DIGITAL ALLY, INC.
For the period ended Jun 30, 2025. Filed Aug 18, 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.
Jun 30, 2025 · Filed Aug 18, 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 2025-03-31; filed 2025-05-20.
0001641172-25-011765
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent 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 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 154 previous paragraphs and 223 current paragraphs.
97 unchanged; 46 reworded; 50 added; 10 removed; 1 previous and 30 current paragraphs rearranged.
Tables are not compared: 25 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 (50)
Current report
Reverse Stock Split
Current 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:
Current 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:
Current report
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 report
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.
Current report
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 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.
Current report
Loss on Extinguishment of debt
Current report
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.** **
Current report
Loss before Income Tax Benefit
Current 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%).
Current 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%).
Current 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%).
Current report
Basic and Diluted Loss per Share
Current report
Comparison of the Six Months Ended June 30, 2025 and 2024
Current report
Summary Financial Data
Current report
Results of Operations
Current report
Revenues
Current report
Product revenues by operating segment are as follows:
Current 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:
Current 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:
Current report
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 report
Cost of Product Revenue
Current report
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 report
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.
Current report
Cost of Service Revenue
Current report
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 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.
Current report
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 report
Gross Profit
Current report
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 report
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 report
Selling, General and Administrative Expenses
Current report
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 report
Operating Loss
Current report
Interest Income
Current report
Interest Expense
Current report
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 report
Other income (expense)
Current report
Loss on Extinguishment of debt
Showing the first 40 of 50 passages. Open the source sections for the rest.
Removed paragraphs (10)
Previous report
Product revenues for the three months ended March 31, 2025 and 2024 were $721,350 and $1,565,846, respectively, a decrease of $844,496 (53.9%), due to the following factors:
Previous report
Service and other revenues for the three months ended March 31, 2025 and 2024 were $3,753,914 and $3,963,505, respectively, a decrease of $209,591 (5%), due to the following factors:
Previous report
The decrease in entertainment operating segment cost of product sold directly correlates to the lower product revenues for the three months ended March 31, 2025. Cost of Product Revenues were $611,087 and $769,899 for the three months ended March 31, 2025 and 2024, a decrease of $158,812 (21%). Cost of product sold as a percentage of product revenues for the entertainment segment increased to 92% for the three months ended March 31, 2025 as compared to 91% for the three months ended March 31, 2024.
Previous report
The increase in gross profits is primarily due to improvements in our cost of sales as a percentage of sales particularly in our entertainment segment service revenues. There was an overall decrease in the cost of sales as a percentage of overall revenues to 64% for the three months ended March 31, 2025 from 72% for the three months ended March 31, 2024. This is primarily driven by large head-count reductions in our work-force during the three months ended March 31, 2025 as compared to 2024, a focus on right sizing recent acquisitions to increase profitability and a transition to a service subscription-based model in our video solutions segment. 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, EVO Fleet, FLT-250, DVM-250, DVM-250 Plus and our cloud evidence storage and management offering, provided that they gain traction in the marketplace. 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 report
During 2024, the Company issued Series A and Series B detachable warrants in conjunction with its June 2024 capital raise. The underlying warrant terms under both of the Series A and Series B warrants provide for net cash settlement outside the control of the Company in the event of tender offers under certain circumstances and requires reset provisions which were triggered upon the approval the warrant issuances by the Company’s shareholders. 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 warrants were approved by shareholders at the Company’s annual meeting on December 17, 2024, which triggered the reset provisions which resulted in an increase in the estimated fair value of the Series A and Series B warrants. The holders fully exercised their Series B warrants during the three months ended March 31, 2025 which caused a deterioration in the market value of the Company’s Common Stock which resulted in a large decrease in the estimated fair value of the remaining Class A warrants resulting in the gain from the change in fair value of warrant derivative liabilities in the condensed consolidated statement of operations for the three months ended March 31, 2025.
