DIGITAL ALLY, INC.
For the period ended Sep 30, 2025. Filed Nov 12, 2025.
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, 2025 · Filed Nov 12, 2025
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 2025-06-30; filed 2025-08-18.
0001641172-25-024667
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-12.
0001493152-25-021680
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 223 previous paragraphs and 222 current paragraphs.
145 unchanged; 50 reworded; 27 added; 22 removed; 6 previous and 0 current paragraphs rearranged.
Tables are not compared: 41 previous and 41 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 (27)
Current report
On October 17, 2025, the Company received notice from Nasdaq that it had regained full compliance with the Minimum Bid Price Requirement and Stockholders’ Equity Requirement. The Nasdaq has now placed the Company under a one-year Discretionary Panel Monitor. Under the Discretionary Panel Monitor, the Company will not be permitted to request additional time to regain compliance with any deficiencies that occur within the one-year period regarding noncompliance with the Periodic Filing or Bid Price Rules. Such one-year period expires on July 31, 2026 with regard to the Periodic Filing Rules and September 2, 2026 regarding the Bid Price Rules.
Current report
Product revenues for the three months ended September 30, 2025 and 2024 were $664,422 and $803,945, respectively, a decrease of $139,523 (17.4%), due to the following factors:
Current report
Service and other revenues for the three months ended September 30, 2025 and 2024 were $3,872,735 and $3,247,766, respectively, an increase of $624,969 (19.2%), due to the following factors:
Current report
The increase in cost of goods sold for our video solutions segment was primarily attributable to a higher component and expedite freight costs, increased repair and refurbishment costs for returned units, and increased scrap – receiving associated with incoming inspection failures 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 207.6% for the three months ended September 30, 2025 as compared to 51% for the three months ended September 30, 2024.
Current report
Cost of products sold within the entertainment segment increased slightly period over period, principally due to higher variable costs (ticket acquisition, event settlement, and payment processing). The increase was partially offset by a continued focus on higher-margin events, which limited cost growth as a percentage of revenue. Cost of product sold as a percentage of product revenues for the entertainment segment increased to 98.6% for the three months ended September 30, 2025 as compared to 78.40% for the three months ended September 30, 2024.
Current report
Cost of service revenues as a percentage of service revenues for the revenue cycle management operating segment remained consistent at 62.5% for the three months ended September 30, 2025 as compared to 58.4% for the three months ended September 30, 2024.
Current report
The decrease in gross profits is primarily due to lower revenue and a higher cost of sales as a percentage of revenue, particularly within the entertainment segment’s service revenues. Cost of sales as a percentage of total revenues increased to 69.8% for the three months ended September 30, 2025, from 57% in the prior-year period, resulting in margin compression. We are pursuing a multi-pronged margin-improvement plan for the Entertainment business—focused on right-sizing, pricing discipline, and mix optimization.
Current report
***Research and development expense.***Our research and development expenses totaled $137,755 and $210,818 for the three months ended September 30, 2025 and 2024, respectively which represents a decrease of $73,063 (34.7%). The decrease in research and development expense reflects a narrower project portfolio and a reallocation of resources toward sustaining engineering and targeted enhancements, including reductions in engineering headcount and third-party development spend.
Current report
Other income (expense) increased to $217,136 for the three months ended September 30, 2025 from $8,920 for the comparable 2024 period, primarily due to weather insurance proceeds that we received related to the 2025 Country Stampede music festival.
Current report
On March 1, 2024, the Company obtained a short-term merchant advance, which totaled $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 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, we reported a net loss before income tax benefit of $(963,342) and $(5,470,712) for the three months ended September 30, 2025 and 2024, respectively, an improvement of $4,507,370 (82.4%).
Current report
As a result of the above, we reported net income (loss) of $(963,342) and $(5,470,712) for the three months ended September 30, 2025 and 2024, respectively, an improvement of $4,507,370 (82.4%).
Current report
As a result of the above, we reported a net income (loss) of $(1,021,867) and $(3,470,506) for the three months ended September 30, 2025 and 2024, respectively, an improvement of $2,448,639 (70.6%).
Current report
The basic and diluted loss per share was $0.59 and $1,817.02 for the three months ended September 30, 2025 and 2024, 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, 2025 and 2024, 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 report
Comparison of the Nine months Ended September 30, 2025 and 2024
Current report
Product revenues for the nine months ended September 30, 2025 and 2024 were $3,602,202 and $4,577,392, respectively, a decrease of $975,190 (21.3%), due to the following factors:
Current report
Service and other revenues for the nine months ended September 30, 2025 and 2024 were $11,042,258 and $10,619,905, respectively, an increase of $422,353 (3.8%), due to the following factors:
Current report
Cost of service revenues for the video solutions segment increased slightly, reflecting higher service revenues for the nine months ended September 30, 2025 compared to the same period in 2024. Cost of service revenues as a percentage of service revenues for the video solutions segment increased to 33% for the nine months ended September 30, 2025 as compared to 34% for the nine months ended September 30, 2024.
Current report
***Research and development expense.***Our research and development expenses totaled $405,983 and $1,244,060 for the nine months ended September 30, 2025 and 2024, respectively which represents a decrease of $838,077 (67.4%). The decrease in research and development expense reflects a narrower project portfolio and a reallocation of resources toward sustaining engineering and targeted enhancements, including reductions in engineering headcount and third-party development spend.
Current report
Other income (expense) increased to $252,603 for the nine months ended September 30, 2025, from $66,966 during the nine months ended September 30, 2024, which reflects weather insurance proceeds that we received in 2025 related to the 2025 Country Stampede.
