– video solutions segment $ 2,938,434 $ 3,044,653 Work-in-process– video solutions segment 26,091 20,396 Finished goods – video solutions segment 4,180,699 4,623,489 Finished goods – entertainment segment 489,854 699,204 Subtotal 7,635,078 8,387,742 Reserve for excess and obsolete inventory– video solutions segment (4,315,132 ) (4,355,666 ) Reserve for excess and obsolete inventory – entertainment segment (171,257 ) (186,795 ) Total inventories $ 3,148,689 $ 3,845,281 Finished goods inventory includes units held by potential customers and sales agents for test and evaluation purposes. The cost of such units totaled $ 51,099 42,797 |
DEBT OBLIGATIONS
DEBT OBLIGATIONS | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
DEBT OBLIGATIONS | NOTE 3. DEBT OBLIGATIONS Debt obligations is comprised of the following: SUMMARY OF DEBT OBLIGATIONS March 31, 2024 December 31, 2023 Economic injury disaster loan (EIDL) $ 146,971 $ 147,781 Contingent consideration promissory note – Nobility Healthcare Division Acquisition 64,826 129,651 Contingent consideration promissory note – Nobility Healthcare Division Acquisition 29,409 58,819 Revolving Loan Agreement 4,880,000 4,880,000 Commercial Extension of Credit- Entertainment Segment 69,643 87,928 Merchant Advances – Video Solutions Segment 1,348,000 1,350,000 Merchant Advances – Entertainment Segment 1,425,000 — Unamortized debt issuance costs (684,989 ) (540,429 ) Debt obligations 7,278,860 6,113,750 Less: current maturities of debt obligations 2,403,029 1,260,513 Debt obligations, long-term $ 4,875,831 $ 4,853,237 Debt obligations mature as follows as of March 31, 2024: SCHEDULE OF MATURITY OF DEBT OBLIGATIONS March 31, 2024 2024 $ 2,402,188 2025 4,735,589 2026 3,542 2027 3,677 2028 and thereafter 133,864 Total $ 7,278,860 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 The Company made principal payments of $ 810 1,383 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 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 $ 350,000 261,543 29,409 29,409 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 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. Management has recorded the contingent consideration promissory note at its estimated fair value of $ 650,000 617,082 64,826 64,826 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% 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 or (ii) expiration of the Private Label Agreement on December 31, 2023. During the three months ended March 31, 2024, the Entertainment segment Company’s Entertainment segment repaid the outstanding principal of $ 87,928 2024 Commercial Extension of Credit On January 22, 2024, 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 Ticket Solution Agreement. The Lender, Ticket Evolution, Inc., agreed to extend, subject to the conditions hereof, and Borrower agreed to take, a Loan for Principal Sum of $ 75,000 100,000 The advances made are recoupable from client service fees with no more than $ 25,000 275,000 205,357 69,643 Convertible Note On April 5, 2023, 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 0.001 375,000 6.50 375,000 7.50 Subject to certain conditions, within 18 months from the effectiveness date 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% The Notes rank senior to all outstanding and future indebtedness of the Company and its subsidiaries, and are secured by substantially all of the Company’s assets, as evidenced by (i) a security agreement entered into at the Closing, (ii) a trademark security agreement entered into at the Closing, (iii) a patent security agreement entered into at the Closing, (iv) a guaranty executed by all direct and indirect subsidiaries of the Company pursuant to which each of them has agreed to guaranty the obligations of the Company under the Notes, and (v) a mortgage on the Company’s headquarters building in favor of the Purchasers. Also at the Closing, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Purchasers. Pursuant to the terms of the Registration Rights Agreement, the Company has agreed to prepare and file with the SEC within the 10th business day following the First Closing (the “Filing Date”) a registration statement covering the resale of the shares of Common Stock issuable upon conversion of the Notes and exercise of the Warrants, and to use its best efforts to cause such Registration Statement to be declared effective under the Securities Act of 1933, as amended (the “Securities Act”), as promptly as possible, but in any event no later than 45 days following the Filing Date (the “Effectiveness Date”). If the Registration Statement is not filed by the Filing Date or is not declared effective by the Effectiveness Date, or under certain other circumstances described in the Registration Rights Agreement, then the Company shall be obligated to pay, as partial liquidated damages, to each Purchaser an amount in cash equal to 2% 10% The Company recognized the full warrant derivative value, with the remaining amount being allocated to the debt obligation. As the warrant derivative value exceeded the net proceeds from the issuance, the excess amount is recognized as a loss on the date of the issue date. Thus, the Company recorded a loss of $ 576,380 SCHEDULE OF WARRANT TO PURCHASE COMMON STOCK GRANTED Terms at Volatility - range 106.0 % Risk-free rate 3.36 % Dividend 0 % Remaining contractual term 5.0 Exercise price $ 5.50 7.50 Common stock issuable under the warrants 1,125,000 On June 2, 2023, the Purchasers elected to convert $ 125,000 5.00 25,000 119,750 93,386 On October 26, 2023, the Company entered into a Revolving Loan Agreement of which a portion of the net proceeds were used to repay the principal amount of the Convertible debt. The warrants associated with the convertible debt remain outstanding. Revolving Loan Agreement On October 26, 2023, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) by and between the Company, Digital Ally Healthcare, Inc., a Nevada corporation and wholly-owned subsidiary of the Company (“Digital Ally Healthcare” and, together with the Company, the “Borrower”), and Kompass Kapital Funding, LLC, a Kansas limited liability company (“Kompass”). In connection with the Loan Agreement, on October 26, 2023, the Company entered into a Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing (the “Mortgage”) by and between the Company, as grantor, and Kompass, as grantee, and issued a Revolving Note (the “Revolving Note”) to Kompass. The gross proceeds to the Company were $ 4,880,000 3,162,500 Pursuant to the Loan Agreement, Kompass agreed to make revolving loans (the “Revolving Loans”) available to the Borrower as the Borrower may from time to time request until, but not including, October 26, 2025, and in such amounts as the Borrower may from time to time request, provided, however, that the aggregate principal balance of the Revolving Loans outstanding at any time shall not exceed the lesser of $ 4,880,000 97,600 Pursuant to the Loan Agreement, the Company issued the Revolving Note to Kompass whereby the Company and Digital Ally Healthcare jointly and severally promise to pay to the order of Kompass the lesser of (i) $4,880,000.00, or (ii) the aggregate principal amount of all Revolving Loans outstanding under and pursuant to the Loan Agreement at the maturity or maturities and in the amount or amounts stated on the records of Kompass, together with interest (computed on the actual number of days elapsed on the basis of a 360 day year) at a floating per annum rate equal to the greater of (i) the Prime Rate plus four percent or (ii) eight percent, on the aggregate principal amount of all Revolving Loans outstanding from time to time as provided in the Loan Agreement. The Company entered into the Mortgage to secure its obligations under the Loan Agreement. The property mortgaged under the Mortgage consists of the Mortgaged Property. The Mortgage contains customary covenants, representations and warranties by the Company. In addition, the Company recorded debt issuance costs of $ 188,255 23,435 Merchant Cash Advances – Video Solutions Segment In November 2023, the Company obtained a short-term merchant advance, which totaled $ 1,050,000 50,000 1,000,000 1,512,000 2.9 702,000 700,000 1,348,000 During the three months ended March 31, 2024 the Company amortized $ 278,256 Merchant Cash Advances – Entertainment Segment In March 2024, the Company obtained a short-term merchant advance, which totaled $ 1,000,000 85,000 915,000 1,425,000 5.05 1,425,000 During the three months ended March 31, 2024 the Company amortized $ 63,750 |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 and December 31, 2023: SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS March 31, 2024 Level 1 Level 2 Level 3 Total Liabilities: Warrant derivative liabilities $ — $ — $ 1,718,629 $ 1,718,629 Contingent consideration promissory notes and contingent consideration earn-out agreement — — 94,235 94,235 $ — $ — $ 1,812,864 $ 1,812,864 December 31, 2023 Level 1 Level 2 Level 3 Total Liabilities: Warrant derivative liabilities $ — $ — $ 1,369,738 $ 1,369,738 Contingent consideration promissory notes and contingent consideration earn-out agreement — — 188,470 188,470 $ — $ — $ 1,558,208 $ 1,558,208 The following table represents the change in Level 3 tier value measurements for the three months ended March 31, 2024: SCHEDULE OF FAIR VALUE MEASUREMENTS CHANGE IN LEVEL 3 INPUTS Contingent Warrant Derivative Balance, December 31, 2023 $ 188,470 $ 1,369,738 Issuance of warrant derivative liabilities — — Change in fair value of warrant derivative liabilities — 348,891 Principal payments on contingent consideration promissory notes – Revenue Cycle Management Acquisitions (94,235 ) — Change in fair value of contingent consideration promissory notes - Revenue Cycle Management Acquisitions — — Balance, March 31, 2024 $ 94,235 $ 1,718,629 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | NOTE 5. ACCRUED EXPENSES Accrued expenses consisted of the following at March 31, 2024 and December 31, 2023: SCHEDULE OF ACCRUED EXPENSES March 31, 2024 December 31, 2023 Accrued warranty expense $ 20,529 $ 17,699 Accrued litigation costs 2,040,292 2,040,292 Accrued sales commissions 40,000 87,421 Accrued payroll and related fringes 161,763 367,826 Accrued sales returns and allowances 93,170 117,713 Accrued taxes 66,114 150,981 Accrued interest - related party 187,346 95,031 Customer deposits 45,380 219,462 Other 482,550 172,905 Total accrued expenses $ 3,137,144 $ 3,269,330 Accrued warranty expense was comprised of the following for the three months ended March 31, 2024: SCHEDULE OF ACCRUED WARRANTY EXPENSE Beginning balance $ 17,699 Provision for warranty expense 14,201 Charges applied to warranty reserve (11,371 ) Ending balance $ 20,529 |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2024 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 6. INCOME TAXES The effective tax rate for the three months ended March 31, 2024 and 2023 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, 2024. 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% 140.9 |
PREPAID EXPENSES
PREPAID EXPENSES | 3 Months Ended |
Mar. 31, 2024 | |
Prepaid Expenses | |
PREPAID EXPENSES | NOTE 7. PREPAID EXPENSES Prepaid expenses were the following at March 31, 2024 and December 31, 2023: SCHEDULE OF PREPAID EXPENSE March 31, 2024 December 31, 2023 Prepaid inventory $ 5,570,087 $ 5,318,939 Prepaid advertising 485,429 612,292 Other 519,497 435,137 Total prepaid expenses $ 6,575,013 $ 6,366,368 |