Previous report
During 2023, the Company issued detachable warrants to purchase a total of 56,250 shares of Common Stock in association with the two secured convertible notes. The underlying warrant 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 increase in the estimated fair value of the 2023 warrants resulted in a loss from the change in fair value of warrant derivative liabilities in the condensed consolidated statement of operations for the three months ended March 31, 2025.
Previous report
Income (loss) before Income Tax Benefit
Previous report
As a result of the above, we reported net income (loss) before income tax benefit of $4,267,082 and $(3,943,268) for the three months ended March 31, 2025 and 2024, respectively, an improvement of $8,210,350 (208%).
Previous report
As a result of the above, we reported a net income (loss) of $4,267,082 and $(3,943,268) for the three months ended March 31, 2025 and 2024, respectively, an improvement of $8,210,350 (208%).
Previous report
As a result of the above, we reported a net income (loss) of $4,263,471 and $(3,931,020) for the three months ended March 31, 2025 and 2024, respectively, an improvement of $8,194,491 (208%).
Reworded paragraphs (46)
Previous wording
The Company timely requested a hearing before the Panel to appeal the March 6 Letter and to address all outstanding matters, including compliance with the Minimum Bid Price Requirement, the Low Priced Stocks Rule and the Stockholders’ Equity Requirement, which hearing date has not been set as of the date of this Form 10-K. While the appeal process is pending, the suspension of trading of the Company’s Common Stock, will be stayed and the Common Stock will continue to trade on the Nasdaq Capital Market until the hearing process concludes and the Panel issues a written decision. The Company held its hearing with the Panel as scheduled on April 17, 2025.
Current wording
The Company timely requested a hearing before the Panel to appeal the March 6 Letter and to address all outstanding matters, including compliance with the Minimum Bid Price Requirement, the Low-Priced Stocks Rule and the Stockholders’ Equity Requirement. While the appeal process was pending, the suspension of trading of the Company’s Common Stock, was stayed and the Common Stock continued to trade on the Nasdaq Capital Market until the hearing process concludes, and the Panel issues a written decision. The Company held its hearing with the Panel as scheduled on April 17, 2025.
Previous wording
On May 1, 2025, the Panel rendered its decision which granted the Company’s request for continued listing on the Nasdaq Exchange. Such decision is subject to the following conditions:
Current wording
On May 1, 2025, the Panel rendered its decision which granted the Company’s request for continued listing on the Nasdaq Exchange. Such decision is subject to the Company meeting and maintaining the following conditions:
Previous wording
There are no assurances however, that the Company will be able to meet and maintain all such conditions required by the Panel.
Current wording
The Company has worked diligently to regain and maintain compliance with the Minimum Bid Price Requirement and Stockholders’ Equity Requirement as promptly as possible. In that regard, management believes that it has achieved compliance with the Stockholders’ Equity Requirement as reported in the accompanying Statement of Stockholders’ Equity (Deficit) as of June 30, 2025. Furthermore, management believes that it has achieved compliance with the Minimum Bid Price Requirement prior to June 6, 2025, as required by the Panel. Management believes that it has met all other requirements as requested by the Panel. There are no assurances however, that the Company will be able to meet and maintain all such conditions required by the Panel.
Previous wording
Video Solutions Operating Segment – Within our video solutions operating segment we supply technology-based products utilizing our portable digital video and audio recording capabilities for the law enforcement and security industries and for the commercial fleet and mass transit markets. We have the ability to integrate electronic, radio, computer, mechanical, and multi-media technologies to create positive solutions to our customers’ requests. Our products include: the EVO-HD, DVM-800 and DVM-800 Lite, which are in-car digital video systems for law enforcement and commercial markets; the FirstVU body-worn camera line, consisting of the FirstVu Pro, FirstVu, and the FirstVU HD; our patented and revolutionary VuLink product integrates our body-worn cameras with our in-car systems by providing hands-free automatic activation for both law enforcement and commercial markets; EVO Web Portal, which is our cloud-based evidence management system for Law enforcement and commercial market; the EVO Fleet, FLT-250, DVM-250, and DVM-250 Plus, which are our commercial line of digital video products that serve as “event recorders” for the commercial fleet and mass transit markets; and FleetVu and VuLink, which are our cloud-based evidence management systems. We further diversified and broadened our product offerings in 2020, by introducing two new lines of branded products: (1) the ThermoVu™ which is a line of self-contained temperature monitoring stations that provides alerts and controls facility access when an individual’s temperature exceeds a pre-set threshold and (2) our Shield™ disinfectants and cleansers which are for use against viruses and bacteria.