Current report
On March 1, 2024, the Company obtained a short-term merchant advance for its entertainment segment, which totaled $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 nine months ended September 30, 2024.
Current report
Gain on Sale of Property, Plant and Equipment
Current report
As a result of the above, we reported net income (loss) of $(1,185,464) and $(14,424,531) for the nine months ended September 30, 2025 and 2024, respectively, an improvement of $13,239,067 (91.8%).
Current report
As a result of the above, we reported a net loss of $(1,303,597) and $(12,485,388) for the nine months ended September 30, 2025 and 2024, respectively, an improvement of $11,181,791 (89.6%).
Current report
Warranty Reserves. Historically, we recorded an assurance-type warranty liability related to hardware sold. As we have transitioned to a cloud-based, subscription model in which devices are typically provided as part of the service rather than sold, the volume of products subject to an assurance-type warranty has become insignificant. For subscription deployments, our obligations consist of maintenance/support and service-level commitments, which are accounted for under ASC 606 as services (and any service-level credits as variable consideration), not as assurance-type warranties. Based on claims history and expected costs, anticipated assurance-type warranty costs are immaterial.
Removed paragraphs (22)
Previous report
Product revenues for the three months ended June 30, 2025 and 2024 were $2,178,960 and $2,207,601, respectively, a decrease of $28,641 (1.3%), due to the following factors:
Previous report
Service and other revenues for the three months ended June 30, 2025 and 2024 were $3,453,079 and $3,408,634, respectively, an increase of $44,445 (1.3%), due to the following factors:
Previous report
***Research and development expense.***Our research and development expenses totaled $183,811 and $545,776 for the three months ended June 30, 2025 and 2024, respectively which represents a decrease of $361,965 (66.3%). We have focused on controlling our expenditures for 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 expenses 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.
Previous report
Other income (expense) decreased to $18,767 for the three months ended June 30, 2025, from $30,445 during the three months ended June 30, 2024, which reflects income related to a warehouse sublease within the corporate headquarters during early 2024 which ceased upon the sale of the building which occurred in 2024.
Previous report
Loss on Extinguishment of Debt -related party
Previous report
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 to TicketSmarter to support TicketSmarter’s operations. The Related Party Note bears interest of 13.25% per annum with repayment beginning January 2, 2024. On October 2, 2023 an additional $375,000 was advanced to Ticketsmarter which increased the loan balance to $2,700,000. The use of proceeds of the TicketSmarter Related Party Note was to resolve numerous outstanding payables at a discounted rate, the discount received is recognized as a gain on extinguishment of liabilities on the condensed consolidated statement of operations. Additionally, these negotiations relieved TicketSmarter of numerous future obligations following fiscal year 2023.
Previous report
On August 19, 2024, the parties agreed to amend the note whereby the repayment dates were extended to begin on January 2, 2025 and continue at $54,000 for 50 consecutive weeks plus interest. The parties did not change any other provisions or terms of the note. The amendment was determined to be a modification of the note rather than an extinguishment and reissuance of a new note.
Previous report
On March 20, 2025, the parties agreed to a second modification of the TicketSmarter Related Party Note. The modification eliminated all accrued interest totaling $582,203 as of the date of the second modification, reduced the interest rate from 13.25% per annum to 8% per annum, and extended and reduced the repayment amount from $54,000 per week to $11,000 per week beginning April 1, 2025. The modification was deemed to be an extinguishment of debt resulting in a gain on extinguishment of note payable – related party of $1,249,372 during the three months ended March 31, 2025. At the time of the modification, management considered the officer’s lack Company-wide policy making authority and de-minimis beneficial ownership in the Company to determine that in its estimation the officer did not act in his capacity as an equity holder in the Company when negotiating the March 20, 2025 debt modification.
Previous report
On June 4, 2025, the parties agreed to a third modification of the TicketSmarter Related Party Note. The modification reduced the outstanding principal amount from $2,678,000 to $2,000,000, eliminated all accrued interest totaling $43,515 as of the date of the third modification, the interest rate remained at 8% per annum, and extended and reduced the repayment amount from $11,000 per week to $9,600 per week beginning January 1, 2026. The modification was deemed to be an extinguishment of debt resulting in a gain on extinguishment of note payable – related party of $622,622 during the three and six months ended June 30, 2025.
Previous report
At the time of the June 4, 2025 modification, management considered the repetitive nature of the modifications as an indication that the Officer was acting more in his capacity as an equity holder. In addition, management reconsidered the accounting treatment for the March 20, 2025 modification and changed its estimate whereby, the officer was more likely than not acting in his capacity as an equity holder in the Company when negotiating the March 20, 2025 debt modification, as well. As a result, the Company determined the proper accounting treatment for the $622,622 gain on the June 4, 2025 modification as a deemed contribution of capital rather than a gain recognized in the condensed consolidated statement of operations. In addition, the Company reconsidered the accounting treatment for the $1,249,372 gain on the March 20, 2025 modification as a deemed contribution of capital rather than a gain recognized in the condensed consolidated statement of operations. Therefore the $1,249,372 gain on the March 20, 2025 modification was reversed during the quarter ended June 30, 2025 and recorded as a deemed contribution of capital rather than a gain recognized in the condensed consolidated statement of operations.
Previous report
As a result of the above, we reported a net loss before income tax benefit of $(4,489,204) and $(5,010,551) for the three months ended June 30, 2025 and 2024, respectively, an improvement of $521,347 (10.4%).