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 and December 31, 2023: SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT Estimated March 31, 2024 December 31, 2023 Building 25 $ 4,537,037 $ 4,537,037 Land Infinite 739,734 739,734 Office furniture, fixtures, equipment, and aircraft 3 20 826,929 2,065,092 Warehouse and production equipment 3 7 239,055 29,055 Demonstration and tradeshow equipment 3 7 87,987 87,987 Building improvements 5 7 1,328,654 1,328,654 Total cost 7,759,396 8,787,559 Less: accumulated depreciation and amortization (1,551,601 ) (1,503,857 ) Net property, plant and equipment $ 6,207,795 $ 7,283,702 Depreciation expense for the three months ended March 31, 2024 and 2023 was $ 162,712 171,631 During the three months ended March 31, 2024 the Company engaged a broker and sold its aircraft for $ 1,100,000 1,500 1,141,661 41,161 |
OPERATING LEASE
OPERATING LEASE | 3 Months Ended |
Mar. 31, 2024 | |
Operating Lease | |
OPERATING LEASE | NOTE 9. OPERATING LEASE The Company entered into an operating lease with a third party in October 2023 for copiers used for office and warehouse purposes. The terms of the lease include 48 1,786 On May 13, 2020, the Company entered into an operating lease for new warehouse and office space, which served as its new principal executive office and primary business location. 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. thirty-three months On June 30, 2021, the Company completed the acquisition of its first medical billing company, through Nobility Healthcare. Upon completion of this acquisition, Nobility Healthcare became responsible for the operating lease for the seller’s office space. The lease terms include monthly payments ranging from $ 2,648 2,774 On August 31, 2021, the Company completed the acquisition of its second acquired medical billing company, through Nobility Healthcare. Upon completion of this acquisition, Nobility Healthcare became responsible for the operating lease for the seller’s office space. The lease was renewed in April 2023 with favorable terms and payments ranging from $ 7,436 8,877 termination date in March 2030 seventy-two 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 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 to $ 4,626 , with a termination date of June 2025 . The Company is responsible for property taxes, utilities, insurance and its proportionate share of common area costs related to this location. The Company took possession of the leased facilities on January 1, 2022. The Company terminated this lease in January 2024 and reversed the right of use asset and lease liability by $ 73,894 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 operating leases was approximately $ 108,879 The weighted-average remaining lease term related to the Company’s lease liabilities as of March 31, 2023 was 4.5 The discount rate implicit within the Company’s operating leases was not generally determinable and therefore the Company determined the discount rate based on its incremental borrowing rate on the information available at commencement date. As of commencement date, the operating lease liabilities reflect a weighted average discount rate of 8% The following sets forth the operating lease right of use assets and liabilities as of March 31, 2024: SCHEDULE OF OPERATING LEASES RIGHT OF USE ASSETS AND LIABILITIES Assets: Operating lease right of use assets $ 925,128 Liabilities: Operating lease obligations-current portion $ 225,960 Operating lease obligations-less current portion 749,718 Total operating lease obligations $ 975,678 The components of lease expense were as follows for the three months ended March 31, 2024: SCHEDULE OF LEASE EXPENSE Selling, general and administrative expenses $ 108,879 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, 2024) $ 225,247 2024 288,720 2025 293,300 2026 117,492 Thereafter 235,020 Total undiscounted minimum future lease payments 1,159,779 Imputed interest (184,101 ) Total operating lease liability $ 975,678 |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 and December 31, 2023: 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, 2024 and 2023 was $ 388,278 371,478 SCHEDULE OF INTANGIBLE ASSETS March 31, 2024 December 31, 2023 Gross Accumulated Net Gross Accumulated Net Amortized intangible assets: Licenses (video solutions segment) $ 225,545 $ 92,525 $ 133,020 $ 225,545 $ 89,887 $ 135,658 Patents and trademarks (video solutions segment) 483,521 306,702 176,819 483,521 266,403 217,118 Sponsorship agreement network (entertainment segment) 5,600,000 2,893,333 2,706,667 5,600,000 2,613,333 2,986,667 SEO content (entertainment segment) 600,000 387,500 212,500 600,000 350,000 250,000 Personal seat licenses (entertainment 87,679 7,542 80,137 180,081 14,004 166,077 Software 23,653 — 23,653 - - - Website enhancements (entertainment segment) 25,630 1,878 23,752 13,500 — 13,500 Client agreements (revenue cycle management segments) 999,034 251,744 747,290 999,034 226,768 772,266 8,045,062 3,941,224 4,103,838 8,101,681 3,560,395 4,541,286 Indefinite life intangible assets: Goodwill (entertainment and revenue cycle management segments) 11,593,473 — 11,593,473 11,367,514 — 11,367,514 Trade name (entertainment segment) 900,000 — 900,000 600,000 — 600,000 Patents and trademarks pending 27,721 — 27,721 1,622 — 1,622 Total $ 20,566,256 $ 3,941,224 $ 16,625,032 $ 20,070,817 $ 3,560,395 $ 16,510,422 SCHEDULE OF ESTIMATED AMORTIZATION FOR INTANGIBLE ASSETS Year ending December 31: 2024 (April 1, to December 31, 2024) $ 1,117,290 2025 1,413,938 2026 909,400 2027 113,600 2028 and thereafter 549,610 Total $ 4,103,838 |
OTHER ASSETS
OTHER ASSETS | 3 Months Ended |
Mar. 31, 2024 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER ASSETS | NOTE 11. OTHER ASSETS Other assets were the following at March 31, 2024 and December 31, 2023: SCHEDULE OF OTHER ASSETS March 31, 2024 December 31, 2023 Lease receivable $ 5,880,809 $ 6,095,050 Restricted Cash 97,600 97,600 Other 354,776 404,382 Total other assets $ 6,333,185 $ 6,597,032 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
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. As of March 31, 2024, we are able to estimate a range of reasonably possible loss related to the Culp McCauley case, our estimate of the aggregate reasonably possible loss (in excess of any accrued amounts) was approximately $ 1.8 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 Failure to Satisfy a Continued Listing Rule On March 14, 2024, the Nasdaq Listing Qualifications staff notified Digital Ally, Inc. (the “Company”), that due to resignation of Mr. Michael J. Caulfield from the Company’s board of directors (the “Board”) effective on January 31, 2024, the Company no longer complies with the audit committee and compensation committee requirements as set forth in Listing Rule 5605 of The Nasdaq Stock Market LLC (“Nasdaq”), including the requirements that there are at least three independent directors on the Company’s audit committee and at least two independent directors on the Company’s compensation committee. The notification has no immediate effect on the Company’s listing on the Nasdaq Capital Market. In accordance with Nasdaq Listing Rules, the Company is provided a cure period until the earlier of the Company’s next annual shareholders’ meeting (or July 29, 2024 if the next shareholders’ meeting will be held before July 29, 2024) or January 31, 2025 (the “Cure Period”). If the Company does not regain compliance by within the Cure Period, Nasdaq will provide written notice that the Company’s common stock, par value $ 0.001 The management of the Company has resolved to take commercially reasonable steps to fill the vacancy on the Board with a new director who qualifies as independent under the Nasdaq Listing Rules as soon as is practical and anticipates regaining compliance during the Cure Period. However, there can be no assurance that the Company will be able to satisfy Nasdaq Listing Rule 5605 or will otherwise be in compliance with other Nasdaq listing criteria. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2024 | |
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 $ 40,695 114,848 As of March 31, 2024, 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 2,739 531 4,733 no 2,025 no 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, 2024 is as follows: SUMMARY OF STOCK OPTIONS OUTSTANDING Options Number of Shares Weighted Average Exercise Price Outstanding at December 31, 2023 53,600 $ 45.55 Granted — — Exercised — — Forfeited — — Outstanding at March 31, 2024 53,600 $ 45.55 Exercisable at March 31, 2024 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, 2024 and 2023. The aggregate intrinsic value of options outstanding was $- 0 0 0 0 As of March 31, 2024, 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, 2024: 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 6.4 37,000 6.4 $ 50.00 69.99 15,100 4.2 15,100 4.2 $ 70.00 89.99 1,500 2.1 1,500 2.1 53,600 5.6 53,600 5.6 Restricted stock grants. A summary of all restricted stock activity under the Plans for the three months ended March 31, 2024 is as follows: SUMMARY OF RESTRICTED STOCK ACTIVITY Number of shares Weighted average grant date Nonvested balance, December 31, 2023 53,875 $ 11.27 Granted 80,197 2.12 Vested (30,750 ) 10.06 Forfeited (1,125 ) 22.20 Nonvested balance, March 31, 2024 102,197 $ 4.34 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, 2024, there were $ 245,233 The nonvested balance of restricted stock vests as follows: SCHEDULE OF NON-VESTED BALANCE OF RESTRICTED STOCK Years ended Number of shares 2024 (April 1, 2024 through December 31, 2024) 1,500 2025 73,349 2026 18,349 2027 5,000 2028 4,000 |
COMMON STOCK PURCHASE WARRANTS
COMMON STOCK PURCHASE WARRANTS | 3 Months Ended |
Mar. 31, 2024 | |
Common Stock Purchase Warrants | |
COMMON STOCK PURCHASE WARRANTS | NOTE 14. COMMON STOCK PURCHASE WARRANTS 2023 Purchase Warrants On April 5, 2023, the Company issued warrants to purchase a total of 1,125,000 The Company has utilized the following assumptions in its Black-Scholes option valuation model to calculate the estimated fair value of the warrant derivative liabilities as of their date of issuance and as of March 31, 2024: SCHEDULE OF WARRANT MODIFICATION Issuance March 31, 2024 Volatility - range 106.0 % $ 108.5 % Risk-free rate 3.36 % 4.21 % Dividend 0 % 0 % Remaining contractual term 5.0 4.0 Exercise price 5.50 7.50 5.50 7.50 Common stock issuable under the warrants 1,125,000 1,125,000 The following table summarizes information about shares issuable under warrants outstanding during the three months ended March 31, 2024 and 2023: SUMMARY OF WARRANT ACTIVITY Warrants Weighted Vested Balance, December 31, 2023 1,125,000 $ 6.50 Granted — — Exercised — — Forfeited/cancelled — — Vested Balance, March 31, 2024 1,125,000 $ 6.50 The total intrinsic value of all outstanding warrants aggregated $- 0 48.2 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, 2024: 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 $ 5.50 375,000 4.0 $ 6.50 375,000 4.0 $ 7.50 375,000 4.0 1,125,000 4.0 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 3 Months Ended |
Mar. 31, 2024 | |
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 2024 Issuance of Restricted Common Stock In January 2024, the board of directors approved the grant of 55,000 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 25,197 one two years Cancellation of Restricted Stock During the three months ended March 31, 2024, the Company cancelled 1,125 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 12,248 126,239 |
