DIGITAL ALLY INC
For the period ended Sep 30, 2024. Filed Dec 30, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Dec 30, 2024
KUST$3.16-0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-16.
0001493152-24-032891
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-12-30.
0001493152-24-052422
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 193 previous paragraphs and 206 current paragraphs.
110 unchanged; 60 reworded; 35 added; 15 removed; 8 previous and 1 current paragraphs rearranged.
Tables are not compared: 39 previous and 39 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (35)
Current report
Product revenues for the three months ended September 30, 2024 and 2023 were $803,945 and $2,095,237 respectively, a decrease of $1,291,292 (62%), due to the following factors:
Current report
Service and other revenues for the three months ended September 30, 2024 and 2023 were $3,247,766 and $4,242,462, respectively, a decrease of $994,696 (23%), due to the following factors:
Current report
Cost of service revenues as a percentage of service revenues for the revenue cycle management operating segment remained consistent at 58% for the three months ended September 30, 2024 as compared to 62% for the three months ended September 30, 2023.
Current report
***Research and development expense.***Our research and development expenses totalled $210,818 and $564,146 for the three months ended September 30, 2024 and 2023, respectively which represents a decrease of $353,328 (63%). We have focused on controlling our expenditures on bringing new products to market, including updates and improvements to current products in response to our decline in revenues. The decrease in research and development expense reflects the large cut-back in our engineering staff and research activities in order to right-size our expenses in this area with our revenues.
Current report
***Goodwill and intangible asset impairment charge.***We performed an interim impairment test as of the last day of the fiscal third quarter of 2024 as management determined that a triggering event had occurred resulting from the additional decline in demand for our services, prolonged economic uncertainty, the fact that the split-off transaction did not occur when and as expected and a further decrease in our stock price. Therefore, we performed an interim impairment test as of the September 30, 2024 for our reporting units with remaining goodwill.
Current report
As a result of our September 30, 2024 interim impairment test, we concluded that the carrying amount of the revenue cycle management and entertainment reporting units exceeded their estimated fair value. Thus, we recorded a non-cash goodwill impairment charge of $4,322,000, representing a portion of the goodwill balance for the revenue cycle management segment, which was included in goodwill and intangible asset impairment charge on our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024. In addition, we recorded a non-cash goodwill impairment charge of $307,000, representing a portion of the goodwill balance for the entertainment segment, which was included in goodwill and intangible asset impairment charge on our Condensed Consolidated Statements of Operations for the three months ended September 30, 2024. The goodwill impairment was primarily driven by recent performance of the entertainment reporting unit since our annual impairment testing date, as well as a delay in the projected timing of recovery.
Current report
During the three months ended September 30, 2024, we concluded that the carrying amount of a trade name/trademark related to the entertainment segment exceeded its estimated fair value and we recorded a non-cash impairment charge of $201,000, which was included in goodwill and intangible asset impairment charge on our Condensed Consolidated Statements of Operations for the three months ended September 30, 2024. The charge was primarily driven by the split-off transaction not being completed when and as expected and our recent revenue performance of the related business given a decline in demand and overall economic uncertainty. The remaining balance for this trade name/trademark was $699,000 as of September 30, 2024.
Current report
Interest income increased slightly to $13,775 for the three months ended September 30, 2024, from $12,986 in the same period of 2024.
Current report
During the third quarter of 2024, the Company negotiated a termination of its lease on its former headquarters. As a result, the Company recorded a gain of $9,385 on the termination during the three months ended September 30, 2024.
Current report
On March 1, 2024, the Company obtained a short-term merchant advance, which totalled $1,000,000, from a single lender to fund operations. The Company modified/amended the underlying loan agreement twice during the three months ended September 30, 2024. The modifications were both deemed to be extinguishments of debt resulting in a $310,505 total loss during the three and nine months ended September 30, 2024.
Current report
Gain on Sale of Property, Plant and Equipment
Current report
During the three months ended September 30, 2024, the Company sold its building for $5,900,000 less closing costs of $7,194. The carrying amount of the building on the date of sale was $5,461,623. As a result of the sale the Company recorded a gain of $431,183 in the Consolidated Statement of Operation during the three months ended September 30, 2024.
Current report
As a result of the above results of operations, we reported a net loss of $5,470,712, and $3,679,043 for the three months ended September 30, 2024 and 2023, respectively, an increase of $1,791,669 (49%).
Current report
For the Nine months Ended September 30, 2024 and 2023
Current report
Product revenues for the nine months ended September 30, 2024 and 2023 were $4,577,392 and $7,626,706 respectively, a decrease of $3,049,314 (40%), due to the following factors:
Current report
Service and other revenues for the nine months ended September 30, 2024 and 2023 were $10,619,905 and $14,687,813, respectively, a decrease of $4,067,908 (28%), due to the following factors:
Current report
***Research and development expense.***Our research and development expenses totalled $1,244,060 and $2,039,361 for the nine months ended September 30, 2024 and 2023, respectively which represents a decrease of $795,301 (39%). We have focused on controlling our expenditures on bringing new products to market, including updates and improvements to current products in response to our decline in revenues. The decrease in research and development expense reflects the large cut-back in our engineering staff and research activities in order to right-size our expenses in this area with our revenues.
Current report
***Selling, advertising and promotional expenses.***Selling, advertising and promotional expense totalled $1,902,489 and $5,885,097 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $3,982,608 (68%). The decrease in selling, advertising and promotional expenses reflects the large cut-back in selling staff and promotional and advertising activities in order to right-size our expenses in this area with our revenues. In addition, the decrease is attributable to the reduction in new sponsorships being entered into by the Company and its subsidiary TicketSmarter.
Current report
***Goodwill and intangible asset impairment charge.***We performed an interim impairment test as of the last day of the fiscal third quarter of 2024 as management determined that a triggering event had occurred resulting from the additional decline in demand for our services, prolonged economic uncertainty, the fact that the split-off transaction did not occur when and as expected and a further decrease in our stock price. Therefore, we performed an interim impairment test as of the September 30, 2024 for our reporting units with remaining goodwill.
