What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-08-15 compared with 2022-05-20 · 721 added, 729 removed, 1020 unchanged (59% of the section changed)

2 unchanged sentences

30, 2022 AND DECEMBER 31, 2021

March 31, 2022 (Unaudited)

June 30, 2022

Current assets:

1 unchanged sentence

Accounts receivable – trade, net

Other receivables (including $ 158,384 due from related parties – March 31, 2022 and $ 158,384 – December 31, 2021, refer to Note 19)

Other receivables (including $ 138,384 due from related parties – June 30, 2022 and $ 158,384 – December 31, 2021, refer to Note 20)

Inventories, net

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shares issued:

49,728,357 shares issued – March 31, 2022 and 50,904,391 shares issued – December 31, 2021

47,828,405 shares issued – June 30, 2022 and 50,904,391 shares issued – December 31, 2021

Additional paid in capital

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CONSOLIDATED STATEMENTS OF OPERATIONS

THE THREE MONTHS ENDED

THE THREE AND SIX MONTHS ENDED

30, 2022 AND 2021

Three months ended

Three months ended June 30,

Six months ended June 30,

Service and other

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( 2,616,884 )

( 13,464,590 )

( 5,482,578 )

Other income (expense):

1 unchanged sentence

Interest expense

Other income (loss)

Gain on extinguishment of debt

Change in fair value of contingent consideration promissory notes

1 unchanged sentence

Change in fair value of warrant derivative liabilities

Total other income

( 2,863,422 )

Total other income (expense)

( 2,765,603 )

Income (loss) before income tax benefit

( 5,382,487 )

( 7,380,430 )

Income tax benefit

1 unchanged sentence

( 5,382,487 )

Net loss attributable to noncontrolling interests of consolidated subsidiary

( 7,380,430 )

Net income attributable to noncontrolling interests of consolidated subsidiary

Net income (loss) attributable to common stockholders

$ ( 1,065,513 )

Net income (loss) per share information:

$ ( 5,382,487 )

$ ( 7,665,662 )

Net loss per share information:

Weighted average shares outstanding:

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

THE THREE MONTHS ENDED MARCH 31, 2022 AND 2021

Noncontrolling

interest in consolidated

THE THREE AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021

Additional Paid In

Noncontrolling interest in consolidated

Balance, December 31, 2020

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Restricted common stock forfeitures

Issuance of common stock through

registered direct offering at $ 3.095 per share and accompanying warrants (net of offering expenses and placement agent discount)

Issuance of common stock through

registered direct offering at $ 2.80 per share and accompanying warrants (net of offering expenses and placement agent discount)

Exercise of pre-funded common

stock purchase warrants at $ 3.095 per share

Exercise of pre-funded common

stock purchase warrants at $ 2.80 per share

Issuance of pre-funded common

stock purchase warrants in connection with the registered direct offerings

Issuance of common stock through registered direct offering at $ 3.095 per share and accompanying warrants (net of offering expenses and placement agent discount)

Issuance of common stock through registered direct offering at $ 2.80 per share and accompanying warrants (net of offering expenses and placement agent discount)

Exercise of pre-funded common stock purchase warrants at $ 3.095 per share

Exercise of pre-funded common stock purchase warrants at $ 2.80 per share

Issuance of pre-funded common stock purchase warrants in connection with the registered direct offerings

( 1,817,548 )

Issuance of common stock purchase

warrants at exercise price of $ 3.25 per share in connection with the registered direct offerings

Issuance of common stock purchase warrants at exercise price of $ 3.25 per share in connection with the registered direct offerings

( 49,398,510 )

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( 68,292,642 )

Stock-based compensation

( 5,382,487 )

Balance, June 30, 2021

$ 122,487,573

$ ( 2,157,226 )

$ ( 73,675,129 )

Balance, December 31, 2021

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Restricted common stock forfeitures

Repurchase and cancellation

of common stock

Repurchase and cancellation of common stock

( 1,876,034 )

1 unchanged sentence

( 2,063,768 )

to noncontrolling interest in consolidated subsidiary

Distribution to noncontrolling interest in consolidated subsidiary

( 6,600,148 )

2 unchanged sentences

( 77,332,537 )

Stock-based compensation

Restricted common stock forfeitures

Repurchase and cancellation of common stock

( 1,849,952 )

( 1,960,905 )

( 1,962,755 )

Net income (loss)

( 1,065,513 )

Balance, June 30, 2022

$ 125,202,080

$ ( 80,358,955 )

Notes to the Unaudited Condensed Consolidated Financial Statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