NET LOSS PER SHARE
NET LOSS PER SHARE | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NOTE 16. NET 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, 2024 and 2023 are as follows: SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING AND LOSS PER SHARE OUTSTANDING 2024 2023 Three months ended March 31, 2024 2023 Numerator for basic and diluted loss per share – Net loss attributable to common stockholders $ (3,931,020 ) $ (6,105,818 ) Denominator for basic loss per share – weighted average shares outstanding 2,861,229 2,751,662 Dilutive effect of shares issuable upon conversion of convertible debt and the exercise of stock options and warrants outstanding — — Denominator for diluted loss per share – adjusted weighted average shares outstanding 2,861,229 2,751,662 Net loss per share: Basic $ (1.37 ) $ (2.22 ) Diluted $ (1.37 ) $ (2.22 ) 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, 2024 and 2023, 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. |
COUNTRY STAMPEDE ACQUISITION
COUNTRY STAMPEDE ACQUISITION | 3 Months Ended |
Mar. 31, 2024 | |
Country Stampede Acquisition [Member] | |
Business Acquisition [Line Items] | |
COUNTRY STAMPEDE ACQUISITION | NOTE 17. COUNTRY STAMPEDE ACQUISITION On March 1, 2024, Kustom 440, entered into an Asset Purchase Agreement (the “Acquisition Agreement”) with JC Entertainment, LLC, a Kansas limited liability company (“JC Entertainment”). Pursuant to the Acquisition Agreement, Kustom 440 acquired certain assets associated with a music entertainment event (“Country Stampede”), including all intellectual property arising out of and relating to Country Stampede (“Country Stampede Intellectual Property”) and certain contracts in which JC Entertainment is a party to host and operate the 2024 Country Stampede (the “Assumed Contracts”, and together with the Country Stampede Intellectual Property, the “Purchased Assets”). As consideration for acquiring the Purchased Assets, Kustom 440 paid JC Entertainment the aggregate purchase price amount $ 542,959 400,000 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 Country Stampede 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 Country Stampede 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 Country Stampede Acquisition was structured as an asset 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 Country Stampede Acquisition was allocated to tangible assets, goodwill, identifiable intangible assets, and assumed liabilities based on their preliminary estimated fair values at the time of the 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 Country Stampede Acquisition were as follows: SCHEDULE OF ESTIMATED FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED ACQUISITION As allocated As allocated (Preliminary) Description March 1, 2024 Assets acquired (provisional): Tangible assets acquired $ 305,000 Identifiable intangible assets acquired (Trademarks and trade names) 300,000 Goodwill 225,959 Liabilities assumed (288,000 ) Liabilities assumed pursuant to stock purchase agreement (288,000 ) Net assets acquired and liabilities assumed $ 542,959 Consideration: Cash paid at Country Stampede Acquisition date $ 400,000 Cash paid subsequent to closing 142,959 Total Country Stampede Acquisition purchase price $ 542,959 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. |
SEGMENT DATA
SEGMENT DATA | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
SEGMENT DATA | NOTE 18. 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 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, 2024, and March 31, 2023: SCHEDULE OF SEGMENT REPORTING 2024 2023 Three Months Ended March 31, 2024 2023 Net Revenues: Video Solutions $ 1,718,293 $ 1,899,364 Revenue Cycle Management 1,434,598 1,781,590 Entertainment 2,376,460 4,016,236 Total Net Revenues $ 5,529,351 $ 7,697,190 Gross Profit: Video Solutions $ 565,694 $ 534,195 Revenue Cycle Management 463,731 775,934 Entertainment 494,274 234,663 Total Gross Profit $ 1,523,699 $ 1,544,792 Operating Income (loss): Video Solutions $ (891,588 ) $ (1,963,186 ) Revenue Cycle Management (24,031 ) 103,765 Entertainment (642,219 ) (1,233,006 ) Corporate (2,081,196 ) (3,080,379 ) Total Operating Loss $ (3,639,034 ) $ (6,172,806 ) Depreciation and Amortization: Video Solutions $ 198,028 $ 198,122 Revenue Cycle Management 26,715 25,507 Entertainment 326,248 319,481 Total Depreciation and Amortization $ 550,991 $ 543,110 March 31, 2024 December 31, 2023 Assets (net of eliminations): Video Solutions $ 24,172,478 $ 26,396,559 Revenue Cycle Management 1,989,068 2,260,376 Entertainment 6,482,510 6,324,211 Corporate 12,520,139 12,047,663 Total Identifiable Assets $ 45,164,195 $ 47,028,809 The segments recorded noncash items effecting the gross profit and operating income (loss) through the established inventory reserves based on estimates of excess and/or obsolete current and non-current inventory. The Company recorded a reserve for excess and obsolete inventory in the video solutions segment of $ 4,315,132 171,257 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, 2024 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 19. RELATED PARTY TRANSACTIONS Transactions with Managing Member of Nobility Healthcare The Company accrued reimbursable expenses payable to Nobility, LLC totaling $ 576,690 265,241 12,379 32,181 Transactions with Related Party of TicketSmarter On September 22, 2023, a trust, the beneficiaries of which are TicketSmarter’s Chief Executive Officer and his spouse, made a loan in the amount of $ 2,325,000 375,000 13.25 2,700,000 187,346 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 20. SUBSEQUENT EVENTS Series A Preferred Stock and Series B Preferred Stock Elimination On April 5, 2024, Digital Ally, Inc., a Nevada corporation (the “Company”), filed with the Secretary of State of the State of Nevada an Elimination of Certificate of Designations of the Preferences, Rights and Limitations of the Series A Convertible Redeemable Preferred Stock (the “Series A Elimination Certificate”) and Elimination of Certificate of Designations of the Preferences, Rights and Limitations of the Series B Convertible Redeemable Preferred Stock (the “Series B Elimination Certificate”) in order to eliminate and cancel all designations, rights, preferences and limitations of the shares of the Company’s Series A Convertible Redeemable Preferred Stock, par value $ 0.001 0.001 1,400,000 100,000 Prior to the filing of the Series A Elimination Certificate, none of the 1,400,000 100,000 no Merchant Cash Advances – Video Solutions Segment In April 2024, the Company received additional advances of $ 444,000 2,144,000 2,880,000 |
NATURE OF BUSINESS AND SUMMAR_2
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Combination | Business Combination In June 2023, the Company, entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Clover Leaf Capital Corp., a Delaware corporation (Nasdaq: CLOE) (“Clover Leaf”), CL Merger Sub, Inc., a Nevada corporation and a wholly owned subsidiary of Clover Leaf (“Merger Sub”), Yntegra Capital Investments LLC, a Delaware limited liability company, in the capacity as the representative from and after the Effective Time (as defined in the Merger Agreement) for the stockholders of Clover Leaf in accordance with the terms and conditions of the Merger Agreement, and Kustom Entertainment, Inc., a Nevada corporation, a wholly owned subsidiary of the Company, with a focus and mission to own and produce events, festivals, and entertainment alongside its evolving primary and secondary ticketing technologies (“Kustom”). Pursuant to the Merger Agreement, subject to the terms and conditions set forth therein upon the consummation of the transactions contemplated by the Merger Agreement (the “Closing”), Merger Sub will merge with and into Kustom, with Kustom continuing as the surviving corporation in the Merger and a wholly owned subsidiary of Clover Leaf. Upon the Closing which is subject to the approval of Clover Leaf’s shareholders and the satisfaction or waiver of certain other customary closing conditions, the common stock of the combined company is expected to be listed on the Nasdaq under a mutually agreed new ticker symbol that reflects the name “Kustom Entertainment”. |
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, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. The balance sheet at December 31, 2023 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, 2023. |
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, 2024, the Company had a net loss attributable to common stockholders of $ 3,931,020 , net cash used in operating activities of $ 918,545 , $ 160,830 provided by investing activities and $ 1,005,027 provided by financing activities. The Company will have to restore positive operating cash flows and profitability over the next year and/or raise additional capital to fund its operational plans, meet its customary payment obligations and otherwise execute its business plan. There can be no assurance that it will be successful in restoring positive cash flows and profitability, or that it can raise additional financing when needed, and obtain it on terms acceptable or favorable to the Company. 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 (“Nobility Healthcare”) 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. upon its acquisition of Goody Tickets, LLC and TicketSmarter, LLC, to facilitate its global ticketing operations. The Company formed Worldwide Reinsurance Ltd., which is a captive insurance company domiciled in Bermuda. It will provide primarily liability insurance coverage to the Company for which insurance may not be currently available or economically feasible in today’s insurance marketplace. The Company formed Kustom 440, Inc. in 2022 to create unique entertainment experiences directly for consumers, and Kustom Entertainment, Inc. in 2023 to serve as the participant in the Business Combination. |
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 the contracts with the customer. In situation where sales are to a distributor, the Company had concluded its contracts are with the distributor as the Company holds a contract bearing enforceable rights and obligations only with the distributor. As part of 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 is 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 products. 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 ticketing revenue on a gross or net basis based on management’s assessment of whether the Company is acting as a principal or agent in the transaction. The determination is based upon the evaluation of control over the event ticket, including the right to sell the ticket, prior to its transfer to the ticket buyer. The Company sells tickets held in inventory, which consists of one performance obligation, being to transfer control of an event ticket to the buyer upon confirmation of the order. The Company acts as the principal in these transactions as the ticket is owned by the Company at the time of sale, therefore controlling the ticket prior to transferring to the customer. In these transactions, revenue is recorded on a gross basis based on the value of the ticket and is recognized when an order is confirmed. Payment is typically due upon delivery of the ticket. The Company also acts as an intermediary between buyers and sellers through online secondary marketplace. Revenues derived from this marketplace primarily consist of service fees from ticketing operations, and consists of one primary performance obligation, which is facilitating the transaction between the buyer and seller, being satisfied at the time the order has been confirmed. As the Company does not control the ticket prior to the transfer, the Company acts as an agent in these transactions. Revenue is recognized on a net basis, net of the amount due to the seller when an order is confirmed, the seller is then obligated to deliver the tickets to the buyer per the seller’s listing. 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, 2024, the Company recognized revenue of $ 241,371 SCHEDULE OF CONTRACT LIABILITIES March 31, 2024 December 31, 2023 Additions/Reclass Recognized Revenue March 31, 2024 Contract liabilities, current $ 2,937,168 $ 535,598 $ 173,052 $ 3,299,714 Contract liabilities, non-current 7,340,459 13,066 68,319 7,285,206 $ 10,277,627 $ 548,664 $ 241,371 $ 10,584,920 March 31, 2023 December 31, 2022 Additions/Reclass Recognized Revenue March 31, 2023 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 Sales returns and allowances aggregated $ 93,170 117,713 |