Current report
As a result of our September 30, 2024 interim impairment test, we concluded that the carrying amount of the revenue cycle management and entertainment reporting units exceeded their estimated fair value. Thus, we recorded a non-cash goodwill impairment charge of $4,322,000, representing a portion of the goodwill balance for the revenue cycle management segment, which was included in goodwill and intangible asset impairment charge on our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024. In addition, we recorded a non-cash goodwill impairment charge of $307,000, representing a portion of the goodwill balance for the entertainment segment, which was included in goodwill and intangible asset impairment charge on our Condensed Consolidated Statements of Operations for the nine months ended September 30, 2024. The goodwill impairment was primarily driven by recent performance of the entertainment reporting unit since our annual impairment testing date, as well as a delay in the projected timing of recovery.
Current report
During the three months ended September 30, 2024, we concluded that the carrying amount of a trade name/trademark related to the entertainment segment exceeded its estimated fair value and we recorded a non-cash impairment charge of $201,000, which was included in goodwill and intangible asset impairment charge on our Condensed Consolidated Statements of Operations for the nine months ended September 30, 2024. The charge was primarily driven by the split-off transaction not being completed when and as expected and our recent revenue performance of the related business given a decline in demand and overall economic uncertainty. The remaining balance for this trade name/trademark was $699,000 as of September 30, 2024.
Current report
Other income (expense)
Current report
Gain on Extinguishment of Liabilities
Current report
The gain on extinguishment of liabilities was $507,304 for the nine months ended September 30, 2023, which reflects income related to the entertainment segment’s ability to negotiate down payables and contract liabilities during the period. The Company utilized funds from the related party note payable to resolve numerous outstanding payables at a discounted rate, the discount received was recognized as a gain on extinguishment of liabilities in the statement of operations for the nine months ended September 30, 2023.
Current report
On March 1, 2024, the Company obtained a short-term merchant advance for its entertainment segment, which totalled $1,000,000, from a single lender to fund operations. The Company modified/amended the underlying loan agreement twice during the nine months ended September 30, 2024. The modifications were both deemed to be extinguishments of debt resulting in a $310,505 total loss during the three and nine months ended September 30, 2024.
Current report
Gain on Sale of Property, Plant and Equipment
Current report
Change in Fair Value of Contingent Consideration Promissory Notes
Current report
During the nine months ended September 30, 2023, The Company recognized a gain on the change in fair value of contingent consideration promissory notes of $177,909. This is in connection with the four acquisitions made by our revenue cycle management segment. There was no similar transaction during the nine months ended September 30, 2024.
Current report
As a result of the above results of operations, we reported a net loss of $14,424,531 and $17,979,171 for the nine months ended September 30, 2024 and 2023, respectively, an improvement of $3,554,640 (20%).
Current report
We performed an interim impairment test as of the last day of the fiscal third quarter of 2024 as management determined that a triggering event had occurred resulting from the additional decline in demand for our services, prolonged economic uncertainty, the fact that the split-off transaction did not occur when and as expected and a further decrease in our stock price. Therefore, we performed an interim impairment test as of the September 30, 2024 for our reporting units with remaining goodwill.
Current report
The fair value of each reporting unit was estimated using a weighting of the income and market valuation approaches. The income approach applied a fair value methodology to each reporting unit based on discounted cash flows. This analysis requires significant judgments, including estimation of future cash flows, which is dependent on internally-developed forecasts of revenue and profitability, estimation of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average cost of capital, which is risk-adjusted to reflect the specific risk profile of the reporting unit being tested. The weighted average cost of capital used in our most recent impairment test ranged from 21% to 32.5%. We also applied a market approach, which develops a value correlation based on the market capitalization of similar publicly traded companies, referred to as a multiple, to apply to the operating results of the reporting units. The primary market multiples used are revenue and earnings before interest, taxes, depreciation, and amortization. The income and market approaches were equally weighted in our most recent annual impairment test, for all of the reporting units.
Current report
The combined fair values for all reporting units were then reconciled to our aggregate market value of our shares of common stock on the date of valuation, while considering a reasonable control premium. We consider a reporting unit’s fair value to be substantially in excess of the reporting unit’s carrying value at a 20% premium or greater. Based on our most recent impairment test, the video solutions reporting unit’s fair value was substantially in excess of its carrying value, while the revenue cycle management and entertainment segments were determined to be impaired.
Current report
We held goodwill of $5,480,966 as of September 30, 2024 and December 31, 2023, related to businesses within our revenue cycle management segment. We held goodwill of $6,112,507 and $5,886,548 as of September 30, 2024 and December 31, 2023, respectively, related to businesses within our entertainment segment. As a result of our September 30, 2024 interim impairment test, we concluded that the carrying amount of the revenue cycle management and the entertainment reporting units exceeded its estimated fair values. Thus, we recorded a non-cash goodwill impairment charge of $4,322,000, related to the goodwill carrying balance for the revenue cycle management segment, and a non-cash goodwill impairment charge of $307,000, related to the goodwill carrying balance for the entertainment segment, both of which was included in goodwill and intangible asset impairment charge on our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024. The goodwill impairment was primarily driven by recent performance of the revenue cycle management and entertainment reporting units since our annual impairment testing date, as well as a delay in the projected timing of recovery. The remaining balance for the goodwill carrying balance related to businesses within our revenue cycle management segment and entertainment segment was $1,158,966 and $5,805,507, respectively as of September 30, 2024.
Current report
We held indefinite-lived trade names/trademarks of $900,000 and $600,000 as of September 30, 2024 and December 31, 2023, respectively, related to businesses within our entertainment segment.
Current report
During the three months ended September 30, 2024, we concluded that the carrying amount of a trade name/trademark related to the entertainment segment exceeded its estimated fair value and we recorded a non-cash impairment charge of $201,000, which was included in goodwill and intangible asset impairment charge on our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2024. The charge was primarily driven by the split-off transaction not being completed when and as expected and our recent revenue and operating performance of the related business given a decline in demand and overall economic uncertainty. The remaining balance for this trade name/trademark was $699,000 as of September 30, 2024.
