v3.26.1
OPERATING SEGMENTS
 6 Months Ended
Jun. 30, 2026
Segment Reporting [Abstract]  
OPERATING SEGMENTS

NOTE 20. OPERATING SEGMENTS

 

The Company adopted ASU 2023-07 in 2024 and applied the amendment retrospectively to all periods presented in the Company’s condensed consolidated financial statements. Segment financial information is prepared in accordance with U.S. GAAP and the significant accounting policies described in Note 1. Resources are allocated and performance is assessed using segment operating income (loss) by the Company’s Chief Executive Officer, whom the Company has determined to be its Chief Operating Decision Maker (the “CODM”). The CODM utilizes segment operating income (loss) when making decisions about allocating capital and personnel to the segment, predominantly in the annual budget and quarterly forecasting processes. In addition, the CODM uses operating income (loss), including comparison of actual results to budget and forecast, in assessing performance and in evaluating product pricing, distribution strategies and marketing investments. The CODM reviews balance sheet information at a consolidated level; accordingly, segment asset information is not provided to or regularly reviewed by the CODM and is not presented. The Company computes segment operating income (loss) based on net revenues, less cost of revenues, less all operating expenses directly associated with the segment. The Company does not allocate non-operating income and expense, including interest or income taxes, to its operating segment.

 

 

Following the classification of the Video Solutions business as a discontinued operation, the Company has one reportable segment, Entertainment, which constitutes its continuing operations. The Entertainment segment includes the Company’s ticketing and live-event operations and generates both service and product revenues through its TicketSmarter platform and related entertainment brands, acting as an intermediary between ticket buyers and sellers and also purchasing ticket inventory from primary sources for resale through various channels.

 

The Company’s former Video Solutions segment and its former Revenue Cycle Management segment are each presented as discontinued operations in the accompanying condensed consolidated financial statements for all periods presented and are therefore excluded from the segment information presented herein. The Video Solutions business remained classified as held for sale as of June 30, 2026. The sale was completed on August 3, 2026, subsequent to the end of the reporting period. See Note 22, Discontinued Operations, for additional information.

 

The Company’s corporate administration activities are reported in the corporate line item. These activities primarily include expense related to certain corporate officers and support staff, certain accounting staff, expense related to the Company’s Board of Directors, stock-based compensation expense for awards granted to corporate administration employees, certain consulting expenses, investor relations activities, and a portion of the Company’s legal, auditing and professional fee expenses.

 

Geographic Information - The Company generates revenue solely from domestic customers within the United States. All of the Company’s long-lived assets are located within the United States. Accordingly, no geographic segment information is presented.

 

Summarized financial information for the Company’s reportable segment for the three and six months ended June 30, 2026 and 2025 is presented below. The historical results of the Video Solutions business and the Revenue Cycle Management business (Nobility Healthcare), which were previously reported as separate operating segments, have been classified as discontinued operations and are excluded from the segment information below for all periods presented.

 

   Entertainment   Corporate
and other		   Total 
   Three months ended June 30, 2026 
   Entertainment   Corporate
and other		   Total 
Net revenues:               
Product  $2,644,529   $—   $2,644,529 
Service   2,736,781    —    2,736,781 
Total segment net revenues   5,381,310    —    5,381,310 
Less significant segment expense               
Cost of Revenue - Product   3,988,277    —    3,988,277 
Cost of Revenue – Service and other   2,569,747    —    2,569,747 
Research and development expense   —    —    — 
Selling, advertising and promotional expense   370,170    —    370,170 
General and administrative expense   559,157    747,610    1,306,767 
                
Total segment operating income (loss)  $(2,106,041)  $(747,610)  $(2,853,651)
                
Non-operating (expenses) income:               
Interest income             55,481 
Interest expense             (28,648)
Change in fair value of derivative liabilities             (6)
Gain on the extinguishment of liabilities             — 
Loss on extinguishment of debt – related party             — 
Litigation settlement             (984,000)
Other non-operating income (loss)             20,492 
Total non-operating income (loss)             (936,681)
                
Income before income tax benefit (provision)            $(3,790,332)
                
Depreciation and amortization expense  $45,887   $—   $45,887 
                
Total identifiable assets, net of
eliminations		  $3,420,481   $14,128,931   $17,549,412 

 

 

   Entertainment  

Corporate

and other

   Total 
   Three months ended June 30, 2025 
   Entertainment  

Corporate

and other

   Total 
Net revenues:               
Product  $1,740,828   $—   $1,740,828 
Service   1,118,245    —    1,118,245 
Total segment net revenues   2,859,073    —    2,859,073 
Less significant segment expense               
Cost of Revenue - Product   3,317,407    —    3,317,407 
Cost of Revenue – Service and other   1,094,131    —    1,094,131 
Research and development expense   —    —    — 
Selling, advertising and promotional expense   95,629    —    95,629 
General and administrative expense   919,792    1,193,415    2,113,207 
                