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, allowance for doubtful accounts, the estimate of fair value of the lease liabilities and related right of use asset, 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. The following table shows the Company’s cash and cash equivalents by significant investment category as of March 31, 2024 and December 31, 2023: SCHEDULE OF SHORT TERM INVESTMENTS March 31, 2024 Adjusted Realized Realized Fair Value Demand deposits $ 769,982 $ — $ — $ 769,982 Short-term investments with original maturities of 90 days or less (Level 1) Money market funds 157,879 — — 157,879 $ 927,861 $ — $ — $ 927,861 December 31, 2023 Adjusted Realized Realized Fair Value Demand deposits $ 545,207 $ — $ — $ 545,207 Short-term investments with original maturities of 90 days or less (Level 1): Money market funds 135,342 — — 135,342 $ 680,549 $ — $ — $ 680,549 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 $ 250,000 296,799 29,700 |
Restricted Cash | Restricted Cash Restricted cash of $ 97,600 97,600 The following table provides a reconciliation of cash and cash equivalents in the consolidated balance sheets to cash, cash equivalents and restricted cash in the consolidated statements of cash flows: SCHEDULE OF RECONCILIATION OF CASH AND CASH EQUIVALENTS March 31, 2024 December 31, 2023 Cash and cash equivalents $ 927,861 $ 680,549 Long-term restricted cash included in other assets 97,600 97,600 Total cash, cash equivalents and restricted cash in the statements of cash flows $ 1,025,461 $ 778,149 |
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 December 31, 2023 and concluded that there was no impairment. Subsequent to completing our 2023 annual impairment test, no events or changes in circumstances were noted that required an interim goodwill impairment test. Intangible assets include deferred patent costs, license agreements, trademarks and trade names. 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. |
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 November 2023, the FASB issued Accounting Standards Update No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The guidance is to be applied retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures. In December 2023, the FASB issued Accounting Standards Update No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign). ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes. The guidance is effective for annual periods beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted. We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures. |
NATURE OF BUSINESS AND SUMMAR_3
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SCHEDULE OF CONTRACT LIABILITIES | SCHEDULE OF CONTRACT LIABILITIES March 31, 2024 December 31, 2023 Additions/Reclass Recognized Revenue March 31, 2024 Contract liabilities, current $ 2,937,168 $ 535,598 $ 173,052 $ 3,299,714 Contract liabilities, non-current 7,340,459 13,066 68,319 7,285,206 $ 10,277,627 $ 548,664 $ 241,371 $ 10,584,920 March 31, 2023 December 31, 2022 Additions/Reclass Recognized Revenue March 31, 2023 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 |
SCHEDULE OF SHORT TERM INVESTMENTS | Cash and cash equivalents include funds on hand, in bank and short-term investments with original maturities of ninety (90) days or less. The following table shows the Company’s cash and cash equivalents by significant investment category as of March 31, 2024 and December 31, 2023: SCHEDULE OF SHORT TERM INVESTMENTS March 31, 2024 Adjusted Realized Realized Fair Value Demand deposits $ 769,982 $ — $ — $ 769,982 Short-term investments with original maturities of 90 days or less (Level 1) Money market funds 157,879 — — 157,879 $ 927,861 $ — $ — $ 927,861 December 31, 2023 Adjusted Realized Realized Fair Value Demand deposits $ 545,207 $ — $ — $ 545,207 Short-term investments with original maturities of 90 days or less (Level 1): Money market funds 135,342 — — 135,342 $ 680,549 $ — $ — $ 680,549 |
SCHEDULE OF RECONCILIATION OF CASH AND CASH EQUIVALENTS | The following table provides a reconciliation of cash and cash equivalents in the consolidated balance sheets to cash, cash equivalents and restricted cash in the consolidated statements of cash flows: SCHEDULE OF RECONCILIATION OF CASH AND CASH EQUIVALENTS March 31, 2024 December 31, 2023 Cash and cash equivalents $ 927,861 $ 680,549 Long-term restricted cash included in other assets 97,600 97,600 Total cash, cash equivalents and restricted cash in the statements of cash flows $ 1,025,461 $ 778,149 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF INVENTORIES | Inventories consisted of the following at March 31, 2024 and December 31, 2023: SCHEDULE OF INVENTORIES March 31, 2024 December 31, 2023 Raw material and component parts– video solutions segment $ 2,938,434 $ 3,044,653 Work-in-process– video solutions segment 26,091 20,396 Finished goods – video solutions segment 4,180,699 4,623,489 Finished goods – entertainment segment 489,854 699,204 Subtotal 7,635,078 8,387,742 Reserve for excess and obsolete inventory– video solutions segment (4,315,132 ) (4,355,666 ) Reserve for excess and obsolete inventory – entertainment segment (171,257 ) (186,795 ) Total inventories $ 3,148,689 $ 3,845,281 |
DEBT OBLIGATIONS (Tables)
DEBT OBLIGATIONS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
SUMMARY OF DEBT OBLIGATIONS | Debt obligations is comprised of the following: SUMMARY OF DEBT OBLIGATIONS March 31, 2024 December 31, 2023 Economic injury disaster loan (EIDL) $ 146,971 $ 147,781 Contingent consideration promissory note – Nobility Healthcare Division Acquisition 64,826 129,651 Contingent consideration promissory note – Nobility Healthcare Division Acquisition 29,409 58,819 Revolving Loan Agreement 4,880,000 4,880,000 Commercial Extension of Credit- Entertainment Segment 69,643 87,928 Merchant Advances – Video Solutions Segment 1,348,000 1,350,000 Merchant Advances – Entertainment Segment 1,425,000 — Unamortized debt issuance costs (684,989 ) (540,429 ) Debt obligations 7,278,860 6,113,750 Less: current maturities of debt obligations 2,403,029 1,260,513 Debt obligations, long-term $ 4,875,831 $ 4,853,237 |
SCHEDULE OF MATURITY OF DEBT OBLIGATIONS | Debt obligations mature as follows as of March 31, 2024: SCHEDULE OF MATURITY OF DEBT OBLIGATIONS March 31, 2024 2024 $ 2,402,188 2025 4,735,589 2026 3,542 2027 3,677 2028 and thereafter 133,864 Total $ 7,278,860 |
SCHEDULE OF WARRANT TO PURCHASE COMMON STOCK GRANTED | SCHEDULE OF WARRANT TO PURCHASE COMMON STOCK GRANTED Terms at Volatility - range 106.0 % Risk-free rate 3.36 % Dividend 0 % Remaining contractual term 5.0 Exercise price $ 5.50 7.50 Common stock issuable under the warrants 1,125,000 |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 and December 31, 2023: SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS March 31, 2024 Level 1 Level 2 Level 3 Total Liabilities: Warrant derivative liabilities $ — $ — $ 1,718,629 $ 1,718,629 Contingent consideration promissory notes and contingent consideration earn-out agreement — — 94,235 94,235 $ — $ — $ 1,812,864 $ 1,812,864 December 31, 2023 Level 1 Level 2 Level 3 Total Liabilities: Warrant derivative liabilities $ — $ — $ 1,369,738 $ 1,369,738 Contingent consideration promissory notes and contingent consideration earn-out agreement — — 188,470 188,470 $ — $ — $ 1,558,208 $ 1,558,208 |
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, 2024: SCHEDULE OF FAIR VALUE MEASUREMENTS CHANGE IN LEVEL 3 INPUTS Contingent Warrant Derivative Balance, December 31, 2023 $ 188,470 $ 1,369,738 Issuance of warrant derivative liabilities — — Change in fair value of warrant derivative liabilities — 348,891 Principal payments on contingent consideration promissory notes – Revenue Cycle Management Acquisitions (94,235 ) — Change in fair value of contingent consideration promissory notes - Revenue Cycle Management Acquisitions — — Balance, March 31, 2024 $ 94,235 $ 1,718,629 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF ACCRUED EXPENSES | Accrued expenses consisted of the following at March 31, 2024 and December 31, 2023: SCHEDULE OF ACCRUED EXPENSES March 31, 2024 December 31, 2023 Accrued warranty expense $ 20,529 $ 17,699 Accrued litigation costs 2,040,292 2,040,292 Accrued sales commissions 40,000 87,421 Accrued payroll and related fringes 161,763 367,826 Accrued sales returns and allowances 93,170 117,713 Accrued taxes 66,114 150,981 Accrued interest - related party 187,346 95,031 Customer deposits 45,380 219,462 Other 482,550 172,905 Total accrued expenses $ 3,137,144 $ 3,269,330 |
SCHEDULE OF ACCRUED WARRANTY EXPENSE | Accrued warranty expense was comprised of the following for the three months ended March 31, 2024: SCHEDULE OF ACCRUED WARRANTY EXPENSE Beginning balance $ 17,699 Provision for warranty expense 14,201 Charges applied to warranty reserve (11,371 ) Ending balance $ 20,529 |
PREPAID EXPENSES (Tables)
PREPAID EXPENSES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Prepaid Expenses | |
SCHEDULE OF PREPAID EXPENSE | Prepaid expenses were the following at March 31, 2024 and December 31, 2023: SCHEDULE OF PREPAID EXPENSE March 31, 2024 December 31, 2023 Prepaid inventory $ 5,570,087 $ 5,318,939 Prepaid advertising 485,429 612,292 Other 519,497 435,137 Total prepaid expenses $ 6,575,013 $ 6,366,368 |
PROPERTY, PLANT AND EQUIPMENT (
PROPERTY, PLANT AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT | Property, plant and equipment consisted of the following at March 31, 2024 and December 31, 2023: SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT Estimated March 31, 2024 December 31, 2023 Building 25 $ 4,537,037 $ 4,537,037 Land Infinite 739,734 739,734 Office furniture, fixtures, equipment, and aircraft 3 20 826,929 2,065,092 Warehouse and production equipment 3 7 239,055 29,055 Demonstration and tradeshow equipment 3 7 87,987 87,987 Building improvements 5 7 1,328,654 1,328,654 Total cost 7,759,396 8,787,559 Less: accumulated depreciation and amortization (1,551,601 ) (1,503,857 ) Net property, plant and equipment $ 6,207,795 $ 7,283,702 |
OPERATING LEASE (Tables)
OPERATING LEASE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024: SCHEDULE OF OPERATING LEASES RIGHT OF USE ASSETS AND LIABILITIES Assets: Operating lease right of use assets $ 925,128 Liabilities: Operating lease obligations-current portion $ 225,960 Operating lease obligations-less current portion 749,718 Total operating lease obligations $ 975,678 |