Removed paragraphs (15)
Previous report
Product revenues for the three months ended June 30, 2024 and 2023 were $2,207,601 and $3,077,661 respectively, a decrease of $870,060 (28%), due to the following factors:
Previous report
Service and other revenues for the three months ended June 30, 2024 and 2023 were $3,408,634 and $5,201,971, respectively, a decrease of $1,793,337 (34%), due to the following factors:
Previous report
We recorded $4,135,001 and $4,542,461 in reserves for obsolete and excess inventories at June 30, 2024 and December 31, 2023, respectively. Total raw materials, component parts, and work-in-progress were $2,630,162 and $3,065,049 at June 30, 2024 and December 31, 2023, respectively, a decrease of $434,887 (14%). Finished goods balances were $3,722,972 and $5,322,693 at June 30, 2024 and December 31, 2023, respectively, a decrease of $1,599,721 (30%) which was attributable to a decrease in finished goods from our entertainment segment. The small decrease in the inventory reserve is primarily due to the reduction in finished goods and movement of excess inventory, offset by the decrease in reserve at the entertainment segment. We believe the reserves are appropriate given our inventory levels as of June 30, 2024.
Previous report
***Research and development expense.***We continue to focus on bringing new products to market, including updates and improvements to current products. Our research and development expenses totaled $545,776 and $540,276 for the three months ended June 30, 2024 and 2023, respectively. Most of our engineers are dedicated to research and development activities for new products, primarily the new generation of body-worn cameras, EVO-HD and EVO Fleet that can be located in multiple places in a vehicle. We expect our research and development activities will continue to trend higher in future quarters as we continue to expand our product offerings based on our new body-worn camera and EVO-HD product platform and as we outsource more development projects. We consider our research and development capabilities and new product focus to be a competitive advantage and intend to continue to invest in this area on a prudent basis and consistent with our financial resources.
Previous report
***Selling, advertising and promotional expenses.***Selling, advertising and promotional expense totaled $728,906 and $2,104,625 for the three months ended June 30, 2024 and 2023, respectively, a decrease of $1,357,719 (65%). Promotional and advertising expenses represent the primary component of these costs and totaled $387,179 during the three months ended June 30, 2024, compared to $1,654,593 during the three months ended June 30, 2023, a decrease of $1,267,414 (77%). The decrease is primarily attributable to the reduction in new sponsorships being entered into by the Company. Additionally, TicketSmarter remains active in sponsorship and advertising, as it continues to build its brand and gain recognition.
Previous report
As a result of the above results of operations, we reported a net loss of $5,010,551 and $8,320,549 for the three months ended June 30, 2024 and 2023, respectively, a decrease of $3,309,998 (40%).
Previous report
For the Six Months Ended June 30, 2024 and 2023
Previous report
Product revenues for the six months ended June 30, 2024 and 2023 were $3,773,447 and $5,531,469 respectively, a decrease of $1,758,022 (32%), due to the following factors:
Previous report
Service and other revenues for the six months ended June 30, 2024 and 2023 were $7,372,139 and $10,445,351, respectively, a decrease of $3,073,212 (29%), due to the following factors:
Previous report
We recorded $4,135,001 and $4,542,461 in reserves for obsolete and excess inventories at June 30, 2024 and December 31, 2023, respectively. Total raw materials, component parts, and work-in-progress were $2,630,162 and $3,065,049 at June 30, 2024 and December 31, 2023, respectively, a decrease of $434,887 (14%). Finished goods balances were $3,722,972 and $5,322,693 at June 30, 2024 and December 31, 2023, respectively, a decrease of $1,599,721 (30%) which was attributable to a decrease in finished goods from our entertainment segment. The small decrease in the inventory reserve is primarily due to the reduction in finished goods and movement of excess inventory, offset by the decrease in reserve at the entertainment segment. We believe the reserves are appropriate given our inventory levels as of June 30, 2024.
Previous report
***Research and development expense.***We continue to focus on bringing new products to market, including updates and improvements to current products. Our research and development expenses totaled $1,033,242 and $1,475,215 for the six months ended June 30, 2024 and 2023, respectively, a decrease of $441,973 (30%). Most of our engineers are dedicated to research and development activities for new products, primarily the new generation of body-worn cameras, EVO-HD and EVO Fleet that can be located in multiple places in a vehicle. We expect our research and development activities will continue to trend higher in future quarters as we continue to expand our product offerings based on our new body-worn camera and EVO-HD product platform and as we outsource more development projects. We consider our research and development capabilities and new product focus to be a competitive advantage and intend to continue to invest in this area on a prudent basis and consistent with our financial resources.
Previous report
Other income
Previous report
As a result of the above results of operations, we reported a net loss of $8,953,819 and $14,300,128 for the six months ended June 30, 2024 and 2023, respectively, an improvement of $5,346,309 (37%).
Previous report
Our most recent annual impairment test of goodwill was a qualitative analysis conducted as of December 31, 2023 that indicated 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. Note 1 — Nature of Business and Summary of Significant Accounting Policies and Note 10 — Goodwill and Other Intangible Assets in the Notes to Consolidated Financial Statements provide additional information regarding the Company’s goodwill and other intangible assets.
Previous report
The following table summarizes information about shares issuable under warrants outstanding during the six months ended June 30, 2024:
Reworded paragraphs (60)
Previous wording
We experienced operating losses for the first half of 2024 and all quarters during 2023. The following is a summary of our recent operating results on a quarterly basis:
Current wording
We experienced operating losses for the nine months of 2024 and all quarters during 2023. The following is a summary of our recent operating results on a quarterly basis:
Previous wording
Our business is subject to substantial fluctuations on a quarterly basis as reflected in the significant variations in revenues and operating results in the above table. These variations result from various factors, including but not limited to: (1) the timing of large individual orders; (2) the traction gained by products, such as the recently released FirstVu Pro, FirstVu II, FLT-250, EVO HD, the ThermoVu™ and the Shield™ lines; (3) production, quality and other supply chain issues affecting our cost of goods sold; (4) unusual increases in operating expenses, such as the timing of trade shows and stock-based and bonus compensation; (5) the timing of patent infringement litigation settlements (6) ongoing patent and other litigation and related expenses respecting outstanding lawsuits; and (7) the completion of corporate acquisitions including the recent purchases in the revenue cycle management and entertainment operating segments. We reported a net loss of $8,953,819 on revenues of $11,145,586 for the six months ended June 30, 2024.