MONTHS ENDED MARCH 31, 2022 AND 2021

Three months ended

THE SIX MONTHS ENDED JUNE 30, 2022 AND 2021

Six months ended June 30,

Cash Flows From Operating Activities:

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( 5,561,789 )

( 21,688,835 )

Provision for inventory obsolescence

Provision for doubtful accounts receivable

Gain on extinguishment of debt

Change in fair value of contingent consideration promissory note

Change in operating assets and liabilities (net of assets and liabilities acquired):

Change in operating assets and liabilities:

(Increase) decrease in:

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Accrued expenses

Operating lease obligations

Income taxes payable

Operating lease obligations

Contract liabilities

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Cash Flows from Investing Activities:

Purchases of furniture, fixtures and equipment

Purchases of property, plant and equipment

( 1,923,501 )

( 5,452,729 )

Additions to intangible assets

Cash paid for acquisition, net of cash acquired

Cash paid for acquisition of Medical Billing Company

( 1,153,627 )

Cash paid for asset acquisition from Medical

Billing Company

Cash paid for asset acquisition of Medical Billing Company

Net cash used in investing activities

( 3,361,994 )

( 6,506,407 )

Cash Flows from Financing Activities:

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( 4,026,523 )

Distribution to

noncontrolling interest in consolidated subsidiary

Distribution to noncontrolling interest in consolidated subsidiary

Net proceeds from sale of common stock in registered direct offerings

Proceeds from issuance of common stock upon exercise of pre-funded warrants

Principal payment on contingent consideration promissory

Net cash provided by (used in) financing activities

Principal payment on contingent consideration promissory notes

Net cash (used in) provided by financing activities

( 4,259,037 )

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Supplemental disclosures of non-cash investing and financing activities:

Restricted common stock grant

Restricted common stock forfeitures

Amounts allocated to initial measurement of warrant derivative liabilities in connection to the warrants and pre-funded warrants

Issuance of contingent consideration promissory note for

business and asset acquisitions

Issuance of contingent consideration promissory note for business acquired

Assets acquired in business acquisitions

Liabilities assumed in the business acquisition

Goodwill acquired in business acquisitions

Liabilities assumed in business acquisitions

Restricted common stock grant

Restricted common stock forfeitures

Amounts allocated to initial measurement of warrant derivative liabilities in connection with the warrants and pre-funded warrants

Notes to the Unaudited Condensed Consolidated Financial Statements.

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(with its wholly-owned subsidiaries, Digital Ally International, Inc., Shield Products, LLC, Digital Ally

Healthcare, LLC, TicketSmarter, Inc., Worldwide Reinsurance, Ltd., Digital Connect, Inc., and its majority-owned subsidiary Nobility

Healthcare, LLC, collectively, “Digital Ally,” “Digital,” and the “Company”) is divided into three

reportable operating segments:

1) the Video Solutions Segment, 2) the Revenue Cycle Management Segment and 3) the Ticketing Segment.

The Video Solutions Segment is our legacy business that produces digital video imaging, storage products, disinfectant and related safety

products for use in law enforcement, security and commercial applications.

This segment includes both service and product revenues through

our subscription models offering cloud and warranty solutions, and hardware sales for video and health safety solutions.

Cycle Management Segment provides working capital and back-office services to a variety of healthcare organizations throughout the country,

as a monthly service fee.

Healthcare, LLC, TicketSmarter, Inc., Worldwide Reinsurance, Ltd., Digital Connect, Inc., Kustom 440, Inc., and its majority-owned subsidiary

Nobility Healthcare, LLC, collectively, “Digital Ally,” “Digital,” and the “Company”) is divided

into three reportable operating segments:

1) the Video Solutions Segment, 2) the Revenue Cycle Management Segment and 3) the Ticketing

The Video Solutions Segment is our legacy business that produces digital video imaging, storage products, disinfectant and related

safety products for use in law enforcement, security and commercial applications.

This segment includes both service and product revenues

through our subscription models offering cloud and warranty solutions, and hardware sales for video and health safety solutions.

Revenue Cycle Management Segment provides working capital and back-office services to a variety of healthcare organizations throughout

the country, as a monthly service fee.

The Ticketing Segment acts as an intermediary between ticket buyers and sellers within our secondary

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a fair presentation have been included.

Operating results for the three-month period ended March 31, 2022 are not necessarily indicative

of the results that may be expected for the year ending December 31, 2022.

Operating results for the three and six month periods ended June 30, 2022 are not necessarily

indicative of the results that may be expected for the year ending December 31, 2022.

balance sheet at December 31, 2021 has been derived from the audited financial statements at that date, but does not include all the

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for the year ended December 31, 2021.