Previous report
As a result of the above, we reported net income (loss) of $(4,489,204) and $(5,010,551) for the three months ended June 30, 2025 and 2024, respectively, an improvement of $521,347 (10.4%).
Previous report
As a result of the above, we reported a net income (loss) of $(4,545,201) and $(5,083,861) for the three months ended June 30, 2025 and 2024, respectively, an improvement of $538,660 (10.6%).
Previous report
Comparison of the Six Months Ended June 30, 2025 and 2024
Previous report
Product revenues for the six months ended June 30, 2025 and 2024 were $2,937,780 and $3,773,447, respectively, a decrease of $835,667 (22.1%), due to the following factors:
Previous report
Service and other revenues for the six months ended June 30, 2025 and 2024 were $7,169,523 and $7,372,139, respectively, an increase of $202,616 (2.7%), due to the following factors:
Previous report
The slight decrease in cost of service revenues for our video solutions segment demonstrates the leverage we are enjoying as we increase our service revenues during the six months ended June 30, 2025 compared to the six months ended June 30, 2024. Cost of service revenues as a percentage of service revenues for the video solutions segment increased to 39% for the six months ended June 30, 2025 as compared to 35% for the six months ended June 30, 2024. This represents an increase in costs for securing cloud storage from our providers in 2025 compared to 2024.
Previous report
***Research and development expense.***Our research and development expenses totaled $268,228 and $1,033,242 for the six months ended June 30, 2025 and 2024, respectively which represents a decrease of $765,014 (74%). We have focused on controlling our expenditures for 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 expenses 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.
Previous report
Other income (expense) decreased to $35,467 for the six months ended June 30, 2025, from $58,046 during the six months ended June 30, 2024, which reflects income related to a warehouse sublease within the corporate headquarters during early 2024 which ceased upon the sale of the building which occurred in 2024.
Previous report
As a result of the above, we reported net income (loss) of $(222,122) and $(8,953,819) for the six months ended June 30, 2025 and 2024, respectively, an improvement of $8,731,697 (97.5%).
Previous report
As a result of the above, we reported a net loss of $(281,730) and $(9,014,882) for the six months ended June 30, 2025 and 2024, respectively, an improvement of $8,733,152 (96.9%).
Previous report
Warranty Reserves. We generally provide up to a two-year parts and labor standard warranty on our products to our customers. Provisions for estimated expenses related to product warranties are made at the time products are sold. These estimates are established using historical information on the nature, frequency, and average cost of claims. We actively study trends of claims and take action to improve product quality and minimize claims. Standard warranty exposure on the DVM-800 and DVM-250plus are the responsibility of the contract manufacturers, which reduced our overall warranty exposure as these are very popular products in our line. There is a risk that we will have higher warranty claim frequency rates and average cost of claims than our history has indicated on our legacy mirror products compared to our new products for which we have limited experience. Actual experience could differ from the amounts estimated requiring adjustments to these liabilities in future periods.
Reworded paragraphs (50)
Previous wording
Total revenues for the three months ended June 30, 2025, and 2024 were $5,632,039 and $5,616,235, respectively, a slight increase of $15,804 (0.3%), due to the reasons noted above.
Current wording
Total revenues for the three months ended September 30, 2025, and 2024 were $4,537,157 and $4,051,711, respectively, an increase of $485,446 (12.0%) due to the reasons noted above.
Previous wording
Overall cost of product revenue sold for the three months ended June 30, 2025, and 2024 was $3,901,864 and $3,419,254, respectively, an increase of $482,610 (19.9%). Overall cost of goods sold for products as a percentage of product revenues for the three months ended June 30, 2025, and 2024 were 179% and 155%, 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, 2025, and 2024 was $905,190 and $547,562, respectively, an increase of $482,610 (19.9%). Overall cost of goods sold for products as a percentage of product revenues for the three months ended September 30, 2025, and 2024 were 179% and 155%, respectively. Cost of products sold by operating segment is as follows:
Previous wording
Overall cost of service revenue sold for the three months ended June 30, 2025, and 2024 was $2,362,800 and $1,954,589, respectively, an increase of $408,211 (20.9%). Overall cost of goods sold for services as a percentage of service revenues for the three months ended June 30, 2025, and 2024 were 68% and 81%, respectively. Cost of service revenues by operating segment is as follows:
Current wording
Overall cost of service revenue sold for the three months ended September 30, 2025, and 2024 was $2,260,392 and $1,764,175, respectively, an increase of $496,217 (28.1%). Overall cost of goods sold for services as a percentage of service revenues for the three months ended September 30, 2025, and 2024 were 58% and 54%, 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 demonstrates the leverage we are enjoying as we increase our service revenues during the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Cost of service revenues as a percentage of service revenues for the video solutions segment increased to 43% for the three months ended June 30, 2025 as compared to 35% for the three months ended June 30, 2024. This represents an increase in costs for securing cloud storage from our providers in 2025 compared to 2024.
Current wording
The increase in cost of service revenues for our video solutions segment demonstrates the leverage we are enjoying as we increase our service revenues during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Cost of service revenues as a percentage of service revenues for the video solutions segment decreased to 24.5% for the three months ended September 30, 2025 as compared to 30.3% for the three months ended September 30, 2024.
Previous wording
The increase in entertainment operating segment cost of service revenues is due to management right sizing the business working towards profitability. The entertainment segment terminated several unprofitable sponsorships which required termination payments during the three months ended June 30, 2025, that is expected to lead to improvements in costs of service revenues during the remainder of 2025. The entertainment segment cost of service revenue was $1,094,131 for the three months ended June 30, 2025, compared to $652,273 for the three months ended June 30, 2024. Cost of service revenues as a percentage of service revenues for the entertainment segment increased to 98% for the three months ended June 30, 2025 as compared to 74% for the three months ended June 30, 2024.