Current wording
Our business is subject to substantial fluctuations on a quarterly basis as reflected in the significant variations in revenues and operating results in the above table. These variations result from various factors, including but not limited to: (1) the timing of large individual orders; (2) the traction gained by products, such as the recently released FirstVu Pro, FirstVu II, FLT-250, EVO HD, the ThermoVu™ and the Shield™ lines; (3) production, quality and other supply chain issues affecting our cost of goods sold; (4) unusual increases in operating expenses, such as the timing of trade shows and stock-based and bonus compensation; (5) the timing of patent infringement litigation settlements (6) ongoing patent and other litigation and related expenses respecting outstanding lawsuits; and (7) the completion of corporate acquisitions including the recent purchases in the revenue cycle management and entertainment operating segments. We reported a net loss of $5,470,712 on revenues of $4,051,711 for the third quarter of 2024.
Previous wording
We are a party to operating leases and license agreements that represent commitments for future payments (described in Note 9, “Operating Leases,” to our condensed consolidated financial statements) and we have issued purchase orders in the ordinary course of business that represent commitments to future payments for goods and services.
Current wording
We are a party to operating leases and license agreements that represent commitments for future payments and we have issued purchase orders in the ordinary course of business that represent commitments to future payments for goods and services.
Previous wording
Total revenues for the three months ended June 30, 2024 and 2023 were $5,616,235 and $8,279,632, respectively, a decrease of $2,663,397 (32%), due to the reasons noted above.
Current wording
Total revenues for the three months ended September 30, 2024 and 2023 were $4,051,711 and $6,337,699, respectively, a decrease of $2,285,988 (36%), due to the reasons noted above.
Previous wording
Overall cost of product revenue sold for the three months ended June 30, 2024, and 2023 was $3,419,254 and $2,219,515, respectively, an increase of $1,199,739 (54%). Overall cost of goods sold for products as a percentage of product revenues for the three months ended June 30, 2024, and 2023 were 155% and 72%, respectively. Cost of products sold by operating segment is as follows:
Current wording
Overall cost of product revenue sold for the three months ended September 30, 2024, and 2023 was $547,562 and $2,587,750, respectively, a decrease of $2,040,188 (79%). Overall cost of goods sold for products as a percentage of product revenues for the three months ended September 30, 2024, and 2023 were 68% and 124%, respectively. Cost of products sold by operating segment is as follows:
Previous wording
The increase in cost of goods sold for our video solutions segment products was primarily driven by inventory adjustments and returns as compared to the same period in the prior year. Cost of product sold as a percentage of product revenues for the video solutions segment increased to 154% for the three months ended June 30, 2024 as compared to 70% for the three months ended June 30, 2023.
Current wording
The decrease in cost of goods sold for our video solutions segment products was primarily driven by the sale of repair inventory and components as compared to the same period in the prior year. We have been unable to ship backlog due to low inventory levels of finished goods. Cost of product sold as a percentage of product revenues for the video solutions segment decreased to 51% for the three months ended September 30, 2024 as compared to 98% for the three months ended September 30, 2023.
Previous wording
The increase in entertainment operating segment cost of product sold was driven by the costs of the Country Stampede music festival for the six months ended June 30, 2024 compared to June 30, 2023, resulting in cost of product revenue of $3,230,691 for the six months ended June 30, 2024, compared to $2,677,633 for the six months ended June 30, 2023. Cost of product sold as a percentage of product revenues for the entertainment segment was 133% for the three months ended June 30, 2024 as compared to 84% for the six months ended June 30, 2023.
Current wording
The decrease in entertainment operating segment cost of product sold was driven by the reduction in sponsored events and primary ticket sales as we selectively limited our events presented for the three months ended September 30, 2024 compared to September 30, 2023, resulting in cost of product revenue of $390,226 for the three months ended September 30, 2024, compared to $1,629,763 for the three months ended September 30, 2023. Cost of product sold as a percentage of product revenues for the entertainment segment was 78% for the three months ended September 30, 2024 as compared to 146% for the three months ended September 30, 2023.
Previous wording
Overall cost of service revenue sold for the three months ended June 30, 2024, and 2023 was $1,954,589 and $3,323,077, respectively, a decrease of $1,368,488 (41%). Overall cost of goods sold for services as a percentage of service revenues for the three months ended June 30, 2024, and 2023 were 57% and 64%, respectively. Cost of service revenues by operating shipment is as follows:
Current wording
Overall cost of service revenue sold for the three months ended September 30, 2024, and 2023 was $1,764,175 and $2,523,800, respectively, a decrease of $759,625 (30%). Overall cost of goods sold for services as a percentage of service revenues for the three months ended September 30, 2024, and 2023 were 54% and 59%, respectively. Cost of service revenues by operating shipment is as follows:
Previous wording
The increase in cost of service revenues for our video solutions segment is commensurate with the increase in service revenues in the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Cost of service revenues as a percentage of service revenues for the video solutions segment decreased to 35% for the three months ended June 30, 2024 as compared to 42% for the three months ended June 30, 2023.
Current wording
The decrease in cost of service revenues for our video solutions segment reflects our staffing reductions implemented during 2024 in order to right-size our operations commensurate with our service revenues in the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Cost of service revenues as a percentage of service revenues for the video solutions segment decreased to 30% for the three months ended September 30, 2024 as compared to 47% for the three months ended September 30, 2023.
Previous wording
The decrease in entertainment operating segment cost of service revenues is commensurate with the decrease in service revenues in the three months ended June 30, 2024, compared to the three months ended June 30, 2023. Cost of service revenues as a percentage of service revenues for the entertainment segment was 74% for the three months ended June 30, 2024 as compared to 77% for the three months ended June 30, 2023.
Current wording
The decrease in entertainment operating segment cost of service revenues is commensurate with the decrease in service revenues in the three months ended September 30, 2024, compared to the three months ended September 30, 2023. Cost of service revenues as a percentage of service revenues for the entertainment segment was 74% for the three months ended September 30, 2024 as compared to 63% for the three months ended September 30, 2023.