COVID-19 pandemic represents a fluid situation that presents a wide range of potential impacts of varying durations for different global

geographies, including locations where the Company has offices, employees, customers, vendors and other suppliers and business partners.

most US-based businesses, the COVID-19 pandemic and efforts to mitigate the same began to have impacts on our business in March 2020.

Since that time, the COVID-19 pandemic has dramatically impacted the global health and economic environment, including millions of confirmed

cases, business slowdowns or shutdowns, labor shortages, supply chain challenges, changes in government spending and requirements, regulatory

challenges, inflationary pressures and market volatility.

operate within the complex integrated global supply chain for both vendors and customers.

As the COVID-19 pandemic dissipates at varying

times and rates in different regions around the world, there could be a prolonged negative impact on these global supply chains.

ability to continue operations at specific facilities will be impacted by the interdependencies of the various participants of these

global supply chains, which are largely beyond our direct control.

A prolonged shut down of these global supply chains could have a material

adverse effect on our business, results of operations, cash flows and financial condition.

pandemic/Supply Chain:

pandemic continues to represent an evolving and fluid situation that presents a wide range of potential impacts of varying durations for

different global geographies, including locations where the Company has offices, employees, customers, vendors and other suppliers and

business partners.

Like most U.S.-based businesses, the COVID-19 pandemic and efforts to mitigate

the same began to have impacts on our business in March 2020.

Since that time, although the original effect of the COVID-19 pandemic has

eased, we have continued to operate in an uncertain economic environment that is characterized by, business slowdowns or shutdowns, labor

shortages, supply chain challenges, changes in government spending and requirements, regulatory challenges, inflationary pressures and

market volatility.

We continue to experience operational

challenges as a result of worldwide events including the Russia-Ukraine conflict, continued uncertainty associated with the pandemic,

and volatility in global markets, which are compounded by the complex integrated global supply chain for both vendors and customers.

the COVID-19 pandemic dissipates at varying times and rates in different regions around the world, there could be a prolonged negative

impact on these global supply chains.

Our ability to continue operations at specific facilities will be impacted by the interdependencies

of the various participants of these global supply chains, which are largely beyond our direct control.

A prolonged shut down of these

global supply chains could have a material adverse effect on our business, results of operations, cash flows and financial condition.

our suppliers have increased challenges with their workforce (including as a result of illness, absenteeism, reactions to health and

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To date, we eased many of these modifications.

However, we may, in the future, reinstitute the same or similar changes or take further actions as may be required by government

authorities or that we determine are in the best interests of our employees, customers, partners, vendors, and suppliers.

managed to continue most of our operations, the future course of the COVID-19 pandemic is uncertain and we cannot assure that this global

pandemic, including its economic impact, will not have a material adverse impact on our business, financial position, results of operations

and/or cash flows.

we may, in the future, reinstitute the same or similar changes or take further actions as may be required by government authorities or

that we determine are in the best interests of our employees, customers, partners, vendors, and suppliers.

Although we managed to continue

most of our operations, the future course of the COVID-19 pandemic is uncertain and we cannot assure that this global pandemic, including

its economic impact, will not have a material adverse impact on our business, financial position, results of operations and/or cash flows.

of Consolidation:

accompanying financial statements include the consolidated accounts of Digital Ally, its wholly-owned subsidiaries, Digital Ally International,

Inc., Shield Products, LLC, Digital Ally Healthcare, LLC, TicketSmarter, Inc., Worldwide Reinsurance, Ltd., Digital Connect, Inc.,

and its majority-owned subsidiary Nobility Healthcare, LLC.

All intercompany balances and transactions have been eliminated during consolidation.

Inc., Shield Products, LLC, Digital Ally Healthcare, LLC, TicketSmarter, Inc., Worldwide Reinsurance, Ltd., Digital Connect, Inc., Kustom

440, Inc., and its majority-owned subsidiary Nobility Healthcare, LLC.

All intercompany balances and transactions have been eliminated

during consolidation.

Company formed Digital Ally International, Inc.

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upon its acquisition of Goody Tickets, LLC and TicketSmarter, LLC, to facilitate its global ticketing operations.

formed Worldwide Reinsurance Ltd., which is a captive insurance company domiciled in Bermuda.

It will provide

primarily liability insurance coverage to the Company for which insurance may not be currently available or economically feasible in

today’s insurance marketplace.

The Company formed

Worldwide Reinsurance Ltd., which is a captive insurance company domiciled in Bermuda.

It will provide primarily liability insurance

coverage to the Company for which insurance may not be currently available or economically feasible in today’s insurance marketplace.

The Company formed Digital Connect, Inc.

for travel and transportation purposes in 2022.