Total segment operating income (loss)  $(2,567,886)  $(1,193,415)  $(3,761,301)
                
Non-operating (expenses) income:               
Interest income             45,946 
Interest expense             (77,280)
Change in fair value of derivative liabilities             857,189 
Gain on the extinguishment of liabilities             10,619 
Loss on extinguishment of debt – related party             (1,249,372)
Other non-operating income (loss)             18,767 
Total non-operating income (loss)             (394,131)
                
Income before income tax benefit (provision)            $(4,155,432)
                
Depreciation and amortization expense  $387,579   $—   $387,579 
                
Total identifiable assets, net of
eliminations		  $4,952,085   $21,011,578   $25,963,663 

 

   Entertainment  

Corporate

and other

   Total 
   Six months ended June 30, 2026 
   Entertainment  

Corporate

and other

   Total 
Net revenues:               
Product  $2,980,635   $—   $2,980,635 
Service   5,606,432    —    5,606,432 
Total segment net revenues   8,587,067    —    8,587,067 
Less significant segment expense               
Cost of Revenue - Product   4,368,645    —    4,368,645 
Cost of Revenue – Service and other   5,176,619    —    5,176,619 
Research and development expense   —    —    — 
Selling, advertising and promotional expense   513,545    —    513,545 
General and administrative expense   1,033,337    1,380,798    2,414,135 
                
Total segment operating income (loss)  $(2,505,079)  $(1,380,798)  $(3,885,877)
                
Non-operating (expenses) income:               
Interest income             132,287 
Interest expense             (96,098)
Change in fair value of derivative liabilities             (289,361)
Gain on the extinguishment of liabilities             63,259 
Loss on extinguishment of debt – related party             — 
Litigation settlement             (984,000)
Other non-operating income (loss)             20,492 
Total non-operating income (loss)             (1,153,421)
                
Income before income tax benefit (provision)            $(5,039,298)
                
Depreciation and amortization expense  $81,532   $—   $81,532 
                
Total identifiable assets, net of
eliminations		  $3,420,481   $14,128,931   $17,549,412 

 

 

   Entertainment  

Corporate

and other

   Total 
   Six months ended June 30, 2025 
   Entertainment  

Corporate

and other

   Total 
Net revenues:               
Product  $2,445,416   $—   $2,445,416 
Service   2,616,088    —    2,616,088 
Total segment net revenues   5,061,504    —    5,061,504 
Less significant segment expense               
Cost of Revenue - Product   3,928,494    —    3,928,494 
Cost of Revenue – Service and other   2,107,401    —    2,107,401 
Research and development expense   —    —    — 
Selling, advertising and promotional expense   171,492    —    171,492 
General and administrative expense   1,726,582    1,782,703    3,509,285 
                
Total segment operating income (loss)  $(2,872,465)  $(1,782,703)  $(4,655,168)
                
Non-operating (expenses) income:               
Interest income             77,921 
Interest expense             (869,553)
Change in fair value of derivative liabilities             3,373,080 
Gain on the extinguishment of liabilities             2,230,716 
Loss on extinguishment of debt – related party             — 
Other non-operating income (loss)             35,467 
Total non-operating income (loss)             4,847,631 
                
Income before income tax benefit (provision)            $192,463 
                
Depreciation and amortization expense  $728,176   $—   $728,176 
                
Total identifiable assets, net of
eliminations		  $4,952,085   $21,011,578   $25,963,663 

 

Total identifiable assets as of June 30, 2025 included amounts related to the discontinued Video Solutions and Revenue Cycle Management (Nobility Healthcare) operations, which were included in the “Corporate and other” category. Following the disposition of Nobility Healthcare on January 8, 2026 and the classification of the Video Solutions business as held for sale, the assets of these discontinued operations are presented as assets held for sale and are excluded from segment identifiable assets as of June 30, 2026. See Note 22, Discontinued Operations, for additional information.

 

The Company records non-cash items affecting gross profit and operating income (loss) through the establishment of inventory reserves based on estimates of excess and/or obsolete current and non-current inventory. The Company recorded a reserve for excess and obsolete inventory in the Entertainment segment of $72,203 and $69,817 as of June 30, 2026 and December 31, 2025, respectively. During the three months ended June 30, 2026, the Company changed the method used to estimate the reserve; see Note 5, Inventories. The inventory reserve related to the Video Solutions business, of $2,172,575 and $1,849,124 as of June 30, 2026 and December 31, 2025, respectively, is included within assets held for sale and is excluded from segment information.

 

The segment net revenues reported above represent sales to external customers. Segment gross profit (loss) represents net revenues less cost of revenues. Segment operating income (loss), which is used in management’s evaluation of segment performance, represents net revenues less cost of revenues less all operating expenses.