Previous wording
Overall gross profit for the six months ended June 30, 2024 and 2023 was $1,763,830 and $4,281,829, respectively, a decrease of $2,517,999 (59%). Gross profit by operating segment was as follows:
Current wording
Overall gross profit for the three months ended September 30, 2024 and 2023 was $1,739,974 and $1,226,149, respectively, an increase of $513,825 (42%). Gross profit by operating segment was as follows:
Previous wording
The overall decrease is attributable to the decrease in gross profit for the entertainment segment for the three months ended June 30, 2024 along with a decrease in the overall cost of sales as a percentage of overall revenues to 96% for the three months ended June 30, 2024 from 67% for the three months ended June 30, 2023. Our goal is to continue to improve our margins over the longer term based on the expected margins generated by our new recent revenue cycle management and entertainment operating segments together with our video solutions operating segment and its expected margins from our EVO-HD, DVM-800, VuLink, FirstVu Pro, FirstVu II, Shield TM disinfectants and our cloud evidence storage and management offering, provided that they gain traction in the marketplace. In addition, if revenues from the video solutions segment increase, we will seek to further improve our margins from this segment through expansion and increased efficiency utilizing fixed manufacturing overhead components. We plan to continue our initiative to more efficiently management of our supply chain through outsourcing production, quantity purchases and more effective purchasing practices.
Current wording
The overall increase is attributable to the improvement in gross profit generated by the video solutions and entertainment segments for the three months ended September 30, 2024 compared to 2023 along with a decrease in the overall cost of sales as a percentage of overall revenues to 57% for the three months ended September 30, 2024 from 81% for the three months ended September 30, 2023. Our goal is to continue to improve our margins over the longer term based on the expected margins generated by our new recent revenue cycle management and entertainment operating segments together with our video solutions operating segment and its expected margins from our EVO-HD, DVM-800, VuLink, FirstVu Pro, FirstVu II, and our cloud evidence storage and management offering, provided that they gain traction in the marketplace. In addition, if revenues from the video solutions segment increase, we will seek to further improve our margins from this segment through expansion and increased efficiency utilizing fixed manufacturing overhead components. We plan to continue our initiative to more efficiently management of our supply chain through outsourcing production, quantity purchases and more effective purchasing practices.
Previous wording
Selling, general and administrative expenses were $9,317,023 and $15,395,340 for the six months ended June 30, 2024 and 2023, respectively, a decrease of $6,078,317 (39%). The decrease was primarily attributable to the reduction in new sponsorships being entered into by the Company. Our selling, general and administrative expenses as a percentage of sales decreased to 84% for the six months ended June 30, 2024 compared to 96% in the same period in 2023. The significant components of selling, general and administrative expenses are as follows:
Current wording
Selling, general and administrative expenses were $9,122,273 and $6,374,192 for the three months ended September 30, 2024 and 2023, respectively, an increase of $2,748,081 (43%). The increase was primarily attributable to the goodwill and intangible asset impairment charge recorded during the 2024 period offset by a reduction in new sponsorships being entered into by the Company. Our selling, general and administrative expenses as a percentage of sales increased to 225% for the three months ended September 30, 2024 compared to 101% in the same period in 2023. The significant components of selling, general and administrative expenses are as follows:
Previous wording
***Selling, advertising and promotional expenses.***Selling, advertising and promotional expense totaled $1,487,762 and $3,952,115 for the six months ended June 30, 2024 and 2023, respectively, a decrease of $2,464,353 (62%). The decrease is primarily attributable to the reduction in new sponsorships being entered into by the Company. Additionally, TicketSmarter remains active in sponsorship and advertising, as it continues to build its brand and gain recognition.
Current wording
***Selling, advertising and promotional expenses.***Selling, advertising and promotional expense totalled $414,727 and $1,932,982 for the three months ended September 30, 2024 and 2023, respectively, a decrease of $1,518,255 (79%). The decrease in selling, advertising and promotional expenses reflects the large cut-back in selling staff and promotional and advertising activities in order to right-size our expenses in this area with our revenues. In addition, the decrease is attributable to the reduction in new sponsorships being entered into by the Company and its subsidiary TicketSmarter.
Previous wording
General and administrative expense. General and administrative expenses totaled $2,881,931 and $5,032,843 for the three months ended June 30, 2024 and 2023, respectively. The decrease in general and administrative expenses in the three months ended June 30, 2024 compared to the same period in 2023 is primarily attributable to a decrease in administrative salaries and reductions in headcount. General and administrative expenses also decreased due to a decline in travel expenses and legal and professional expenses for the three months ended June 30, 2024 compared to the same period in 2023.
Current wording
General and administrative expense. General and administrative expenses totalled $3,666,728 and $3,877,064 for the three months ended September 30, 2024 and 2023, respectively. The decrease in general and administrative expenses in the three months ended September 30, 2024 compared to the same period in 2023 is primarily attributable to a decrease in administrative salaries and reductions in headcount in order to right-size our expenses in this area with our revenues. The decrease in general and administrative expenses was offset by a substantial increase legal and professional expenses for the three months ended September 30, 2024 compared to the same period in 2023 due to the failed merger with CloverLeaf and various capital raises we have undertaken.
Previous wording
For the reasons stated above, our operating loss was $3,914,221 and $4,940,704 for the three months ended June 30, 2024 and 2023, respectively, an improvement of $1,026,483 (21%). Operating loss as a percentage of revenues increased to 70% in the three months ended June 30, 2024 from 60% in the same period in 2023.
Current wording
For the reasons stated above, our operating loss was $7,382,299 and $5,148,043 for the three months ended September 30, 2024 and 2023, respectively, an increase of $2,234,256 (43%). Operating loss as a percentage of revenues improved to 182% in the three months ended September 30, 2024 from 81% in the same period in 2023.
Previous wording
We incurred interest expenses of $1,085,063 and $1,515,509 during the three months ended June 30, 2024 and 2023, respectively. The decrease is attributable to the convertible note issued in the second quarter of 2023, along with a reduction in the contingent earn-out notes associated with the four Nobility Healthcare acquisitions partially offset by merchant advances issued in 2024.
Current wording
We incurred interest expenses of $771,846 and $959,898 during the three months ended September 30, 2024 and 2023, respectively. The decrease is attributable to the pay-off of the building loan from proceeds of sale of the building and by a reduction and pay-off of the contingent earn-out notes associated with the four Nobility Healthcare acquisitions in 2024.