SCHEDULE OF LEASE EXPENSE | The components of lease expense were as follows for the three months ended March 31, 2024: SCHEDULE OF LEASE EXPENSE Selling, general and administrative expenses $ 108,879 |
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, 2024) $ 225,247 2024 288,720 2025 293,300 2026 117,492 Thereafter 235,020 Total undiscounted minimum future lease payments 1,159,779 Imputed interest (184,101 ) Total operating lease liability $ 975,678 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS | SCHEDULE OF INTANGIBLE ASSETS March 31, 2024 December 31, 2023 Gross Accumulated Net Gross Accumulated Net Amortized intangible assets: Licenses (video solutions segment) $ 225,545 $ 92,525 $ 133,020 $ 225,545 $ 89,887 $ 135,658 Patents and trademarks (video solutions segment) 483,521 306,702 176,819 483,521 266,403 217,118 Sponsorship agreement network (entertainment segment) 5,600,000 2,893,333 2,706,667 5,600,000 2,613,333 2,986,667 SEO content (entertainment segment) 600,000 387,500 212,500 600,000 350,000 250,000 Personal seat licenses (entertainment 87,679 7,542 80,137 180,081 14,004 166,077 Software 23,653 — 23,653 - - - Website enhancements (entertainment segment) 25,630 1,878 23,752 13,500 — 13,500 Client agreements (revenue cycle management segments) 999,034 251,744 747,290 999,034 226,768 772,266 8,045,062 3,941,224 4,103,838 8,101,681 3,560,395 4,541,286 Indefinite life intangible assets: Goodwill (entertainment and revenue cycle management segments) 11,593,473 — 11,593,473 11,367,514 — 11,367,514 Trade name (entertainment segment) 900,000 — 900,000 600,000 — 600,000 Patents and trademarks pending 27,721 — 27,721 1,622 — 1,622 Total $ 20,566,256 $ 3,941,224 $ 16,625,032 $ 20,070,817 $ 3,560,395 $ 16,510,422 |
SCHEDULE OF ESTIMATED AMORTIZATION FOR INTANGIBLE ASSETS | SCHEDULE OF ESTIMATED AMORTIZATION FOR INTANGIBLE ASSETS Year ending December 31: 2024 (April 1, to December 31, 2024) $ 1,117,290 2025 1,413,938 2026 909,400 2027 113,600 2028 and thereafter 549,610 Total $ 4,103,838 |
OTHER ASSETS (Tables)
OTHER ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
SCHEDULE OF OTHER ASSETS | Other assets were the following at March 31, 2024 and December 31, 2023: SCHEDULE OF OTHER ASSETS March 31, 2024 December 31, 2023 Lease receivable $ 5,880,809 $ 6,095,050 Restricted Cash 97,600 97,600 Other 354,776 404,382 Total other assets $ 6,333,185 $ 6,597,032 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 is as follows: SUMMARY OF STOCK OPTIONS OUTSTANDING Options Number of Shares Weighted Average Exercise Price Outstanding at December 31, 2023 53,600 $ 45.55 Granted — — Exercised — — Forfeited — — Outstanding at March 31, 2024 53,600 $ 45.55 Exercisable at March 31, 2024 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, 2024: 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 6.4 37,000 6.4 $ 50.00 69.99 15,100 4.2 15,100 4.2 $ 70.00 89.99 1,500 2.1 1,500 2.1 53,600 5.6 53,600 5.6 |
SUMMARY OF RESTRICTED STOCK ACTIVITY | A summary of all restricted stock activity under the Plans for the three months ended March 31, 2024 is as follows: SUMMARY OF RESTRICTED STOCK ACTIVITY Number of shares Weighted average grant date Nonvested balance, December 31, 2023 53,875 $ 11.27 Granted 80,197 2.12 Vested (30,750 ) 10.06 Forfeited (1,125 ) 22.20 Nonvested balance, March 31, 2024 102,197 $ 4.34 |
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 2024 (April 1, 2024 through December 31, 2024) 1,500 2025 73,349 2026 18,349 2027 5,000 2028 4,000 |
COMMON STOCK PURCHASE WARRANTS
COMMON STOCK PURCHASE WARRANTS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Common Stock Purchase Warrants | |
SCHEDULE OF WARRANT MODIFICATION | SCHEDULE OF WARRANT MODIFICATION Issuance March 31, 2024 Volatility - range 106.0 % $ 108.5 % Risk-free rate 3.36 % 4.21 % Dividend 0 % 0 % Remaining contractual term 5.0 4.0 Exercise price 5.50 7.50 5.50 7.50 Common stock issuable under the warrants 1,125,000 1,125,000 |
SUMMARY OF WARRANT ACTIVITY | The following table summarizes information about shares issuable under warrants outstanding during the three months ended March 31, 2024 and 2023: SUMMARY OF WARRANT ACTIVITY Warrants Weighted Vested Balance, December 31, 2023 1,125,000 $ 6.50 Granted — — Exercised — — Forfeited/cancelled — — Vested Balance, March 31, 2024 1,125,000 $ 6.50 |
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, 2024: 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 $ 5.50 375,000 4.0 $ 6.50 375,000 4.0 $ 7.50 375,000 4.0 1,125,000 4.0 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024 and 2023 are as follows: SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING AND LOSS PER SHARE OUTSTANDING 2024 2023 Three months ended March 31, 2024 2023 Numerator for basic and diluted loss per share – Net loss attributable to common stockholders $ (3,931,020 ) $ (6,105,818 ) Denominator for basic loss per share – weighted average shares outstanding 2,861,229 2,751,662 Dilutive effect of shares issuable upon conversion of convertible debt and the exercise of stock options and warrants outstanding — — Denominator for diluted loss per share – adjusted weighted average shares outstanding 2,861,229 2,751,662 Net loss per share: Basic $ (1.37 ) $ (2.22 ) Diluted $ (1.37 ) $ (2.22 ) |
COUNTRY STAMPEDE ACQUISITION (T
COUNTRY STAMPEDE ACQUISITION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Country Stampede Acquisition [Member] | |
Business Acquisition [Line Items] | |
SCHEDULE OF ESTIMATED FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED ACQUISITION | SCHEDULE OF ESTIMATED FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED ACQUISITION As allocated As allocated (Preliminary) Description March 1, 2024 Assets acquired (provisional): Tangible assets acquired $ 305,000 Identifiable intangible assets acquired (Trademarks and trade names) 300,000 Goodwill 225,959 Liabilities assumed (288,000 ) Liabilities assumed pursuant to stock purchase agreement (288,000 ) Net assets acquired and liabilities assumed $ 542,959 Consideration: Cash paid at Country Stampede Acquisition date $ 400,000 Cash paid subsequent to closing 142,959 Total Country Stampede Acquisition purchase price $ 542,959 |
SEGMENT DATA (Tables)
SEGMENT DATA (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
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, 2024, and March 31, 2023: SCHEDULE OF SEGMENT REPORTING 2024 2023 Three Months Ended March 31, 2024 2023 Net Revenues: Video Solutions $ 1,718,293 $ 1,899,364 Revenue Cycle Management 1,434,598 1,781,590 Entertainment 2,376,460 4,016,236 Total Net Revenues $ 5,529,351 $ 7,697,190 Gross Profit: Video Solutions $ 565,694 $ 534,195 Revenue Cycle Management 463,731 775,934 Entertainment 494,274 234,663 Total Gross Profit $ 1,523,699 $ 1,544,792 Operating Income (loss): Video Solutions $ (891,588 ) $ (1,963,186 ) Revenue Cycle Management (24,031 ) 103,765 Entertainment (642,219 ) (1,233,006 ) Corporate (2,081,196 ) (3,080,379 ) Total Operating Loss $ (3,639,034 ) $ (6,172,806 ) Depreciation and Amortization: Video Solutions $ 198,028 $ 198,122 Revenue Cycle Management 26,715 25,507 Entertainment 326,248 319,481 Total Depreciation and Amortization $ 550,991 $ 543,110 March 31, 2024 December 31, 2023 Assets (net of eliminations): Video Solutions $ 24,172,478 $ 26,396,559 Revenue Cycle Management 1,989,068 2,260,376 Entertainment 6,482,510 6,324,211 Corporate 12,520,139 12,047,663 Total Identifiable Assets $ 45,164,195 $ 47,028,809 |
SCHEDULE OF CONTRACT LIABILITIE
SCHEDULE OF CONTRACT LIABILITIES (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Contract liabilities, current, beginning | $ 2,937,168 | $ 2,154,874 |
Contract liabilities, current, additions/reclass | 535,598 | 562,809 |
Contract liabilities, current, revenue recognized | 173,052 | 92,813 |
Contract liabilities, current, ending | 3,299,714 | 2,624,870 |
Contract liabilities, non-current, beginning | 7,340,459 | 5,818,082 |
Contract liabilities, non-current, additions/reclass | 13,066 | 868,211 |
Contract liabilities, non-current, revenue recognized | 68,319 | 370,646 |
Contract liabilities, non-current, ending | 7,285,206 | 6,315,647 |
Contract liabilities, current, beginning | 10,277,627 | 7,972,956 |
Contract liabilities, additions/reclass | 548,664 | 1,431,020 |
Contract liabilities, revenue recognized | 241,371 | 463,459 |
Contract liabilities, ending | $ 10,584,920 | $ 8,940,517 |
SCHEDULE OF SHORT TERM INVESTME
SCHEDULE OF SHORT TERM INVESTMENTS (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Adjusted cost | $ 927,861 | $ 680,549 |
Realized gains | ||
Realized Losses | ||
Fair value | 927,861 | 680,549 |
Cash [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Adjusted cost | 769,982 | 545,207 |
Realized gains | ||
Realized Losses | ||
Fair value | 769,982 | 545,207 |
Money Market Funds [Member] | ||
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items] | ||
Adjusted cost | 157,879 | 135,342 |
Realized gains | ||
Realized Losses | ||
Fair value | $ 157,879 | $ 135,342 |
SCHEDULE OF RECONCILIATION OF C
SCHEDULE OF RECONCILIATION OF CASH AND CASH EQUIVALENTS (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 927,861 | $ 680,549 | ||
Long-term restricted cash included in other assets | 97,600 | 97,600 | ||
Total cash, cash equivalents and restricted cash in the statements of cash flows | $ 1,025,461 | $ 778,149 | $ 2,859,723 | $ 3,532,199 |
NATURE OF BUSINESS AND SUMMAR_4
NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 3 Months Ended | 12 Months Ended | ||||
Feb. 06, 2023 | Mar. 31, 2024 USD ($) Segments $ / shares | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) $ / shares | Mar. 14, 2024 $ / shares | Aug. 23, 2022 $ / shares | |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||
Reverse stock split | 1-for-20 reverse stock split | |||||
Net loss | $ 3,931,020 | |||||
Net cash used in operating activities | 918,545 | $ 1,216,876 | ||||
Net cash used in investing activities | 160,830 | (70,645) | ||||
Net cash used in financing activities | 1,005,027 | 615,045 | ||||
Contract liabilities, revenue recognized | 241,371 | $ 463,459 | ||||
Sales return and allowances | 93,170 | $ 117,713 | ||||
Cash, FDIC insured amount | 250,000 | |||||
Uninsured balance | 296,799 | 29,700 | ||||
Restricted cash | $ 97,600 | $ 97,600 | ||||
Number of operating segments | Segments | 3 | |||||
Merger Agreement [Member] | Predecessor Common Stock [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Common stock, par value | $ / shares | $ 0.001 | |||||
Merger Agreement [Member] | Registrant Common Stock [Member] | ||||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||||
Common stock, par value | $ / shares | $ 0.001 |
SCHEDULE OF INVENTORIES (Detail
SCHEDULE OF INVENTORIES (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Raw material and component parts– video solutions segment | $ 2,938,434 | $ 3,044,653 |
Work-in-process– video solutions segment | 26,091 | 20,396 |
Finished goods – video solutions segment | 4,180,699 | 4,623,489 |
Finished goods – entertainment segment | 489,854 | 699,204 |
Subtotal | 7,635,078 | 8,387,742 |
Reserve for excess and obsolete inventory– video solutions segment | (4,315,132) | (4,355,666) |
Reserve for excess and obsolete inventory – entertainment segment | (171,257) | (186,795) |
Total inventories | $ 3,148,689 | $ 3,845,281 |
INVENTORIES (Details Narrative)
INVENTORIES (Details Narrative) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Inventory Disclosure [Abstract] | ||