Current wording
Video Solutions Operating Segment – Within our video solutions operating segment we supply technology-based products utilizing our portable digital video and audio recording capabilities for the law enforcement and security industries and for the commercial fleet and mass transit markets. We can integrate electronic, radio, computer, mechanical, and multi-media technologies to create positive solutions to our customers’ requests. Our products include: the EVO-HD, DVM-800 and DVM-800 Lite, which are in-car digital video systems for law enforcement and commercial markets; the FirstVU body-worn camera line, consisting of the FirstVu Pro, FirstVu, and the FirstVU HD; our patented and revolutionary VuLink product integrates our body-worn cameras with our in-car systems by providing hands-free automatic activation for both law enforcement and commercial markets; EVO Web Portal, which is our cloud-based evidence management system for Law enforcement and commercial market; the EVO Fleet, FLT-250, DVM-250, and DVM-250 Plus, which are our commercial line of digital video products that serve as “event recorders” for the commercial fleet and mass transit markets; and FleetVu and VuLink, which are our cloud-based evidence management systems. We further diversified and broadened our product offerings in 2020, by introducing two new lines of branded products: (1) the ThermoVu™ which is a line of self-contained temperature monitoring stations that provides alerts and controls facility access when an individual’s temperature exceeds a pre-set threshold and (2) our Shield™ disinfectants and cleansers which are for use against viruses and bacteria.
Previous wording
Our video solutions segment revenue encompasses video recording products and services for our law enforcement and commercial customers and the sale of Shield disinfectant and personal protective products. This segment generates revenues through our subscription models offering cloud and warranty solutions, and hardware sales for video and personal protective safety products and solutions. Revenues for product sales are recognized upon delivery of the product, and revenues from our cloud and warranty subscription plans are deferred over the term of the subscription, typically 3 or 5 years.
Current wording
Our video solutions segment revenue encompasses video recording products and services for our law enforcement and commercial customers and the sale of Shield disinfectant and personal protective products. This segment generates revenue through our subscription models offering cloud and warranty solutions, and hardware sales for video and personal protective safety products and solutions. Revenues for product sales are recognized upon delivery of the product, and revenues from our cloud and warranty subscription plans are deferred over the term of the subscription, typically 3 or 5 years.
Previous wording
Our revenue cycle management segment consists of our medical billing subsidiaries. Revenues of this segment are recognized after we perform the obligations of our revenue cycle management services. Our revenue cycle management services are services, performed and charged monthly, generally based on a contractual percentage of total customer collections, for which we recognize our net service fees.
Current wording
Our revenue cycle management segment consists of our medical billing subsidiaries. Revenues of this segment are recognized after we fulfil the obligations of our revenue cycle management services. Our revenue cycle management services are services, performed and charged monthly, generally based on a contractual percentage of total customer collections, for which we recognize our net service fees.
Previous wording
Entertainment Operating Segment - We also entered into live entertainment and events ticketing services through the formation of our wholly owned subsidiary, TicketSmarter and its completed acquisitions of Goody Tickets, LLC and TicketSmarter, LLC, on September 1, 2021. TicketSmarter provides ticket sales, partnerships, and mainly, ticket resale services through its online ticketing marketplace for live events, TicketSmarter.com. TicketSmarter offers tickets for over 125,000 live events throughout the country through its platform, including concerts, sporting events, theatres, and performing arts. We also offer production and promotion of live music events in third-party venues throughout the country. These services begin with the logistical matters of an event, including artist booking and research, ticketing, staging, on-site operations, vendor sourcing, and day of production.