Previous wording
Other income (loss) increased to $30,445 for the three months ended June 30, 2024, from $25,394 during the three months ended June 30, 2023, which reflects income related to a warehouse lease within the corporate headquarters.
Current wording
Other income (loss) decreased to $8,920 for the three months ended September 30, 2024, from $25,394 during the three months ended September 30, 2023, which reflects a reduction in rental income related to a warehouse lease within the corporate headquarters that was terminated when the building was sold.
Previous wording
During the second quarter of 2023, the Company issued detachable warrants to purchase a total of 1,125,000 shares of Common Stock in association with the two secured convertible notes previously described. The Company issued an additional 1,768,227 warrants in June 2024. The underlying warrant agreement terms provide for net cash settlement outside the control of the Company in the event of tender offers under certain circumstances. As such, the Company is required to treat these warrants as derivative liabilities which are valued at their estimated fair value at their issuance date and at each reporting date with any subsequent changes reported in the condensed consolidated statement of operations as the change in fair value of warrant derivative liabilities. The change in fair value of the warrant derivative liabilities from December 31, 2023, to June 30, 2024, totaled $351,710 which was recognized as expense in the second quarter of 2024.
Current wording
During the second quarter of 2023, the Company issued detachable warrants to purchase a total of 1,125,000 shares of Common Stock in association with the two secured convertible notes previously described. The Company issued an additional 1,195,219 warrants in June 2024. The underlying warrant agreement terms provide for net cash settlement outside the control of the Company in the event of tender offers under certain circumstances. As such, the Company is required to treat these warrants as derivative liabilities which are valued at their estimated fair value at their issuance date and at each reporting date with any subsequent changes reported in the condensed consolidated statement of operations as the change in fair value of warrant derivative liabilities. The change in fair value of the warrant derivative liabilities from July 1, 2024, to September 30, 2024, totalled $2,530,675 which was recognized as income in the third quarter of 2024.
Previous wording
As a result of the above results of operations, we reported a loss before income tax benefit of $5,010,551, and $8,320,549 for the three months ended June 30, 2024 and 2023, respectively, a decrease of $3,309,998 (40%).
Current wording
As a result of the above results of operations, we reported a loss before income tax benefit of $5,470,712, and $3,679,043 for the three months ended September 30, 2024 and 2023, respectively, an increase of$1,791,669 (49%).
Previous wording
The Company owns a 51% equity interest in its consolidated subsidiary, Nobility Healthcare. As a result, the noncontrolling shareholders or minority interest is allocated 49% of the income of Nobility Healthcare which is reflected in the statement of income as “net income attributable to noncontrolling interests of consolidated subsidiary”. We reported net income attributable to noncontrolling interests of consolidated subsidiary of $73,310 and $72,755 for the three months ended June 30, 2024 and 2023, respectively.
Current wording
The Company owns a 51% equity interest in its consolidated, Nobility Healthcare. As a result, the noncontrolling shareholders or minority interest is allocated 49% of the income of Nobility Healthcare which is reflected in the statement of income as “net income attributable to noncontrolling interests of consolidated subsidiary”. We reported net loss (income) attributable to noncontrolling interests of consolidated subsidiary of $2,000,206 and $(29,630) for the three months ended September 30, 2024 and 2023, respectively.
Previous wording
As a result of the above, we reported a net loss attributable to common stockholders of $5,083,861 and $8,393,304 for the three months June 30, 2024 and 2023, respectively, an improvement of $3,309,443 (39%).
Current wording
As a result of the above, we reported a net loss attributable to common stockholders of $3,470,506 and $3,708,673 for the three months September 30, 2024 and 2023, respectively, an improvement of $238,167 (6%).
Previous wording
The basic and diluted loss per share was $1.74 and $3.01 for the three months ended June 30, 2024 and 2023, respectively. Basic loss per share is based upon the weighted average number of common shares outstanding during the period. For the three months ended June 30, 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 loss per share.
Current wording
The basic and diluted loss per share was $0.91 and $1.32 for the three months ended September 30, 2024 and 2023, respectively. Basic loss per share is based upon the weighted average number of common shares outstanding during the period. For the three months ended September 30, 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 loss per share.
Previous wording
Summarized immediately below and discussed in more detail in the subsequent subsections is an analysis of our operating results for the six months ended June 30, 2024 and 2023, represented as a percentage of total revenues for each such quarter:
Current wording
Summarized immediately below and discussed in more detail in the subsequent subsections is an analysis of our operating results for the nine months ended September 30, 2024 and 2023, represented as a percentage of total revenues for each such quarter:
Previous wording
Total revenues for the six months ended June 30, 2024 and 2023 were $11,145,586 and $15,976,820, respectively, a decrease of $4,831,234 (30%), due to the reasons noted above.
Current wording
Total revenues for the nine months ended September 30, 2024 and 2023 were $15,197,297 and $22,314,519, respectively, a decrease of $7,117,222 (32%), due to the reasons noted above.
Previous wording
Overall cost of product revenue sold for the six months ended June 30, 2024, and 2023 was $4,986,647 and $4,520,616, respectively, an increase of $466,031 (10%). Overall cost of goods sold for products as a percentage of product revenues for the six months ended June 30, 2024, and 2023 were 132% and 82%, respectively. Cost of products sold by operating segment is as follows:
Current wording
Overall cost of product revenue sold for the nine months ended September 30, 2024, and 2023 was $5,534,209 and $7,108,366, respectively, a decrease of $1,574,157 (22%). Overall cost of goods sold for products as a percentage of product revenues for the nine months ended September 30, 2024, and 2023 were 121% and 93%, respectively. Cost of products sold by operating segment is as follows:
Previous wording
The decrease in cost of goods sold for our video solutions segment products is directly correlated with the decrease in product sales for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. In addition, the video solutions segment recorded valuation allowances for its older product lines and a portion of its Shield products during the first six months of 2023, directly increasing cost of goods sold for the period. Cost of product sold as a percentage of product revenues for the video solutions segment improved to 131% for the six months ended June 30, 2024 as compared to 79% for the six months ended June 30, 2023.