Inventory cost | $ 51,099 | $ 42,797 |
SUMMARY OF DEBT OBLIGATIONS (De
SUMMARY OF DEBT OBLIGATIONS (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Jun. 02, 2023 |
Debt Disclosure [Abstract] | |||
Economic injury disaster loan (EIDL) | $ 146,971 | $ 147,781 | $ 125,000 |
Contingent consideration promissory note – Nobility Healthcare Division Acquisition | 64,826 | 129,651 | |
Contingent consideration promissory note – Nobility Healthcare Division Acquisition | 29,409 | 58,819 | |
Revolving Loan Agreement | 4,880,000 | 4,880,000 | |
Commercial Extension of Credit- Entertainment Segment | 69,643 | 87,928 | |
Merchant Advances – Video Solutions Segment | 1,348,000 | 1,350,000 | |
Merchant Advances – Entertainment Segment | 1,425,000 | ||
Unamortized debt issuance costs | (684,989) | (540,429) | |
Debt obligations | 7,278,860 | 6,113,750 | |
Less: current maturities of debt obligations | 2,403,029 | 1,260,513 | |
Debt obligations, long-term | $ 4,875,831 | $ 4,853,237 |
SCHEDULE OF MATURITY OF DEBT OB
SCHEDULE OF MATURITY OF DEBT OBLIGATIONS (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Disclosure [Abstract] | ||
2024 | $ 2,402,188 | |
2025 | 4,735,589 | |
2026 | 3,542 | |
2027 | 3,677 | |
2028 and thereafter | 133,864 | |
Debt obligations | $ 7,278,860 | $ 6,113,750 |
SCHEDULE OF WARRANT TO PURCHASE
SCHEDULE OF WARRANT TO PURCHASE COMMON STOCK GRANTED (Details) - Warrant [Member] - $ / shares | Apr. 05, 2023 | Mar. 31, 2024 |
Debt Instrument [Line Items] | ||
Volatility - range | 106% | |
Risk-free rate | 3.36% | |
Dividend | 0% | |
Remaining contractual term | 5 years | |
Common stock issuable under the warrants | 1,125,000 | 1,125,000 |
Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Exercise price | $ 5.50 | |
Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Exercise price | $ 7.50 |
DEBT OBLIGATIONS (Details Narra
DEBT OBLIGATIONS (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||||||||||||
Feb. 08, 2024 | Jan. 22, 2024 | Nov. 30, 2023 | Oct. 26, 2023 | Jun. 02, 2023 | Apr. 05, 2023 | Feb. 23, 2023 | Aug. 31, 2021 | Jun. 30, 2021 | May 12, 2020 | Mar. 31, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Mar. 14, 2024 | Dec. 31, 2023 | |
Short-Term Debt [Line Items] | |||||||||||||||
Face value | $ 125,000 | $ 146,971 | $ 146,971 | $ 147,781 | |||||||||||
Principal loan through remittances | $ 87,928 | $ 87,928 | |||||||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||
Issuance of warrant derivative liabilities | $ 576,380 | ||||||||||||||
Loss on conversion of convertibleNote | $ 93,386 | ||||||||||||||
Debt issuance costs | 188,255 | ||||||||||||||
Proceeds merchant advances | 700,000 | ||||||||||||||
Merchant advances outstanding balance | $ 1,348,000 | 1,348,000 | $ 1,350,000 | ||||||||||||
Merchant advances entertainment segment outstanding balance | 1,425,000 | 1,425,000 | |||||||||||||
Merchant Cash Advances [Member] | |||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||
Amortization of debt discount | 278,256 | ||||||||||||||
Short-term merchant advance | $ 1,050,000 | ||||||||||||||
Origination fees total | 50,000 | ||||||||||||||
Net proceeds of origination fees | 1,000,000 | ||||||||||||||
Short-term debt | $ 1,512,000 | ||||||||||||||
Loan interest rate | 2.9 | ||||||||||||||
Repayments of short-term debt | 702,000 | ||||||||||||||
Merchant Cash Advances Entertainment Segment [Member] | |||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||
Amortization of debt discount | 63,750 | ||||||||||||||
Short-term merchant advance | 1,000,000 | 1,000,000 | |||||||||||||
Origination fees total | 85,000 | ||||||||||||||
Net proceeds of origination fees | 915,000 | ||||||||||||||
Short-term debt | $ 1,425,000 | 1,425,000 | |||||||||||||
Loan interest rate | 5.05 | ||||||||||||||
Revolving Loan Agreement [Member] | |||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||
Proceeds from secured convertible debt | $ 4,880,000 | ||||||||||||||
Proceeds from secured convertible debt | 3,162,500 | ||||||||||||||
Principal amount outstanding of loans | 4,880,000 | ||||||||||||||
Debt instrument, repaid, principal | $ 97,600 | ||||||||||||||
Loan agreement description | the Company issued the Revolving Note to Kompass whereby the Company and Digital Ally Healthcare jointly and severally promise to pay to the order of Kompass the lesser of (i) $4,880,000.00, or (ii) the aggregate principal amount of all Revolving Loans outstanding under and pursuant to the Loan Agreement at the maturity or maturities and in the amount or amounts stated on the records of Kompass, together with interest (computed on the actual number of days elapsed on the basis of a 360 day year) at a floating per annum rate equal to the greater of (i) the Prime Rate plus four percent or (ii) eight percent, on the aggregate principal amount of all Revolving Loans outstanding from time to time as provided in the Loan Agreement. | ||||||||||||||
Amortization of debt discount | $ 23,435 | ||||||||||||||
Registration Rights Agreement [Member] | |||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||
Contractual interest rate | 10% | 10% | |||||||||||||
Purchaser percentage | 2% | 2% | |||||||||||||
Warrant [Member] | |||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||
Aggregate shares exercisable | 1,125,000 | ||||||||||||||
Comprised shares | 1,125,000 | 1,125,000 | 1,125,000 | ||||||||||||
Warrant One [Member] | |||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||
Comprised shares | 375,000 | ||||||||||||||
Warrant exercise price | $ 5.50 | ||||||||||||||
Common stock, par value | $ 0.001 | ||||||||||||||
Warrant Two [Member] | |||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||
Comprised shares | 375,000 | ||||||||||||||
Warrant exercise price | $ 6.50 | ||||||||||||||
Warrant Three [Member] | |||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||
Comprised shares | 375,000 | ||||||||||||||
Warrant exercise price | $ 7.50 | ||||||||||||||
Common Stock [Member] | |||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||
Common stock, convertible, conversion price, increase | $ 5 | ||||||||||||||
Debt instrument, redemption price, percentage | 110% | ||||||||||||||
Shares issued price per share | $ 5 | ||||||||||||||
Conversion of convertible securities, shares | 25,000 | ||||||||||||||
Conversion of convertible securities | $ 119,750 | ||||||||||||||
2020 Small Business Administration Notes [Member] | |||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||
Proceeds from loans | $ 150,000 | ||||||||||||||
Face value | $ 150,000 | $ 810 | $ 810 | ||||||||||||
Contractual interest rate | 3.75% | ||||||||||||||
principal payment | $ 731 | ||||||||||||||
Interest expense | 1,383 | ||||||||||||||
June Contingent Payment Note [Member] | |||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||
Face value | $ 350,000 | ||||||||||||||
Contractual interest rate | 3% | ||||||||||||||
principal payment | $ 261,543 | ||||||||||||||
Principal amount | 975,000 | ||||||||||||||
Debt instrument fair value | $ 350,000 | 29,409 | 29,409 | 29,409 | |||||||||||
August Contingent Payment Note [Member] | |||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||
Face value | $ 650,000 | ||||||||||||||
Contractual interest rate | 3% | ||||||||||||||
principal payment | $ 617,082 | ||||||||||||||
Principal amount | 3,000,000 | ||||||||||||||
Debt instrument fair value | $ 650,000 | $ 64,826 | 64,826 | ||||||||||||
Increase in estimated fair value | $ 64,826 | ||||||||||||||
Twenty Twenty Three Commercial Extension Of Credit [Member] | |||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||
Line of credit | $ 1,000,000 | ||||||||||||||
Borrower percentage | 25% | ||||||||||||||
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 or (ii) expiration of the Private Label Agreement on December 31, 2023. | ||||||||||||||
2024 Commercial Extension Of Credit [Member] | |||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||
Line of credit | $ 75,000 | ||||||||||||||
Monthly advances | $ 100,000 | ||||||||||||||
Client fees | $ 25,000 | ||||||||||||||
Deposits received | 275,000 | ||||||||||||||
Advance payments | 205,357 | ||||||||||||||
Outstanding balance | $ 69,643 | ||||||||||||||
Securities Purchase Agreement [Member] | |||||||||||||||
Short-Term Debt [Line Items] | |||||||||||||||
Contractual interest rate | 10% | ||||||||||||||
Principal amount | $ 3,000,000 | ||||||||||||||
Proceeds from convertible debt | 2,700,000 | ||||||||||||||
Principal amount | $ 3,000,000 |
SCHEDULE OF FINANCIAL ASSETS AN
SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | $ 1,812,864 | $ 1,558,208 |
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 | 94,235 | 188,470 |
Warrant Derivative Liability [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | 1,718,629 | 1,369,738 |
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 1 [Member] | Warrant Derivative Liability [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 2 [Member] | Warrant Derivative Liability [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 | 1,812,864 | 1,558,208 |
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 | 94,235 | 188,470 |
Fair Value, Inputs, Level 3 [Member] | Warrant Derivative Liability [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities, fair value | $ 1,718,629 | $ 1,369,738 |
SCHEDULE OF FAIR VALUE MEASUREM
SCHEDULE OF FAIR VALUE MEASUREMENTS CHANGE IN LEVEL 3 INPUTS (Details) | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Short-Term Debt [Line Items] | |
Beginning balance | $ 1,558,208 |
Issuance of warrant derivative liabilities | (576,380) |
Ending balance | 1,812,864 |
Contingent Consideration Promissory Note [Member] | |
Short-Term Debt [Line Items] | |
Beginning balance | 188,470 |
Issuance of warrant derivative liabilities | |
Change in fair value of warrant derivative liabilities | |
Principal payments on contingent consideration promissory notes - Revenue Cycle Management Acquisitions | (94,235) |
Change in fair value of contingent consideration promissory notes - Revenue Cycle Management Acquisitions | |
Ending balance | 94,235 |
Warrant Derivative Liabilities [Member] | |
Short-Term Debt [Line Items] | |
Beginning balance | 1,369,738 |
Issuance of warrant derivative liabilities | |
Change in fair value of warrant derivative liabilities | 348,891 |
Principal payments on contingent consideration promissory notes - Revenue Cycle Management Acquisitions | |
Change in fair value of contingent consideration promissory notes - Revenue Cycle Management Acquisitions | |
Ending balance | $ 1,718,629 |
SCHEDULE OF ACCRUED EXPENSES (D
SCHEDULE OF ACCRUED EXPENSES (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Payables and Accruals [Abstract] | ||
Accrued warranty expense | $ 20,529 | $ 17,699 |
Accrued litigation costs | 2,040,292 | 2,040,292 |
Accrued sales commissions | 40,000 | 87,421 |
Accrued payroll and related fringes | 161,763 | 367,826 |
Accrued sales returns and allowances | 93,170 | 117,713 |
Accrued taxes | 66,114 | 150,981 |
Accrued interest - related party | 187,346 | 95,031 |
Customer deposits | 45,380 | 219,462 |
Other | 482,550 | 172,905 |
Total accrued expenses | $ 3,137,144 | $ 3,269,330 |
SCHEDULE OF ACCRUED WARRANTY EX
SCHEDULE OF ACCRUED WARRANTY EXPENSE (Details) | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Payables and Accruals [Abstract] | |
Beginning balance | $ 17,699 |
Provision for warranty expense | 14,201 |
Charges applied to warranty reserve | (11,371) |