Current wording
The increase in entertainment operating segment cost of service revenues is due to management right sizing the business working towards profitability. The entertainment segment terminated several unprofitable sponsorships which required termination payments during the three months ended September 30, 2025, that is expected to lead to improvements in costs of service revenues during the remainder of 2025. The entertainment segment cost of service revenue was $1,111,577 for the three months ended September 30, 2025, compared to $559,143 for the three months ended September 30, 2024. Cost of service revenues as a percentage of service revenues for the entertainment segment increased to 85.8% for the three months ended September 30, 2025 as compared to 74.0% for the three months ended September 30, 2024.
Previous wording
Overall gross profit for the three months ended June 30, 2025 and 2024 was $(632,625) and $242,392, respectively, a decrease of $875,017 (361%). Gross profit by operating segment was as follows:
Current wording
Overall gross profit for the three months ended September 30, 2025 and 2024 was $1,371,575 and $1,739,974, respectively, a decrease of $368,399 (21.2%). Gross profit by operating segment was as follows:
Previous wording
Selling, general and administrative expenses were $6,038,627 and $9,317,023 for the six months ended June 30, 2025 and 2024, respectively, a decrease of $3,278,396 (35%). The decrease was primarily attributable to the reduction in new advertising sponsorships being entered into by the Company and large reductions in selling, general and administrative head count as the Company right-sized its operations across all operating segments. Our selling, general and administrative expenses as a percentage of sales increased to 60% for the six months ended June 30, 2025 compared to 84% in the same period in 2024. The significant components of selling, general and administrative expenses are as follows:
Current wording
Selling, general and administrative expenses were $2,493,357 and $9,122,273 for the three months ended September 30, 2025 and 2024, respectively, a decrease of $6,628,916 (72.7%). The decrease was primarily driven by fewer new advertising sponsorships and reductions in headcount within selling, general and administrative functions as the Company right-sized operations across all segments. Additionally, the prior-year period included a goodwill and intangible asset impairment charge that did not recur, further contributing to the year-over-year decrease. Our selling, general and administrative expenses as a percentage of sales decreased to 55% for the three months ended September 30, 2025 compared to 225% in the same period in 2024. 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 $283,137 and $728,906 for the three months ended June 30, 2025 and 2024, respectively, a decrease of $445,769 (61.2%). 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 wording
***Selling, advertising and promotional expenses.***Selling, advertising and promotional expense totaled $110,006 and $414,727 for the three months ended September 30, 2025 and 2024, respectively, a decrease of $304,721 (73.5%). Selling, advertising, and promotional expenses decreased due to significant reductions in sales staffing and in promotional and advertising activities, undertaken to right-size these expenses to current revenue levels. Additionally, the decline reflects fewer new sponsorship agreements at the Company and its subsidiary, TicketSmarter.
Previous wording
General and administrative expense. General and administrative expenses totaled $2,995,500 and $2,881,931 for the three months ended June 30, 2025 and 2024, respectively which represents a slight increase of $113,569 (3.9%). The increase in general and administrative expenses in the three months ended June 30, 2025 compared to the same period in 2024 is primarily attributable to a substantial increase legal and professional expenses for the three months ended June 30, 2025 compared to the same period in 2024 due to the failed merger with CloverLeaf and various capital raises we have undertaken which was offset by a decrease in administrative salaries and reductions in headcount in order to right-size our expenses across all operating segments with our revenues.
Current wording
General and administrative expense. General and administrative expenses totaled $2,245,596 and $3,666,728 for the three months ended September 30, 2025 and 2024, respectively which represents a decrease of $1,421,132 (38.8%). The decrease in general and administrative expenses in the three months ended September 30, 2025 compared to the same period in 2024 is primarily attributable to a substantial decrease in legal and professional expenses for the three months ended September 30, 2025 compared to the same period in 2024 due to the failed merger with CloverLeaf in the 2024 period and various capital raises we have undertaken in 2024. We also implemented decreases in administrative salaries and reductions in headcount during the 2025 period in order to right-size our expenses across all operating segments with our revenues.
Previous wording
For the reasons previously stated, our operating loss was $4,095,073 and $3,914,221 for the three months ended June 30, 2025 and 2024, respectively, a slight deterioration of $180,852 (4.6%). Operating loss as a percentage of revenues improved to 72.7% in 2025 as compared to 69.7% in 2024.
Current wording
For the reasons previously stated, our operating loss was $1,121,782 and $7,382,299 for the three months ended September 30, 2025 and 2024, respectively, an improvement in our operating loss of $6,260,517 (84.8%). Operating loss as a percentage of revenues improved to 24.7% in 2025 as compared to 182% in 2024.
Previous wording
Interest income increased to $45,946 for the three months ended June 30, 2025, from $29,933 in 2024, which reflects our overall increase in our cash and cash equivalent levels in 2025 compared to 2024 due to funds generated in the February 2025 public equity offering.
Current wording
Interest income increased to $17,887 for the three months ended September 30, 2025, from $13,775 in 2024, which reflects our overall increase in our cash and cash equivalent levels in 2025 compared to 2024 due to funds generated in the February 2025 public equity offering and the net proceeds from our September 2025 senior convertible note issuance.
Previous wording
We incurred interest expenses of $77,280 and $1,085,063 during the three months ended June 30, 2025 and 2024, respectively. The large decrease is attributable to the Company paying off most of its interest-bearing debt in late 2024 and early 2025 including the senior secured promissory notes that were paid off with proceeds from the February 2025 public equity offering.