Current wording
The decrease in cost of goods sold for our video solutions segment products is directly correlated with the decrease in product sales for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. In addition, the video solutions segment recorded valuation allowances for its older product lines and a portion of its Shield products during the first nine months of 2023, directly increasing cost of goods sold for the period. Cost of product sold as a percentage of product revenues for the video solutions segment remained steady at 116% for the nine months ended September 30, 2024 as compared to 110% for the nine months ended September 30, 2023.
Previous wording
The increase in entertainment operating segment cost of product sold was driven by the costs of the Country Stampede music festival for the three months ended June 30, 2024 compared to June 30, 2023, resulting in cost of product revenue of $2,460,792 for the three months ended June 30, 2024, compared to $1,414,126 for the three months ended June 30, 2023. Cost of product sold as a percentage of product revenues for the entertainment segment was 155% for the three months ended June 30, 2024 as compared to 73% for the three months ended June 30, 2023.
Current wording
The increase in entertainment operating segment cost of product sold was driven by the costs of the Country Stampede music festival for the nine months ended September 30, 2024 compared to September 30, 2023, resulting in cost of product revenue of $3,620,853 for the nine months ended September 30, 2024, compared to $3,449,876 for the nine months ended September 30, 2023. Cost of product sold as a percentage of product revenues for the entertainment segment was 124% for the three months ended September 30, 2024 as compared to 80% for the nine months ended September 30, 2023.
Previous wording
Overall cost of service revenue sold for the six months ended June 30, 2024, and 2023 was $4,395,109 and $7,174,375, respectively, a decrease of $2,779,266 (39%). Overall cost of goods sold for services as a percentage of service revenues for the six months ended June 30, 2024, and 2023 were 60% and 69%, respectively. Cost of service revenues by operating segment is as follows:
Current wording
Overall cost of service revenue sold for the nine months ended September 30, 2024, and 2023 was $6,159,284 and $9,698,175, respectively, a decrease of $3,538,891 (36%). Overall cost of goods sold for services as a percentage of service revenues for the nine months ended September 30, 2024, and 2023 were 58% and 66%, respectively. Cost of service revenues by operating segment is as follows:
Previous wording
The increase in cost of service revenues for our video solutions segment is commensurate with the increase in service revenues in the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Cost of service revenues as a percentage of service revenues for the video solutions segment decreased to 35% for the six months ended June 30, 2024 as compared to 44% for the six months ended June 30, 2023.
Current wording
The decrease in cost of service revenues for our video solutions segment is commensurate with the increase in service revenues in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Cost of service revenues as a percentage of service revenues for the video solutions segment decreased to 34% for the nine months ended September 30, 2024 as compared to 45% for the nine months ended September 30, 2023. The improved cost of service revenues as a percentage of service revenues reflects the results of cost cutting efforts and head-count reductions implemented in 2024 to improve our operating results.
Previous wording
The revenue cycle management operating segment cost of service revenue was consistent with the prior period. Cost of service revenues as a percentage of service revenues for the revenue cycle management operating segment was 65% for the six months ended June 30, 2024 as compared to 55% for the six months ended June 30, 2023.
Current wording
The revenue cycle management operating segment cost of service revenue was consistent with the prior period. Cost of service revenues as a percentage of service revenues for the revenue cycle management operating segment was 62% for the nine months ended September 30, 2024 as compared to 57% for the nine months ended September 30, 2023.
Previous wording
The decrease in entertainment operating segment cost of service revenues is commensurate with the decrease in service revenues in the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Cost of service revenues as a percentage of service revenues for the entertainment operating segment was 73% for the six months ended June 30, 2024 as compared to 84% for the six months ended June 30, 2023.
Current wording
The decrease in entertainment operating segment cost of service revenues is commensurate with the decrease in service revenues in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Cost of service revenues as a percentage of service revenues for the entertainment operating segment was 73% for the nine months ended September 30, 2024 as compared to 79% for the nine months ended September 30, 2023.
Previous wording
Overall gross profit for the three months ended June 30, 2024 and 2023 was $242,392 and $2,737,040, respectively, a decrease of $2,494,648 (91%). Gross profit by operating segment was as follows:
Current wording
Overall gross profit for the nine months ended September 30, 2024 and 2023 was $3,503,804 and $5,507,978, respectively, a decrease of $2,004,174 (36%). Gross profit by operating segment was as follows:
Previous wording
The overall decrease is attributable to the overall decrease in revenues for the six months ended June 30, 2024 and an increase in the overall cost of sales as a percentage of overall revenues to 84% for the six months ended June 30, 2024 from 73% for the six months ended June 30, 2023. Our goal is to improve our margins over the longer term based on the expected margins generated by our new recent revenue cycle management and entertainment operating segments together with our video solutions operating segment and its expected margins from our EVO-HD, DVM-800, VuLink, FirstVu Pro, FirstVu II, ShieldTM disinfectants and our cloud evidence storage and management offering, provided that they gain traction in the marketplace. In addition, if revenues from the video solutions segment increase, we will seek to further improve our margins from this segment through expansion and increased efficiency utilizing fixed manufacturing overhead components. We plan to continue our initiative to more efficient management of our supply chain through outsourcing production, quantity purchases and more effective purchasing practices.
Current wording
The overall decrease is attributable to the overall decrease in revenues for the nine months ended September 30, 2024 and an increase in the overall cost of sales as a percentage of overall revenues to 77% for the nine months ended September 30, 2024 from 75% for the nine months ended September 30, 2023. Our goal is to improve our margins over the longer term based on the expected margins generated by our new recent revenue cycle management and entertainment operating segments together with our video solutions operating segment and its expected margins from our EVO-HD, DVM-800, VuLink, FirstVu Pro, FirstVu II, ShieldTM disinfectants and our cloud evidence storage and management offering, provided that they gain traction in the marketplace. In addition, if revenues from the video solutions segment increase, we will seek to further improve our margins from this segment through expansion and increased efficiency utilizing fixed manufacturing overhead components. We plan to continue our initiative to more efficient management of our supply chain through outsourcing production, quantity purchases and more effective purchasing practices.