Ending balance | $ 20,529 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | ||
Statutory rate valuation allowances | 100% | 100% |
Deferred tax assets valuation allowance percentage | 100% | |
Operating loss carryforwards | $ 140.9 |
SCHEDULE OF PREPAID EXPENSE (De
SCHEDULE OF PREPAID EXPENSE (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Prepaid Expenses | ||
Prepaid inventory | $ 5,570,087 | $ 5,318,939 |
Prepaid advertising | 485,429 | 612,292 |
Other | 519,497 | 435,137 |
Total prepaid expenses | $ 6,575,013 | $ 6,366,368 |
SCHEDULE OF PROPERTY, PLANT AND
SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Building | $ 4,537,037 | $ 4,537,037 |
Land | 739,734 | 739,734 |
Office furniture, fixtures, equipment, and aircraft | 826,929 | 2,065,092 |
Warehouse and production equipment | 239,055 | 29,055 |
Demonstration and tradeshow equipment | 87,987 | 87,987 |
Building improvements | 1,328,654 | 1,328,654 |
Total cost | 7,759,396 | 8,787,559 |
Less: accumulated depreciation and amortization | (1,551,601) | (1,503,857) |
Net property, plant and equipment | $ 6,207,795 | $ 7,283,702 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Useful Life | 25 years | |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] | us-gaap:UsefulLifeTermOfLeaseMember | |
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, 2024 | Mar. 31, 2023 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $ 162,712 | $ 171,631 |
Sold aircraft | 1,100,000 | |
Closing cost | 1,500 | |
Carrying amount | 1,141,661 | |
Loss on sale of assets | (41,661) | |
Aircraft [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Loss on sale of assets | $ 41,161 |
SCHEDULE OF OPERATING LEASES RI
SCHEDULE OF OPERATING LEASES RIGHT OF USE ASSETS AND LIABILITIES (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Operating Lease | ||
Operating lease right of use assets | $ 925,128 | $ 1,053,159 |
Operating lease obligations-current portion | 225,960 | 279,538 |
Operating lease obligations-less current portion | 749,718 | $ 827,836 |
Total operating lease obligations | $ 975,678 |
SCHEDULE OF LEASE EXPENSE (Deta
SCHEDULE OF LEASE EXPENSE (Details) | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Selling, General and Administrative Expenses [Member] | |
Selling, general and administrative expenses | $ 108,879 |
SCHEDULE OF FUTURE MINIMUM LEAS
SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS (Details) | Mar. 31, 2024 USD ($) |
Operating Lease | |
2023 (April 1, to December 31, 2024) | $ 225,247 |
2024 | 288,720 |
2025 | 293,300 |
2026 | 117,492 |
Thereafter | 235,020 |
Total undiscounted minimum future lease payments | 1,159,779 |
Imputed interest | (184,101) |
Total operating lease liability | $ 975,678 |
OPERATING LEASE (Details Narrat
OPERATING LEASE (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||||||
Jan. 02, 2022 | Sep. 01, 2021 | Aug. 31, 2021 | May 13, 2020 | Oct. 31, 2023 | Jun. 30, 2021 | Mar. 31, 2024 | Mar. 31, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Weighted-average remaining lease term | 4 years 6 months | |||||||
Lease liability | $ 73,894 | $ (517,039) | ||||||
Second Medical Billing Company [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Lessor, operating lease, description | termination date in March 2030 | |||||||
Weighted-average remaining lease term | 75 months | |||||||
Goody Tickets, LLC and TicketSmarter, LLC [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Lessor, operating lease, description | termination date of December 2022 | |||||||
Private Medical Billing Company [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Lessor, operating lease, description | termination date of June 2025 | |||||||
Minimum [Member] | First Medical Billing Company [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease, payments | $ 2,648 | |||||||
Minimum [Member] | Second Medical Billing Company [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease, payments | $ 7,436 | |||||||
Minimum [Member] | Goody Tickets, LLC and TicketSmarter, LLC [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease, payments | $ 7,211 | |||||||
Minimum [Member] | Private Medical Billing Company [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease, payments | $ 4,233 | |||||||
Maximum [Member] | First Medical Billing Company [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease, payments | $ 2,774 | |||||||
Maximum [Member] | Second Medical Billing Company [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease, payments | $ 8,877 | |||||||
Maximum [Member] | Goody Tickets, LLC and TicketSmarter, LLC [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease, payments | $ 7,364 | |||||||
Maximum [Member] | Private Medical Billing Company [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease, payments | $ 4,626 | |||||||
October 2023 [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Lease term | 48 months | |||||||
Operating lease, payments | $ 1,786 | |||||||
Warehouse And Office Space [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Lease term | 36 months | |||||||
Lessor, operating lease, description | termination date of December 2026. | |||||||
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 | |||||||
Office Space and Copier [Member] | ||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||
Operating lease | $ 108,879 | |||||||
Discount rate | 8% |
SCHEDULE OF INTANGIBLE ASSETS (
SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | $ 20,566,256 | $ 20,070,817 |
Accumulated amortization | 3,941,224 | 3,560,395 |
Net carrying value | 16,625,032 | 16,510,422 |
Amortized Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 8,045,062 | 8,101,681 |
Accumulated amortization | 3,941,224 | 3,560,395 |
Net carrying value | 4,103,838 | 4,541,286 |
Amortized Intangible Assets [Member] | Licenses [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 225,545 | 225,545 |
Accumulated amortization | 92,525 | 89,887 |
Net carrying value | 133,020 | 135,658 |
Amortized Intangible Assets [Member] | Patents and Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 483,521 | 483,521 |
Accumulated amortization | 306,702 | 266,403 |
Net carrying value | 176,819 | 217,118 |
Amortized Intangible Assets [Member] | Sponsorship Agreement Network [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 5,600,000 | 5,600,000 |
Accumulated amortization | 2,893,333 | 2,613,333 |
Net carrying value | 2,706,667 | 2,986,667 |
Amortized Intangible Assets [Member] | SEO Content [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 600,000 | 600,000 |
Accumulated amortization | 387,500 | 350,000 |
Net carrying value | 212,500 | 250,000 |
Amortized Intangible Assets [Member] | Personal Seat Licenses (Entertainment Segment) [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 87,679 | 180,081 |
Accumulated amortization | 7,542 | 14,004 |
Net carrying value | 80,137 | 166,077 |
Amortized Intangible Assets [Member] | Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 23,653 | |
Accumulated amortization | ||
Net carrying value | 23,653 | |
Amortized Intangible Assets [Member] | Website Enhancements Entertainment Segment [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 25,630 | 13,500 |
Accumulated amortization | 1,878 | |
Net carrying value | 23,752 | 13,500 |
Amortized Intangible Assets [Member] | Client agreements (revenue cycle management segments) [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 999,034 | 999,034 |
Accumulated amortization | 251,744 | 226,768 |
Net carrying value | 747,290 | 772,266 |
Unamortized Intangible Assets [Member] | Goodwill [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 11,593,473 | 11,367,514 |
Accumulated amortization | ||
Net carrying value | 11,593,473 | 11,367,514 |
Unamortized Intangible Assets [Member] | Trade Name [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 900,000 | 600,000 |
Accumulated amortization | ||
Net carrying value | 900,000 | 600,000 |
Unamortized Intangible Assets [Member] | Patents and Trademarks Pending [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross value | 27,721 | 1,622 |
Accumulated amortization | ||
Net carrying value | $ 27,721 | $ 1,622 |
SCHEDULE OF ESTIMATED AMORTIZAT
SCHEDULE OF ESTIMATED AMORTIZATION FOR INTANGIBLE ASSETS (Details) | Mar. 31, 2024 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 (April 1, to December 31, 2024) | $ 1,117,290 |
2025 | 1,413,938 |
2026 | 909,400 |
2027 | 113,600 |
2028 and thereafter | 549,610 |
Total | $ 4,103,838 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 388,278 | $ 371,478 |
SCHEDULE OF OTHER ASSETS (Detai
SCHEDULE OF OTHER ASSETS (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Lease receivable | $ 5,880,809 | $ 6,095,050 |
Restricted Cash | 97,600 | 97,600 |
Other | 354,776 | 404,382 |
Total other assets | $ 6,333,185 | $ 6,597,032 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | Mar. 31, 2024 | Mar. 14, 2024 | Dec. 31, 2023 |
Commitments and Contingencies Disclosure [Abstract] | |||
Aggregate carrying amount of litigation loss | $ 1.8 | ||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 |
SUMMARY OF STOCK OPTIONS OUTSTA
SUMMARY OF STOCK OPTIONS OUTSTANDING (Details) - Stock Options [Member] | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Options outstanding, beginning balance | shares | 53,600 |
Weighted average exercise price, outstanding, beginning balance | $ / shares | $ 45.55 |
Options granted | shares | |
Weighted average exercise price, granted | $ / shares | |
Options exercised | shares | |
Weighted average exercise price, exercised | $ / shares | |
Options forfeited | shares | |
Weighted average exercise price, forfeited | $ / shares | |
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, 2024 $ / 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 | 5 years 7 months 6 days |
Number of options, exercisable | 53,600 |
Weighted average remaining contractual life, exercisable options | 5 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 | 6 years 4 months 24 days |
Number of options, exercisable | 37,000 |
Weighted average remaining contractual life, exercisable options | 6 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 | 4 years 2 months 12 days |
Number of options, exercisable | 15,100 |
Weighted average remaining contractual life, exercisable options | 4 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 | 2 years 1 month 6 days |
Number of options, exercisable | 1,500 |
Weighted average remaining contractual life, exercisable options | 2 years 1 month 6 days |
SUMMARY OF RESTRICTED STOCK ACT
SUMMARY OF RESTRICTED STOCK ACTIVITY (Details) - Restricted Stock [Member] | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of restricted shares, non-vested beginning balance | shares | 53,875 |
Weighted average grant date fair value, non-vested beginning balance | $ / shares | $ 11.27 |
Number of restricted shares, granted | shares | 80,197 |
Weighted average grant date fair value, granted | $ / shares | $ 2.12 |
Number of restricted shares, vested | shares | (30,750) |
Weighted average grant date fair value, vested | $ / shares | $ 10.06 |
Number of restricted shares, forfeited | shares | (1,125) |
Weighted average grant date fair value, forfeited | $ / shares | $ 22.20 |
Number of restricted shares, non-vested ending balance | shares | 102,197 |
Weighted average grant date fair value, non-vested ending balance | $ / shares | $ 4.34 |
SCHEDULE OF NON-VESTED BALANCE
SCHEDULE OF NON-VESTED BALANCE OF RESTRICTED STOCK (Details) | Mar. 31, 2024 shares |