Current wording
We incurred interest expenses of $90,697 and $771,846 during the three months ended September 30, 2025 and 2024, respectively. The large decrease is attributable to the Company paying off most of its interest-bearing debt in late 2024 and early 2025 including the $3.6 million of senior secured promissory notes that were paid off with proceeds from the February 2025 public equity offering.
Previous wording
The change in fair value of the warrant derivative liabilities for the six months ended June 30, 2025 and 2024, respectively totaled a gain of $3,373,080 during the six months ended June 30, 2025 as compared to a loss of $351,710 during the six months ended June 30, 2024. The Company has issued various detachable warrants in connection with capital raises during 2024 and 2025 that were required to be treated as warrant derivative liabilities. Warrant derivative liabilities are required to be marked-to-market at each balance sheet date with the change in fair value recorded as a gain or loss in the Condensed Statement of Operations. The gain recorded in the six months ended June 30, 2025 reflects the large decline in the closing market value of our common stock at June 30, 2025 when compared to December 31, 2024 closing market values.
Current wording
The change in fair value of the warrant derivative liabilities for the three months ended September 30, 2025 and 2024, respectively totaled a gain of $839 during the three months ended September 30, 2025 as compared to a gain of $2,530,675 during the three months ended September 30, 2024. The Company has issued various detachable warrants in connection with capital raises during 2024 and 2025 that were required to be treated as warrant derivative liabilities. Warrant derivative liabilities are required to be marked-to-market at each balance sheet date with the change in fair value recorded as a gain or loss in the Condensed Statement of Operations. The gain recorded in the three months ended September 30, 2025 reflects relatively minor fair value changes resulting from reduced stock price volatility and fewer warrants outstanding during the period.
Previous wording
The Company recorded a gain on the extinguishment of liabilities for the three months ended June 30, 2025 and 2024 of $10,619, and $—, respectively. The gains reflect income related to the entertainment segment’s ability to negotiate down payables and other contract obligations during the three months ended June 30, 2025 utilizing funds generated by the closing of the February 2025 public equity offering on February 13, 2025.
Current wording
The Company recorded a gain on the extinguishment of liabilities for the three months ended September 30, 2025 and 2024 of $13,275, and $9,385, respectively. The gains reflect income related to the entertainment segment’s ability to negotiate down payables and other contract obligations during the three months ended September 30, 2025 utilizing funds generated by the closing of the February 2025 public equity offering on February 13, 2025.
Previous wording
We had approximately $156,019 of federal net operating loss carryforwards and $1,742,000 of research and development tax credit carryforwards as of June 30, 2025 and December 31, 2024 available to offset future net taxable income.
Current wording
We had approximately $159,965,000 of federal net operating loss carryforwards and $1,796,111 of research and development tax credit carryforwards as of September 30, 2025 and December 31, 2024 available to offset future net taxable income.
Previous wording
The Company has 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/loss of Nobility Healthcare which is reflected in the condensed consolidated statement of income (loss) as “net income (loss) attributable to noncontrolling interests of consolidated subsidiary”. We reported net income attributable to noncontrolling interests of consolidated subsidiary of $55,997 and $73,310 for the three months ended June 30, 2025 and 2024, respectively.
Current wording
The Company has 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/loss of Nobility Healthcare which is reflected in the condensed consolidated statement of income (loss) as “net income (loss) attributable to noncontrolling interests of consolidated subsidiary”. We reported net income attributable to noncontrolling interests of consolidated subsidiary of $58,525 and a net loss of $2,000,206 for the three months ended September 30, 2025 and 2024, respectively.
Previous wording
Summarized financial information for the Company’s reportable business segments is provided for the six months ended June 30, 2025, and 2024:
Current wording
Summarized financial information for the Company’s reportable business segments is provided for the nine months ended September 30, 2025, and 2024:
Previous wording
Total revenues for the six months ended June 30, 2025, and 2024 were $10,107,303 and $11,145,586, respectively, a slight decrease of $1,038,283 (9.3%), due to the reasons noted above.
Current wording
Total revenues for the nine months ended September 30, 2025, and 2024 were $14,644,460 and $15,197,297, respectively, a slight decrease of $552,837 (3.6%), due to the reasons noted above.
Previous wording
Overall cost of product revenue sold for the six months ended June 30, 2025, and 2024 was $4,577,503 and $4,986,647, respectively, a decrease of $409,144 (8.2%). Overall cost of goods sold for products as a percentage of product revenues for the six months ended June 30, 2025, and 2024 were 156% and 132%, 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, 2025, and 2024 was $5,482,693 and $5,534,209, respectively, a slight decrease of $51,516 (1%). Overall cost of goods sold for products as a percentage of product revenues for the nine months ended September 30, 2025, and 2024 were 152% and 121%, 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 due to large decrease in product sales experienced during the six months ended June 30, 2025 compared to 2024. We were not able to fulfil open orders due to low inventory levels. We have utilized funds from the February 2025 public equity offering to ramp the supply chain which we believe will lead to improved product sales during the remainder of 2025. Cost of product sold as a percentage of product revenues for the video solutions segment increased to 132% for the six months ended June 30, 2025 as compared to 131% for the six months ended June 30, 2024.