The company formed Kustom 440, Inc.

to create unique entertainment experiences directly for consumers.

Value of Financial Instruments:

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notes payable approximate fair value because of the short-term nature of these items.

Recognition :

Company applies the provisions of Accounting Standards Codification (ASC) 606-10, Revenue from Contracts with Customers , and all

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on a gross basis, other than service revenues from the Company’s ticketing and revenue cycle management segments.

generated by all segments are reported net of sales taxes.

Company considers customer purchase orders, which in some cases are governed by master sales agreements, to be the contracts with the

In situation where sales are to a distributor, the Company had concluded its contracts are with the distributor as the Company

holds a contract bearing enforceable rights and obligations only with the distributor.

As part of part of its consideration for the contract,

the Company evaluates certain factors including the customers’ ability to pay (or credit risk).

For each contract, the Company

considers the promise to transfer products, each of which is distinct, to be the identified performance obligations.

In determining the

transaction price, the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which

it expects to be entitled.

As the Company’s standard payment terms are less than one year, it has elected the practical expedient

under ASC 606-10-32-18 to not assess whether a contract has a significant financing component.

The Company allocates the transaction

price to each distinct product based on its relative standalone selling price.

The product price as specified on the purchase order is

considered the standalone selling price as it is an observable input which depicts the price as if sold to a similar customer in similar

circumstances.

Revenue is recognized when control of the product is transferred to the customer (i.e.

when the Company’s performance

obligations is satisfied), which typically occurs at shipment.

Further in determining whether control has been transferred, the Company

considers if there is a present right to payment and legal title, along with risks and rewards of ownership having transferred to the

Customers do not have a right to return the product other than for warranty reasons for which they would only receive repair

services or replacement product.

The Company has also elected the practical expedient under ASC 340-40-25-4 to expense commissions for

product sales when incurred as the amortization period of the commission asset the Company would have otherwise recognized is less than

Revenues generated

by all segments are reported net of sales taxes.

The Company considers customer

purchase orders, which in some cases are governed by master sales agreements, to be the contracts with the customer.

In situations where

sales are to a distributor, the Company had concluded its contracts are with the distributor as the Company holds a contract bearing enforceable

rights and obligations only with the distributor.

As part of its consideration for the contract, the Company evaluates certain factors

including the customers’ ability to pay (or credit risk).

For each contract, the Company considers the promise to transfer products,

each of which is distinct, to be the identified performance obligations.

In determining the transaction price, the Company evaluates whether

the price is subject to refund or adjustment to determine the net consideration to which it expects to be entitled.

As the Company’s

standard payment terms are less than one year, it has elected the practical expedient under ASC 606-10-32-18 to not assess whether a contract

has a significant financing component.

The Company allocates the transaction price to each distinct product based on its relative standalone

selling price.

The product price as specified on the purchase order is considered the standalone selling price as it is an observable

input which depicts the price as if sold to a similar customer in similar circumstances.

Revenue is recognized when control of the product

is transferred to the customer (i.e., when the Company’s performance obligations are satisfied), which typically occurs at shipment.

Further in determining whether control has been transferred, the Company considers if there is a present right to payment and legal title,

along with risks and rewards of ownership having transferred to the customer.

Customers do not have a right to return the product other

than for warranty reasons for which they would only receive repair services or replacement product.

The Company has also elected the practical

expedient under ASC 340-40-25-4 to expense commissions for product sales when incurred as the amortization period of the commission asset

the Company would have otherwise recognized is less than one year.

and other revenue is comprised of revenues from extended warranties, repair services, cloud revenue and software revenue.

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Cycle Management

Company reports revenue cycle management revenues on a net basis, as its primary source of revenue is its end-to end service fees which

is generally determined as a percentage of the invoice amounts collected.

These service fees are reported as revenue monthly upon completion

of the Company’s performance obligation to provide the agreed upon service.

The Company reports revenue cycle

management revenues on a net basis, as its primary source of revenue is its end-to-end service fees which are generally determined as

a percentage of the invoice amounts collected.

These service fees are reported as revenue monthly upon completion of the Company’s

performance obligation to provide the agreed upon service.

Company reports ticketing revenue on a gross or net basis based on management’s assessment of whether the Company is acting as

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net of the amount due to the seller when an order is confirmed.

The seller is then obligated to deliver the tickets to the buyer

per the seller’s listing, and payment is due at the time of sale.

The seller is then obligated to deliver the tickets to the buyer per

the seller’s listing, and payment is due at the time of sale.

liabilities consist of deferred revenue and include payments received in advance of performance under the contract and are reported separately

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prepaid cloud services and prepaid installation services and are generally recognized as the respective performance obligations are satisfied.