Share-Based Payment Arrangement [Abstract] | |
2024 (April 1, 2024 through December 31, 2024) | 1,500 |
2025 | 73,349 |
2026 | 18,349 |
2027 | 5,000 |
2028 | 4,000 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Share-based payment arrangement, expense | $ 40,695 | $ 114,848 | |
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 | $ 245,233 | ||
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 unavailable for issuance | 2,739 | ||
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] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Shares unexercised and outstanding | 0 | ||
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) - Warrant [Member] | Mar. 31, 2024 shares | Apr. 05, 2023 shares |
Common stock issuable under the warrants | 1,125,000 | 1,125,000 |
Measurement Input, Price Volatility [Member] | ||
Warrants measurement input | 108.5 | 106 |
Measurement Input, Risk Free Interest Rate [Member] | ||
Warrants measurement input | 4.21 | 3.36 |
Measurement Input, Expected Dividend Rate [Member] | ||
Warrants measurement input | 0 | 0 |
Measurement Input, Expected Term [Member] | ||
Remaining contractual term | 4 years | 5 years |
Measurement Input, Exercise Price [Member] | Minimum [Member] | ||
Warrants measurement input | 5.50 | 5.50 |
Measurement Input, Exercise Price [Member] | Maximum [Member] | ||
Warrants measurement input | 7.50 | 7.50 |
SUMMARY OF WARRANT ACTIVITY (De
SUMMARY OF WARRANT ACTIVITY (Details) - Warrant [Member] | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Warrants, vested, beginning balance | shares | 1,125,000 |
Weighted average exercise price, vested, beginning balance | $ / shares | $ 6.50 |
Warrants, granted | shares | |
Weighted average exercise price, granted | $ / shares | |
Warrants, exercised | shares | |
Weighted average exercise price, exercised | $ / shares | |
Warrants, forfeited/cancelled | shares | |
Weighted average exercise price, forfeited/cancelled | $ / shares | |
Warrants, vested, ending balance | shares | 1,125,000 |
Weighted average exercise price, vested, ending balance | $ / shares | $ 6.50 |
SUMMARY OF RANGE OF EXERCISE PR
SUMMARY OF RANGE OF EXERCISE PRICES AND WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE OF WARRANTS (Details) | 3 Months Ended |
Mar. 31, 2024 $ / shares shares | |
Outstanding and exercisable warrants, weighted average remaining contractual life | 48 years 2 months 12 days |
Warrant [Member] | |
Outstanding and exercisable warrants, number of warrants | 1,125,000 |
Outstanding and exercisable warrants, weighted average remaining contractual life | 4 years |
Warrant [Member] | Range One [Member] | |
Outstanding and exercisable warrants, exercise price | $ / shares | $ 5.50 |
Outstanding and exercisable warrants, number of warrants | 375,000 |
Outstanding and exercisable warrants, weighted average remaining contractual life | 4 years |
Warrant [Member] | Range Two [Member] | |
Outstanding and exercisable warrants, exercise price | $ / shares | $ 6.50 |
Outstanding and exercisable warrants, number of warrants | 375,000 |
Outstanding and exercisable warrants, weighted average remaining contractual life | 4 years |
Warrant [Member] | Range Three [Member] | |
Outstanding and exercisable warrants, exercise price | $ / shares | $ 7.50 |
Outstanding and exercisable warrants, number of warrants | 375,000 |
Outstanding and exercisable warrants, weighted average remaining contractual life | 4 years |
COMMON STOCK PURCHASE WARRANT_2
COMMON STOCK PURCHASE WARRANTS (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Apr. 05, 2023 | Mar. 31, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Outstanding and exercisable warrants, weighted average remaining contractual life | 48 years 2 months 12 days | ||
Warrant [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Warrant to purchase | 1,125,000 | 1,125,000 | |
Intrinsic value of outstanding warrants | $ 0 | $ 0 | |
Outstanding and exercisable warrants, weighted average remaining contractual life | 4 years | ||
2023 Purchase Warrants [Member] | |||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||
Warrant to purchase | 1,125,000 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Feb. 06, 2023 | Jan. 10, 2023 | Jan. 31, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Cancellation of restricted stock, shares | 1,125 | ||||
Reverse stock split | 1-for-20 reverse stock split | ||||
Net income (loss) attributable to noncontrolling interest | $ (12,248) | $ 126,239 | |||
Nobility Healthcare LLC [Member] | |||||
Subsidiary, ownership percentage, parent | 49% | ||||
Net income (loss) attributable to noncontrolling interest | $ 12,248 | $ 126,239 | |||
Nobility Healthcare LLC [Member] | |||||
Equity method investment, ownership percentage | 51% | ||||
Officers [Member] | |||||
Common stock issuance granted | 22,500 | 55,000 | |||
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 | 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 | 25,197 | |||
New Employees [Member] | Minimum [Member] | |||||
Vesting period | 1 year | 1 year | |||
New Employees [Member] | Maximum [Member] | |||||
Vesting period | 2 years | 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, 2024 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Numerator for basic income loss per share | $ (3,931,020) | $ (6,105,818) |
Numerator for diluted loss per share | $ (3,931,020) | $ (6,105,818) |
Denominator for basic loss per share – weighted average shares outstanding | 2,861,229 | 2,751,662 |
Dilutive effect of shares issuable upon conversion of convertible debt and the exercise of stock options and warrants outstanding | ||
Denominator for diluted loss per share – adjusted weighted average shares outstanding | 2,861,229 | 2,751,662 |
Basic | $ (1.37) | $ (2.22) |
Diluted | $ (1.37) | $ (2.22) |
SCHEDULE OF ESTIMATED FAIR VALU
SCHEDULE OF ESTIMATED FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED ACQUISITION (Details) - Country Stampede Acquisition [Member] | Mar. 01, 2024 USD ($) |
Business Acquisition [Line Items] | |
Tangible assets acquired | $ 305,000 |
Identifiable intangible assets acquired (Trademarks and trade names) | 300,000 |
Goodwill | 225,959 |
Liabilities assumed pursuant to stock purchase agreement | (288,000) |
Net assets acquired and liabilities assumed | 542,959 |
Cash paid at Country Stampede Acquisition date | 400,000 |
Cash paid subsequent to closing | 142,959 |
Acquisition purchase price | $ 542,959 |
COUNTRY STAMPEDE ACQUISITION (D
COUNTRY STAMPEDE ACQUISITION (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 01, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | |
Business Acquisition [Line Items] | |||
Cash | $ 400,000 | ||
JC Entertainment LLC [Member] | |||
Business Acquisition [Line Items] | |||
Aggregate purchase price | $ 542,959 | ||
Cash | $ 400,000 |
SCHEDULE OF SEGMENT REPORTING (
SCHEDULE OF SEGMENT REPORTING (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Segment Reporting Information [Line Items] | |||
Total Net Revenues | $ 5,529,351 | $ 7,697,190 | |
Total Gross Profit | 1,523,699 | 1,544,792 | |
Total Operating Loss | (3,639,034) | (6,172,806) | |
Total Depreciation and Amortization | 550,991 | 543,110 | |
Total identifiable assets | 45,164,195 | $ 47,028,809 | |
Video Solutions [Member] | |||
Segment Reporting Information [Line Items] | |||
Total identifiable assets | 24,172,478 | 26,396,559 | |
Revenue Cycle Management [Member] | |||
Segment Reporting Information [Line Items] | |||
Total identifiable assets | 1,989,068 | 2,260,376 | |
Entertainment Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Total identifiable assets | 6,482,510 | 6,324,211 | |
Corporate Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Total identifiable assets | 12,520,139 | $ 12,047,663 | |
Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Total Net Revenues | 5,529,351 | 7,697,190 | |
Total Gross Profit | 1,523,699 | 1,544,792 | |
Total Operating Loss | (3,639,034) | (6,172,806) | |
Total Depreciation and Amortization | 550,991 | 543,110 | |
Operating Segments [Member] | Video Solutions [Member] | |||
Segment Reporting Information [Line Items] | |||
Total Net Revenues | 1,718,293 | 1,899,364 | |
Total Gross Profit | 565,694 | 534,195 | |
Total Operating Loss | (891,588) | (1,963,186) | |
Total Depreciation and Amortization | 198,028 | 198,122 | |
Operating Segments [Member] | Revenue Cycle Management [Member] | |||
Segment Reporting Information [Line Items] | |||
Total Net Revenues | 1,434,598 | 1,781,590 | |
Total Gross Profit | 463,731 | 775,934 | |
Total Operating Loss | (24,031) | 103,765 | |
Total Depreciation and Amortization | 26,715 | 25,507 | |
Operating Segments [Member] | Entertainment Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Total Net Revenues | 2,376,460 | 4,016,236 | |
Total Gross Profit | 494,274 | 234,663 | |
Total Operating Loss | (642,219) | (1,233,006) | |
Total Depreciation and Amortization | 326,248 | 319,481 | |
Operating Segments [Member] | Corporate Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Total Operating Loss | $ (2,081,196) | $ (3,080,379) |
SEGMENT DATA (Details Narrative
SEGMENT DATA (Details Narrative) | 3 Months Ended |
Mar. 31, 2024 USD ($) Segments | |
Segment Reporting Information [Line Items] | |
Number of operating segments | Segments | 3 |
Video Solutions [Member] | |
Segment Reporting Information [Line Items] | |
Inventory reserve | $ 4,315,132 |
Entertainment Segment [Member] | |
Segment Reporting Information [Line Items] | |
Inventory reserve | $ 171,257 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Oct. 02, 2023 | Sep. 22, 2023 | |
Related Party Transaction [Line Items] | |||||
Notes payable current | $ 2,700,000 | $ 2,700,000 | |||
Nobility LLC [Member] | |||||
Related Party Transaction [Line Items] | |||||
Accrued reimbursable expenses payable | 576,690 | $ 265,241 | |||
Nobility LLC [Member] | Operating Agreement [Member] | |||||
Related Party Transaction [Line Items] | |||||
Management fees | 12,379 | $ 32,181 | |||
Related Party [Member] | |||||
Related Party Transaction [Line Items] | |||||
Notes payable current | 2,700,000 | $ 2,325,000 | |||
Business combination, contingent consideration, asset | $ 375,000 | ||||
Interest rate | 13.25% | ||||
Accrued interest | $ 187,346 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | 1 Months Ended | |||
Apr. 30, 2024 | Dec. 31, 2022 | Apr. 05, 2024 | Apr. 04, 2024 | |
Subsequent Event [Member] | Merchant Cash Advances [Member] | ||||
Subsequent Event [Line Items] | ||||
Additional advance | $ 444,000 | |||
Inception total | 2,144,000 | |||
Repayments of Debt | $ 2,880,000 | |||
Series A Convertible Redeemable Preferred Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Stock issued during period, shares, new issues | 1,400,000 | |||
Series A Convertible Redeemable Preferred Stock [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Preferred stock, par value | $ 0.001 | |||
Series B Convertible Redeemable Preferred Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Stock issued during period, shares, new issues | 100,000 | |||
Series B Convertible Redeemable Preferred Stock [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Preferred stock, par value | $ 0.001 | |||
Series A Preferred Stock [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Preferred stock, shares authorized | 1,400,000 | |||
Shares to be issued | 0 | |||
Series B Preferred Stock [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Preferred stock, shares authorized | 100,000 | |||
Shares to be issued | 0 |