Current wording
Entertainment Operating Segment - We also entered the live entertainment and events ticketing services through the formation of our wholly owned subsidiary, TicketSmarter and its completed acquisitions of Goody Tickets, LLC and TicketSmarter, LLC, on September 1, 2021. TicketSmarter provides ticket sales, partnerships, and mainly, ticket resale services through its online ticketing marketplace for live events, TicketSmarter.com. TicketSmarter offers tickets for over 125,000 live events throughout the country through its platform, including concerts, sporting events, theatres, and performing arts. We also began offering production and promotion services in relation to live music events in third-party venues throughout the country through our Kustom Entertainment, Inc. subsidiary. These services begin with the logistical matters of an event, including artist booking and research, ticketing, staging, on-site operations, vendor sourcing, and day of production.
Previous wording
Our operating segments generate two types of revenues:
Current wording
Our operating segments generate two types of revenue:
Previous wording
Product revenuesprimarily includes video solutions operating segment hardware sales of in-car and body-worn cameras, along with sales of our ThermoVu TMunits, disinfectants, and personal protective equipment. Additionally, product revenues also include the sale of tickets by our entertainment operating segment that have been purchased or received through our sponsorships and partnerships and held in inventory by our entertainment segment until their sale.
Current wording
Product revenuesprimarily include video solutions operating segment hardware sales of in-car and body-worn cameras. Additionally, product revenues also include the sale of tickets by our entertainment operating segment that have been purchased or received through our sponsorships and partnerships and held in inventory by our entertainment segment until their sale. Our entertainment sector also generates product revenue through our production of live events and concerts including our annual Country Stampede music festival.
Previous wording
Product revenues by operating segment is as follows:
Current wording
Product revenues by operating segment are as follows:
Previous wording
Total revenues for the three months ended March 31, 2025, and 2024 were $4,475,264 and $5,529,351, respectively, a decrease of $1,054,087 (19%), due to the reasons noted above.
Current 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.
Previous wording
Overall cost of product revenue sold for the three months ended March 31, 2025, and 2024 was $675,639 and $1,567,393, respectively, a decrease of $891,754 (57%). Overall cost of goods sold for products as a percentage of product revenues for the three months ended March 31, 2025, and 2024 were 94% and 100%, respectively. Cost of products sold by operating segment is as follows:
Current 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:
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 three months ended March 31, 2025. 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. Cost of product sold as a percentage of product revenues for the video solutions segment decreased to 119% for the three months ended March 31, 2025 as compared to 111% for the three months ended March 31, 2024.
Current 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 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 wording
Overall cost of service revenue sold for the three months ended March 31, 2025, and 2024 was $2,198,126 and $2,438,259, respectively, a decrease of $240,133 (10%). Overall cost of goods sold for services as a percentage of service revenues for the three months ended March 31, 2025, and 2024 were 59% and 62%, respectively. Cost of service revenues by operating segment is as follows:
Current 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:
Previous wording
The 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 three months ended March 31, 2025 compared to the three months ended March 31, 2024. Cost of service revenues as a percentage of service revenues for the video solutions segment decreased to 35% for the three months ended March 31, 2025 as compared to 36% for the three months ended March 31, 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 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.
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 decreased to 65% for the three months ended March 31, 2025 as compared to 68% for the three months ended March 31, 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 62% for the three months ended June 30, 2025 as compared to 62% for the three months ended June 30, 2024.
Previous wording
The decrease in entertainment operating segment cost of service revenues is due to management right sizing the business working towards profitability. The Entertainment cost of service revenue was $1,013,170 for the three months ended March 31, 2025, compared to $1,112,287 for the three months ended March 31, 2024. Cost of service revenues as a percentage of service revenues for the entertainment segment decreased to 66% for the three months ended March 31, 2025 as compared to 73% for the three months ended March 31, 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 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.