Current wording
The decrease in cost of goods sold for our video solutions segment products is due to decrease in product sales experienced during the nine months ended September 30, 2025 compared to 2024. We were not able to fulfil open orders due to low inventory levels. We have utilized funds from the February 2025 public equity offering to ramp the supply chain which we believe will lead to improved product sales during the remainder of 2025. Cost of product sold as a percentage of product revenues for the video solutions segment increased to 156% for the nine months ended September 30, 2025 as compared to 116% for the nine months ended September 30, 2024.
Previous wording
The increase in entertainment operating segment cost of product sold directly correlates to the increased revenues and costs associated with our annual Country Stampede Music Festival. Cost of product sold related to the 2025 Country Stampede Music Festival totaled $2,992,052 as compared to $1,848,167 for the 2024 Festival. Total cost of product revenues for the entertainment operating segment was $3,317,407 and $2,460,792 for the three months ended June 30, 2025 and 2024, an increase of $856,615 (34.8%). Cost of product sold as a percentage of product revenues for the entertainment segment increased to 191% for the three months ended June 30, 2025 as compared to 155% for the three months ended June 30, 2024.
Current wording
The increase in entertainment operating segment cost of product sold directly correlates to the increased revenues and costs associated with our annual Country Stampede Music Festival. Cost of product sold related to the 2025 Country Stampede Music Festival totaled $2,992,052 as compared to $1,848,167 for the 2024 Festival. Total cost of product revenues for the entertainment operating segment was $4,357,017 and $3,620,853 for the nine months ended September 30, 2025 and 2024, an increase of $736,164 (20.3%). Cost of product sold as a percentage of product revenues for the entertainment segment increased to 151% for the nine months ended September 30, 2025 as compared to 124% for the nine months ended September 30, 2024.
Previous wording
Overall cost of service revenue sold for the six months ended June 30, 2025, and 2024 was $4,560,926 and $4,395,109, respectively, an increase of $165,817 (3.8%). Overall cost of goods sold for services as a percentage of service revenues for the six months ended June 30, 2025, and 2024 were 64% and 60%, 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, 2025, and 2024 was $6,821,318 and $6,159,284, respectively, an increase of $662,035 (10.7%). Overall cost of goods sold for services as a percentage of service revenues for the nine months ended September 30, 2025, and 2024 were 62% and 58%, respectively. Cost of service revenues by operating segment is as follows:
Previous wording
The decrease in revenue cycle management operating segment cost of service revenue is commensurate with the decline in revenues due to certain loss generating services being eliminated during the year. Cost of service revenues as a percentage of product revenues for the revenue cycle management operating segment remained stable at 62% for the three months ended June 30, 2025 as compared to 62% for the three months ended June 30, 2024.
Current wording
The decrease in revenue cycle management operating segment cost of service revenue is commensurate with the decline in revenues due to certain loss generating services being eliminated during the year. Cost of service revenues as a percentage of product revenues for the revenue cycle management operating segment remained stable at 63% for the nine months ended September 30, 2025 as compared to 62% for the nine months ended September 30, 2024.
Previous wording
The increase in entertainment operating segment cost of service revenues is due to management right sizing the business working towards profitability. The entertainment segment terminated several unprofitable sponsorships which required termination payments during the six months ended June 30, 2025, that is expected to lead to improvements in costs of service revenues during the remainder of 2025. The entertainment segment cost of service revenue was $2,107,401 for the six months ended June 30, 2025, compared to $1,766,821 for the six months ended June 30, 2024. Cost of service revenues as a percentage of service revenues for the entertainment segment increased to 81% for the six months ended June 30, 2025 as compared to 73% for the six months ended June 30, 2024.
Current wording
The increase in entertainment operating segment cost of service revenues is due to management right sizing the business working towards profitability. The entertainment segment terminated several unprofitable sponsorships which required termination payments during the nine months ended September 30, 2025, that is expected to lead to improvements in costs of service revenues during the remainder of 2025. The entertainment segment cost of service revenue was $3,218,978 for the nine months ended September 30, 2025, compared to $2,325,987 for the nine months ended September 30, 2024. Cost of service revenues as a percentage of service revenues for the entertainment segment increased to 82% for the nine months ended September 30, 2025 as compared to 73% for the nine months ended September 30, 2024.
Previous wording
Overall gross profit for the six months ended June 30, 2025 and 2024 was $(632,625) and $242,392, respectively, a decrease of $875,017 (361%). Gross profit by operating segment was as follows:
Current wording
Overall gross profit for the nine months ended September 30, 2025 and 2024 was $2,340,449 and $3,503,804, respectively, a decrease of $1,163,355 (33.2%). Gross profit by operating segment was as follows:
Previous wording
The decrease in gross profits is primarily due to a deterioration in our cost of sales as a percentage of sales particularly in our entertainment segment service product and service revenues. The primary reason is the larger negative margins generated by our 2025 Country Stampede Music Festival as compared to the 2024 Festival. There was an overall increase in the cost of sales as a percentage of overall revenues to 90% for the six months ended June 30, 2025 from 84% for the six months ended June 30, 2024. The primary reason for the overall negative gross margins in 2025 is the larger negative margins generated by our 2025 Country Stampede Music Festival as compared to the 2024 Festival.
Current wording
The decrease in gross profits is primarily due to a deterioration in our cost of sales as a percentage of sales particularly in our entertainment segment service product and service revenues. The primary reason is the larger negative margins generated by our 2025 Country Stampede Music Festival as compared to the 2024 Festival. There was an overall increase in the cost of sales as a percentage of overall revenues to 84% for the nine months ended September 30, 2025 from 77% for the nine months ended September 30, 2024.