Previous wording
Selling, general and administrative expenses were $4,156,613 and $7,677,744 for the three months ended June 30, 2024 and 2023, respectively, a decrease of $3,521,131 (46%). The decrease was primarily attributable to the reduction in new sponsorships being entered into by the Company. Our selling, general and administrative expenses as a percentage of sales decreased to 74% for the three months ended June 30, 2024 compared to 93% in the same period in 2023. The significant components of selling, general and administrative expenses are as follows:
Current wording
Selling, general and administrative expenses were $18,439,296 and $21,769,532 for the nine months ended September 30, 2024 and 2023, respectively, a decrease of $3,330,236 (15%). The decrease was primarily attributable to the reduction in new sponsorships being entered into by the Company offset by the goodwill and intangible asset impairment charge. Our selling, general and administrative expenses as a percentage of sales increased to 121% for the nine months ended September 30, 2024 compared to 98% in the same period in 2023. The significant components of selling, general and administrative expenses are as follows:
Previous wording
General and administrative expense. General and administrative expenses totaled $6,796,019 and $9,968,010 for the six months ended June 30, 2024 and 2023, respectively, a decrease of $3,171,991 (32%). The decrease in general and administrative expenses in the six months ended June 30, 2024 compared to the same period in 2023 is primarily attributable to a decrease in administrative salaries and headcount. General and administrative expenses also decreased due to a decline in rent expenses, and legal and professional expenses for the six months ended June 30, 2024 compared to the same period in 2023.
Current wording
General and administrative expense. General and administrative expenses totalled $10,462,747 and $13,845,074 for the nine months ended September 30, 2024 and 2023, respectively. The decrease in general and administrative expenses in the three months ended September 30, 2024 compared to the same period in 2023 is primarily attributable to a decrease in administrative salaries and reductions in headcount in order to right-size our expenses in this area with our revenues. The decrease in general and administrative expenses was offset by a substantial increase legal and professional expenses for the nine months ended September 30, 2024 compared to the same period in 2023 due to the failed merger with CloverLeaf and various capital raises we have undertaken.
Previous wording
For the reasons stated above, our operating loss was $7,553,193 and $11,113,511 for the six months ended June 30, 2024 and 2023, respectively, an improvement of $3,560,318 (32%). Operating loss as a percentage of revenues changed to 68% in the six months ended June 30, 2024 from 70% in the same period in 2023.
Current wording
For the reasons stated above, our operating loss was $14,935,492 and $16,261,554 for the nine months ended September 30, 2024 and 2023, respectively, an improvement of $1,326,062 (8%). Operating loss as a percentage of revenues changed to 98% in the nine months ended September 30, 2024 from 73% in the same period in 2023.
Previous wording
Interest income decreased to $49,289 for the six months ended June 30, 2024, from $71,085 in the same period of 2023, which reflects our change in cash and cash equivalent levels in the second quarter of 2024 compared to the second quarter of 2023. The Company held significant cash and cash equivalents throughout the second quarter of 2023, allowing a full six months of interest income.
Current wording
Interest income decreased to $63,064 for the nine months ended September 30, 2024, from $84,071 in the same period of 2023, which reflects our change in cash and cash equivalent levels during the nine months ended September 30, 2024 compared to the same period in 2023. The Company held higher levels of cash and cash equivalents during the nine months ended September 30, 2023.
Previous wording
We incurred interest expense of $1,733,690 and $1,521,049 during the six months ended June 30, 2024 and 2023, respectively. The increase is attributable additional debt issued in the second half of 2023 and 2024 partially offset by the convertible note entered into in the second quarter of 2023, and the contingent earn-out notes associated with the four Nobility Healthcare acquisitions.
Current wording
We incurred interest expense of $2,505,536 and $2,480,947 during the nine months ended September 30, 2024 and 2023, respectively. The increase is attributable additional debt issued in late 2023 and during the nine months ended September 30, 2024 partially offset by the conversion of the convertible notes entered into in the second quarter of 2023, the payoff of the building debt upon sale of the building and the pay-off of the contingent earn-out notes associated with the four Nobility Healthcare acquisitions.
Previous wording
Other income increased to $58,046 for the six months ended June 30, 2024, from $50,786 during the six months ended June 30, 2023, which reflects income related to a warehouse lease within the corporate headquarters.
Current wording
Other income (expense) decreased to $66,966 for the nine months ended September 30, 2024, from $76,180 during the nine months ended September 30, 2023, which reflects income related to a warehouse lease within the corporate headquarters which ceased in 2024 upon the sale of the building.
Showing the first 40 of 60 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The Company has utilized the following assumptions in its Black-Scholes option valuation model to calculate the estimated fair value of the warrant derivative liability as of their date of issuance and as of September 30, 2024:
Rearranged previous paragraphs (8)
Previous report — wording carried elsewhere
Cost of service revenues as a percentage of service revenues for the revenue cycle management operating segment was 62% for the three months ended June 30, 2024 as compared to 53% for the three months ended June 30, 2023.
Previous report — wording carried elsewhere
Interest income decreased to $29,933 for the three months ended June 30, 2023, from $55,730 in the same period of 2024, which reflects our change in cash and cash equivalent levels in the second quarter of 2024 compared to the second quarter of 2023.
Previous report — wording carried elsewhere
During the second quarter of 2024, the Company refinanced its merchant advance loan and determined the refinancing of the debt should be treated as a debt extinguishment. As a result, the Company recorded a loss of $68,827 on the extinguishment during the six months ended June 30, 2024.
Previous report — wording carried elsewhere
The Company recorded a loss on sale of fixed assets of $41,661 and $-0- for the six months ended June 30, 2024 and 2023.
Previous report — wording carried elsewhere
Loss on accrual for legal settlement
Previous report — wording carried elsewhere
The Company recognized a loss on accrual for legal settlement of $-0- and $1,792,308 during the six months ended June 30, 2024 and 2023, respectively. This is in connection with the ongoing lawsuit with Culp McCauley, Inc.
Previous report — wording carried elsewhere
Loss on conversion of convertible debt
Previous report — wording carried elsewhere
The Company recognized a loss on conversion of convertible debt of $-0- and $93,386 during the six months ended June 30, 2024 and 2023, respectively. This is in connection with the convertible note issued during the six months ended June 30, 2023 and the conversion from debt to equity during the period.