Previous wording
Overall gross profit for the three months ended March 31, 2025 and 2024 was $1,796,034 and $1,523,699, respectively, an increase of $272,335 (18%). Gross profit by operating segment was as follows:
Current 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:
Previous wording
Selling, general and administrative expenses were $2,576,179 and $5,162,733 for the three months ended March 31, 2025 and 2024, respectively, a decrease of $2,586,554 (50%). The decrease was primarily attributable to the reduction in new advertising sponsorships being entered into by the Company. Our selling, general and administrative expenses as a percentage of sales increased to 58% for the three months ended March 31, 2025 compared to 93% 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 $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:
Previous wording
***Research and development expense.***Our research and development expenses totaled $84,417 and $487,466 for the three months ended March 31, 2025 and 2024, respectively which represents a decrease of $403,049 (83%). 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 wording
***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 wording
***Selling, advertising and promotional expenses.***Selling, advertising and promotional expense totaled $108,041 and $761,118 for the three months ended March 31, 2025 and 2024, respectively, a decrease of $653,077 (86%). 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 $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.
Previous wording
Interest income increased to $31,975 for the three months ended March 31, 2025, from $19,356 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 $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.
Previous wording
We incurred interest expenses of $792,273 and $648,567 during the three months ended March 31, 2025 and 2024, respectively. The increase is attributable to the amortization of debt discounts associated with 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 $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.
Previous wording
Other income (expense) decreased to $16,700 for the three months ended March 31, 2025, from $27,602 during the three months ended March 31, 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.
Current wording
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 wording
Gain on Extinguishment of Debt -related party
Current wording
Loss on Extinguishment of Debt -related party
Previous wording
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. No payments have been made during the three months ended March 31, 2025.
Current wording
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 wording
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 of $1,249,372 during the three months ended March 31, 2025.
Current wording
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 wording
The change in fair value of the warrant derivative liabilities for the three months ended March 31, 2025 and 2024, respectively totaled a gain of $2,515,891 during the three months ended March 31, 2025 as compared to a loss of $348,891 during the three months ended March 31, 2024.
Current 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.
Previous wording
We had approximately $159,280,000 of federal net operating loss carryforwards and $1,742,000 of research and development tax credit carryforwards as of March 31, 2025 and December 31, 2024 available to offset future net taxable income.
Current 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.
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/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 $3,611 and $12,248 for the three months ended March 31, 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 $55,997 and $73,310 for the three months ended June 30, 2025 and 2024, respectively.
Previous wording
General and administrative expense. General and administrative expenses totaled $2,383,721 and $3,914,149 for the three months ended March 31, 2025 and 2024, respectively which represents a decrease of $1,530,428 (39%). The decrease in general and administrative expenses in the three months ended March 31, 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 three months ended March 31, 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 $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.
Previous wording
For the reasons previously stated, our operating loss was $974,680 and $3,639,034 for the three months ended March 31, 2025 and 2024, respectively, an improvement of $2,664,354 (73%). Operating loss as a percentage of revenues improved to 22% in 2025 as compared to 66% in 2024.
Current 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.
Previous wording
The Company recorded a gain on the extinguishment of liabilities for the three months ended March 31, 2025 and 2024 of $2,220,097, 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 three months ended March 31, 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 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.
Previous wording
The gain on extinguishment of liabilities was $682,345 for the three months ended March 31, 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 three months ended March 31, 2024.
Current 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.
Previous wording
Gain on disposal of intangibles decreased to $-0- for the three months ended March 31, 2025, from $5,582 during the three months ended March 31, 2024.
Current 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.
Previous wording
The Company reported a loss on sale of property, plant and equipment of $-0- and $41,661 during the three months ended March 31, 2025, and 2024, respectively.
Current 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.
Previous wording
The basic and diluted income/(loss) per share was $1.41 and ($27.48) for the three months ended March 31, 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 income (loss) per share for the three months ended March 31, 2025 and 2024 because all potentially dilutive securities were excluded from the computation because of their exercise price being higher than the market value of our Common Stock in 2025 and the net loss reported for 2024.