Previous wording
Selling, general and administrative expenses were $3,462,448 and $4,156,613 for the three months ended June 30, 2025 and 2024, respectively, a decrease of $694,165 (17%). The decrease was primarily attributable to the reduction in new advertising sponsorships being entered into by the Company and large reductions in selling, general and administrative head count as the Company right-sized its operations across all operating segments. Our selling, general and administrative expenses as a percentage of sales increased to 61% for the three months ended June 30, 2025 compared to 74% in the same period in 2024. The significant components of selling, general and administrative expenses are as follows:
Current wording
Selling, general and administrative expenses were $8,531,984 and $18,439,296 for the nine months ended September 30, 2025 and 2024, respectively, a decrease of $9,907,312 (53.7%). The decrease was primarily attributable to the reduction in new advertising sponsorships being entered into by the Company and large reductions in selling, general and administrative head count as the Company right-sized its operations across all operating segments. Our selling, general and administrative expenses as a percentage of sales increased to 58% for the nine months ended September 30, 2025 compared to 121% in the same period in 2024. 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 $391,178 and $1,487,762 for the six months ended June 30, 2025 and 2024, respectively, a decrease of $1,096,584 (73.7%). 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 wording
***Selling, advertising and promotional expenses.***Selling, advertising and promotional expense totaled $501,184 and $1,902,489 for the nine months ended September 30, 2025 and 2024, respectively, a decrease of $1,401,305 (73.7%). The decrease in selling, advertising and promotional expenses is due to significant reductions in sales staffing and in promotional and advertising activities, undertaken to right-size these expenses to current revenue levels. Additionally, the decline reflects fewer new sponsorship agreements at the Company and its subsidiary, TicketSmarter.
Previous wording
General and administrative expense. General and administrative expenses totaled $5,379,221 and $6,796,019 for the six months ended June 30, 2025 and 2024, respectively which represents a decrease of $1,416,798 (20.8%). The decrease in general and administrative expenses in the six months ended June 30, 2025 compared to the same period in 2024 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 six months ended June 30, 2025 compared to the same period in 2024 due to the failed merger with CloverLeaf and various capital raises we have undertaken.
Current wording
General and administrative expense. General and administrative expenses totaled $7,624,817 and $10,462,747 for the nine months ended September 30, 2025 and 2024, respectively which represents a decrease of $2,837,930 (27.1%). The decrease in general and administrative expenses in the nine months ended September 30, 2025 compared to the same period in 2024 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 also attributable to a substantial decrease in legal and professional expenses for the nine months ended September 30, 2025 compared to the same period in 2024 due to the failed merger with CloverLeaf and various capital raises we have undertaken in the 2024 period.
Previous wording
For the reasons previously stated, our operating loss was $5,069,753 and $7,553,193 for the six months ended June 30, 2025 and 2024, respectively, an improvement of $2,483,440 (32.9%). Operating loss as a percentage of revenues improved to 50.2% in 2025 as compared to 67.8% in 2024.
Current wording
For the reasons previously stated, our operating loss was $6,191,535 and $14,935,492 for the nine months ended September 30, 2025 and 2024, respectively, an improvement of $8,743,957 (58.5%). Operating loss as a percentage of revenues improved to 42% in 2025 as compared to 98% in 2024.
Previous wording
Interest income increased to $77,921 for the six months ended June 30, 2025, from $49,289 in 2024, which reflects our overall increase in our cash and cash equivalent levels in 2025 compared to 2024 due to funds generated in the February 2025 public equity offering.
Current wording
Interest income increased to $95,808 for the nine months ended September 30, 2025, from $63,064 in 2024, which reflects our overall increase in our cash and cash equivalent levels in 2025 compared to 2024 due to funds generated in the February 2025 public equity offering and the net proceeds from our September 2025 senior convertible note issuance.
Previous wording
We incurred interest expenses of $869,553 and $1,733,690 during the six months ended June 30, 2025 and 2024, respectively. The large decrease is attributable to the Company paying off most of its interest-bearing debt in late 2024 and early 2025 including the senior secured promissory notes that were paid off with proceeds from the February 2025 public equity offering.
Current wording
We incurred interest expenses of $960,250 and $2,505,536 during the nine months ended September 30, 2025 and 2024, respectively. The large decrease is attributable to the Company paying off most of its interest-bearing debt in late 2024 and early 2025 including the $3.6 million senior secured promissory notes that were paid off with proceeds from the February 2025 public equity offering.
Previous wording
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 debt extinguishment during the six months ended June 30, 2024.
Current wording
During the nine months ended September 30, 2024, the Company refinanced its merchant advance loan for its video segment 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 nine months ended September 30, 2024.
Previous wording
The change in fair value of the warrant derivative liabilities for the three months ended June 30, 2025 and 2024, respectively totaled a gain of $857,189 during the three months ended June 30, 2025 as compared to a loss of $2,818 during the three months ended June 30, 2024. The Company has issued various detachable warrants in connection with capital raises during 2024 and 2025 that were required to be treated as warrant derivative liabilities. Warrant derivative liabilities are required to be marked-to-market at each balance sheet date with the change in fair value recorded as a gain or loss in the Condensed Statement of Operations. The gain recorded in the three months ended June 30, 2025 reflects the large decline in the closing market value of our common stock at June 30, 2025 when compared to March 31, 2025 closing market values.
Current wording
The change in fair value of the warrant derivative liabilities for the nine months ended September 30, 2025 and 2024, respectively totaled a gain of $3,373,919 during the nine months ended September 30, 2025 as compared to a gain of $2,178,965 during the nine months ended September 30, 2024. The Company has issued various detachable warrants in connection with capital raises during 2024 and 2025 that were required to be treated as warrant derivative liabilities. Warrant derivative liabilities are required to be marked-to-market at each balance sheet date with the change in fair value recorded as a gain or loss in the Condensed Statement of Operations. The gain recorded in the nine months ended September 30, 2025 reflects the large decline in the closing market value of our common stock at September 30, 2025 when compared to December 31, 2024 closing market values.