Current wording
The basic and diluted loss per share was $0.54 and ($6,234.36) for the six months ended June 30, 2025 and 2024, respectively, for reasons previously noted. All outstanding stock options and Common Stock purchase warrants were considered antidilutive and therefore excluded from the calculation of diluted income (loss) per share for the six months ended June 30, 2025 and 2024. Such potentially dilutive securities were excluded from the computation 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 wording
Cash, cash equivalents: As of March 31, 2025, we had cash and cash equivalents with an aggregate balance of $3,762,608, an increase from a balance of $454,314 at December 31, 2024. Summarized immediately below and discussed in more detail in the subsequent subsections are the main elements of the $3,308,294 net increase in cash during the three months ended March 31, 2025:
Current wording
Cash, cash equivalents: As of June 30, 2025, we had cash and cash equivalents with an aggregate balance of $622,820, an increase from a balance of $454,314 at December 31, 2024. Summarized immediately below and discussed in more detail in the subsequent subsections are the main elements of the $168,506 net increase in cash during the six months ended June 30, 2025:
Previous wording
The net result of these activities was an increase in cash of $3,308,294 to $3,762,608 for the three months ended March 31, 2025.
Current wording
The net result of these activities was an increase in cash of $168,506 to $622,820 for the six months ended June 30, 2025.
Previous wording
We had $3,762,608 of cash and cash equivalents and net positive working capital of $3,385,051 as of March 31, 2025. Accounts receivable and other receivables balances represented $4,923,191 of our net working capital at March 31, 2025. We intend to collect our outstanding receivables on a timely basis and reduce the overall level during 2025, which would help to provide positive cash flow to support our operations during 2025 and beyond. Inventory represents $2,489,111 of our net working capital at March 31, 2025. We are actively managing the level of inventory and our goal is to reduce such level during 2025 by our sales activities, the decrease of which should provide additional cash flow to help support our operations during 2025 and beyond.
Current wording
We have $622,820 of cash and cash equivalents and net positive working capital of $119,506 as of June 30, 2025. Accounts receivable and other receivables balances represented $4,613,334 of our net working capital at June 30, 2025. We intend to collect our outstanding receivables on a timely basis and reduce the overall level during 2025, which would help to provide positive cash flow to support our operations during 2025 and beyond. Inventory represents $2,466,106 of our net working capital at June 30, 2025. We are actively managing the level of inventory, and our goal is to reduce such level during 2025 by our sales activities, the decrease of which should provide additional cash flow to help support our operations during 2025 and beyond.
Showing the first 40 of 46 pairs. Open the source sections for the rest.
Rearranged current paragraphs (30)
Current report — wording carried from elsewhere
On May 22, 2025, the Company, acting pursuant to authority received at a special meeting of its stockholders on May 6, 2025, filed with the Secretary of State of the State of Nevada a certificate of amendment (the “May 22, 2025 Charter Amendment”) to its articles of incorporation, as amended, to effect a one (1)-for-one hundred (100) share reverse split (the “May 22, 2025 Reverse Stock Split”) of all of the Company’s outstanding shares of Common Stock, par value $0.001 per share. Pursuant to the May 22, 2025 Charter Amendment, the Reverse Stock Split became effective at 5:30 p.m. Eastern Time on May 22, 2025. As a result of the May 22, 2025 Reverse Stock Split, every one hundred (100) shares of Common Stock were exchanged for one (1) share of Common Stock. The Common Stock will begin trading on a split-adjusted basis on Nasdaq effective with the open of the market on Friday, May 23, 2025. The May 22, 2025 Reverse Stock Split did not affect the total number of shares of capital stock, including the Common Stock, that the Company is authorized to issue, which remain as set forth pursuant to the Articles of Incorporation. No fractional shares of Common Stock were issued in connection with the May 22, 2025 Reverse Stock Split. Stockholders who otherwise were entitled to receive fractional shares of Common Stock were automatically entitled to receive an additional fraction of a share of Common Stock to round up to the next whole share, at a participant level. The May 22, 2025 Reverse Stock Split also had a proportionate effect on all other options and warrants of the Company outstanding as of the effective date of the May 22, 2025 Reverse Stock Split. All historical share and per-share amounts reflected throughout the Company’s condensed consolidated financial statements and other financial information in this Report have been adjusted to reflect the May 22, 2025 Reverse Stock Split as if the split occurred as of the earliest period presented. The par value per share of the Company’s Common Stock was not affected by the May 22, 2025 Reverse Stock Split.
Current report — wording carried from elsewhere
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 report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
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 report — wording carried from 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.
Current report — wording carried from elsewhere
Summarized financial information for the Company’s reportable business segments is provided for the six months ended June 30, 2025, and 2024:
Current report — wording carried from elsewhere
The segment net revenues reported above represent sales to external customers. Segment gross profit represents net revenues less cost of revenues. Segment operating income, which is used in management’s evaluation of segment performance, represents net revenues, less cost of revenues, less all operating expenses. Identifiable assets are those assets used by each segment in its operations. Corporate assets primarily consist of cash, property, plant and equipment, accounts receivable, inventories, and other assets.
Current report — wording carried from elsewhere
Revenues by Type and by Operating Segment
Current report — wording carried from elsewhere
Our operating segments generate two types of revenue:
Current report — wording carried from elsewhere
Product revenuesprimarily include video solutions operating segment hardware sales of in-car and body-worn cameras. Additionally, product revenues also include the sale of tickets by our entertainment operating segment that have been purchased or received through our sponsorships and partnerships and held in inventory by our entertainment segment until their sale. Our entertainment sector also generates product revenue through our production of live events and concerts including our annual Country Stampede music festival.
Current report — wording carried from elsewhere
Service and other revenuesconsist of cloud and warranty services revenues from our subscription plan and storage offerings of our video solutions segment. Our entertainment operating segment’s secondary ticketing marketplace revenues are included in service revenue. We recognize service revenue from sales generated through its secondary ticketing marketplace as we collect net services fees on secondary ticketing marketplace transactions. Lastly, our revenue cycle management segment revenues are included in the service revenues for services provided to medical providers throughout the country.
Current report — wording carried from elsewhere
The following table presents revenues by type and segment:
Current report — wording carried from elsewhere
Our video solutions operating segment sells our products and services to customers in the following manner:
Current report — wording carried from elsewhere
Our revenue cycle management operating segment sells its services to customers in the following manner:
Current report — wording carried from elsewhere
Our entertainment operating segment sells our products and services to customers in the following manner:
Current report — wording carried from elsewhere
We may discount our prices on specific orders based upon the size of the order, the specific customer and the competitive landscape.
Current report — wording carried from elsewhere
Service and other revenues by operating segment is as follows:
Current report — wording carried from 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 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 report — wording carried from 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.
Current report — wording carried from elsewhere
***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.
Current report — wording carried from elsewhere
***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 report — wording carried from elsewhere
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 report — wording carried from elsewhere
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.
Current report — wording carried from elsewhere
Change in Fair Value of Derivative Liabilities
Current report — wording carried from elsewhere
We recorded an income tax benefit of $-0- for the six months ended June 30, 2025 and 2024, respectively. The effective tax rate for both 2025 and 2024 varied from the expected statutory rate due to our continuing to provide a 100% valuation allowance on net deferred tax assets. We determined that it was appropriate to continue the full valuation allowance on net deferred tax assets as of June 30, 2025 and December 31, 2024 primarily because of the recurring operating losses.
Current report — wording carried from elsewhere
We have further determined to continue providing a full valuation reserve on our net deferred tax assets as of June 30, 2025.
Current report — wording carried from elsewhere
We had approximately $156,019,000 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 report — wording carried from elsewhere
Net Income Attributable to Noncontrolling Interests of Consolidated Subsidiary
Current report — wording carried from elsewhere
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 $59,608 and $61,063 for the six months ended June 30, 2025 and 2024, respectively.
Current report — wording carried from elsewhere
Net Loss Attributable to Common Stockholders
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
Basic and Diluted Income/(Loss) per Share