Previous wording
The Company recorded a gain on the extinguishment of liabilities for the six months ended June 30, 2025 and 2024 of $2,230,716, and $682,345, respectively. The gains reflect income related to the video solutions and entertainment segment’s ability to negotiate down payables and other contract obligations during the six months ended June 30, 2025 utilizing funds generated by the closing of the February 2025 public equity offering on February 13, 2025.
Current wording
The Company recorded a gain on the extinguishment of liabilities for the nine months ended September 30, 2025 and 2024 of $2,243,991, and $691,730, respectively. The gains reflect income related to the video solutions and entertainment segment’s ability to negotiate down payables and other contract obligations during the nine months ended September 30, 2025 utilizing funds generated by the closing of the February 2025 public equity offering on February 13, 2025.
Previous wording
The gain on extinguishment of liabilities was $682,345 for the six months ended June 30, 2024, which reflects income related to the entertainment segment’s ability to negotiate down payables and other contract obligations 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 condensed consolidated statement of operations for the six months ended June 30, 2024.
Current wording
The gain on extinguishment of liabilities was $691,730 for the nine months ended September 30, 2024, which reflects income related to the entertainment segment’s ability to negotiate down payables and other contract obligations 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 condensed consolidated statement of operations for the nine months ended September 30, 2024.
Previous wording
Gain on disposal of intangibles decreased to $-0- for the six months ended June 30, 2025, from $5,582 during the six months ended June 30, 2024.
Current wording
Gain on disposal of intangibles decreased to $-0- for the nine months ended September 30, 2025, from $5,582 during the nine months ended September 30, 2024.
Previous wording
The Company reported a loss on sale of property, plant and equipment of $-0- and $41,661 during the six months ended June 30, 2025, and 2024, respectively.
Current wording
The Company reported a gain on sale of property, plant and equipment of $-0- and $389,522 during the nine months ended September 30, 2025, and 2024, respectively.
Previous wording
Loss on Sale of Property, Plant and Equipment
Current wording
During the nine 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 nine months ended September 30, 2024. This amount was offset by a separate loss on sale of fixed assets of $41,661 for the nine months ended September 30, 2024
Previous wording
As a result of the above, we reported net loss before income tax benefit of $(222,122) and $(8,953,819) for the six months ended June 30, 2025 and 2024, respectively, an improvement of $9,175,941 (102.5%).
Current wording
As a result of the above, we reported net loss before income tax benefit of $(1,185,464) and $(14,424,531) for the nine months ended September 30, 2025 and 2024, respectively, an improvement of $13,239,067 (91.8%).
Showing the first 40 of 50 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (6)
Previous report — wording carried elsewhere
The decrease in cost of goods sold for our video solutions segment products is due to large decrease in product sales experienced during the three months ended June 30, 2025. We could not fulfil open orders due to low inventory levels. We have utilized funds from the February 2025 public equity offering to ramp the supply chain which we believe will lead to improved product sales during the remainder of 2025. Cost of product sold as a percentage of product revenues for the video solutions segment decreased to 133% for the three months ended June 30, 2025 as compared to 154% for the three months ended June 30, 2024.
Previous report — wording carried elsewhere
The decrease in gross profits is primarily due to a deterioration in our cost of sales as a percentage of sales particularly in our entertainment segment service product and service revenues. The primary reason is the larger negative margins generated by our 2025 Country Stampede Music Festival as compared to the 2024 Festival. There was an overall increase in the cost of sales as a percentage of overall revenues to 111% for the three months ended June 30, 2025 from 96% for the three months ended June 30, 2024. The primary reason for the overall negative gross margins in 2025 is the larger negative margins generated by our 2025 Country Stampede Music Festival as compared to the 2024 Festival.
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 debt extinguishment during the three months ended June 30, 2024.** **
Previous report — wording carried elsewhere
The basic and diluted loss per share was $(3.21) and ($3,479.71) for the three months ended June 30, 2025 and 2024, respectively, for the reasons previously noted. All outstanding stock options and Common Stock purchase warrants were considered antidilutive and therefore excluded from the calculation of diluted loss per share for the three months ended June 30, 2025 and 2024 because of their exercise price being higher than the market value of our Common Stock and the net loss reported for 2025 and 2024.
Previous report — wording carried elsewhere
The increase in entertainment operating segment cost of product sold directly correlates to the increased revenues and costs associated with our annual Country Stampede Music Festival. Cost of product sold related to the 2025 Country Stampede Music Festival totaled $2,992,052 as compared to $1,848,167 for the 2024 Festival. Total cost of product revenues for the entertainment operating segment was $3,928,494 and $3,230,691 for the six months ended June 30, 2025 and 2024, an increase of $697,803 (21.6%). Cost of product sold as a percentage of product revenues for the entertainment segment increased to 161% for the six months ended June 30, 2025 as compared to 133% for the six months ended June 30, 2024.
Previous report — wording carried elsewhere
The decrease in revenue cycle management operating segment cost of service revenue is commensurate with the decline in revenues due to certain loss generating services being eliminated during the year. Cost of service revenues as a percentage of product revenues for the revenue cycle management operating segment remained stable at 63% for the six months ended June 30, 2025 as compared to 64% for the six months ended June 30, 2024.