During the three months ended March 31, 2022, the Company recognized revenue of $ 0.5 million related to its contract liabilities.

During the three months ended June 30, 2022, the Company recognized revenue of $ 0.4 million related to its contract liabilities.

liabilities consist of deferred revenue and include payments received in advance of performance under the contract and are reported separately

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SCHEDULE OF CONTRACT LIABILITIES

March 31, 2022

December 31, 2021

Additions/Reclass

Recognized Revenue

June 30, 2022

Contract liabilities, current

Contract liabilities, non-current

returns and allowances aggregated $ 117,376 and $ 45,298 for the years ended March 31, 2022 and December 31, 2021, respectively.

for estimated sales returns and allowances are recognized at the time of sales on an accrual basis.

The accrual is determined based upon

historical return rates adjusted for known changes in key variables affecting these return rates.

returns and allowances aggregated $ 117,552 and $ 45,298 for the six months ended June 30, 2022 and year ended December 31, 2021, respectively.

Obligations for estimated sales returns and allowances are recognized at the time of sales on an accrual basis.

The accrual is determined

based upon historical return rates adjusted for known changes in key variables affecting these return rates.

of Estimates:

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limited to, determining the estimated lives of long-lived assets, determining the potential impairment of long-lived assets, the fair

value of warrants, options, the recognition of revenue, inventory valuation reserve,

fair value of assets and liabilities acquired in a business combination, incremental borrowing rate on leases, the valuation allowance

for deferred tax assets and other legal claims and contingencies.

The results of any changes in accounting estimates are reflected in

the financial statements in the period in which the changes become evident.

Estimates and assumptions are reviewed periodically, and

the effects of revisions are reflected in the period that they are determined to be necessary.

value of warrants, options, the recognition of revenue, inventory valuation reserve, fair value of assets and liabilities acquired in

a business combination, incremental borrowing rate on leases, the valuation allowance for deferred tax assets and other legal claims

and contingencies.

The results of any changes in accounting estimates are reflected in the financial statements in the period in which

the changes become evident.

Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period

that they are determined to be necessary.

and cash equivalents:

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OF SHORT TERM INVESTMENTS

March 31, 2022

June 30, 2022

Adjusted Cost

Realized Gains

Realized Losses

Demand deposits

Short-term investments

with original maturities of 90 days or less (Level 1) (1) :

Short-term investments with

original maturities of 90 days or less (Level 1):

Money market funds

December 31, 2021

Adjusted Cost

Unrealized Gains

Unrealized Losses

Demand deposits

Short-term investments

with original maturities of 90 days or less (Level 1) (1) :

Short-term investments with

original maturities of 90 days or less (Level 1):

Money market funds

Company maintains its cash and cash equivalents in banks insured by the Federal Deposit Insurance Corporation (FDIC) in accounts that

at times may be in excess of the federally insured limit of $ 250,000

The Company minimizes this risk by

placing its cash deposits with major financial institutions.

At March 31, 2022 and December 31, 2021, the uninsured balance amounted

to $ 18,438,051 and

$ 29,836,142 ,

at times may be in excess of the federally insured limit of $ 250,000 per bank.

The Company minimizes this risk by placing its cash deposits

with major financial institutions.

At June 30, 2022 and December 31, 2021, the uninsured balance amounted to $ 11,682,011 and $ 29,836,142 ,

respectively.

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if fair value is not available.

The Company last assessed potential impairments of its long-lived assets as of March 31,

2022 and concluded that there was no impairment.

The Company last assessed potential impairments of its long-lived assets as of June 30, 2022 and concluded

that there was no impairment.

assets include deferred patent costs and license agreements.

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maker (the Company’s Chief Executive Officer or “CODM”) in making decisions on how to allocate resources and assess

The Company’s three

operating segments are Video Solutions, Revenue

Cycle Management, and Ticketing, each of which has specific personnel responsible for that business and reports to the CODM.

expenses capture the Company’s corporate administrative activities, and is also to be reported in the segment information.

The Company’s captive insurance subsidiary provides services to the Company’s other business segments and not to outside

however, that subsidiary had no activity in the three months ended March 31, 2022 and 2021.

its operations will be eliminated in consolidation and it is not considered a separate business segment for financial reporting

The Company’s three operating segments are Video Solutions, Revenue Cycle Management, and Ticketing, each of which

has specific personnel responsible for that business and reports to the CODM.

Corporate expenses capture the Company’s corporate

administrative activities and are also to be reported in the segment information.

The Company’s captive insurance subsidiary provides

services to the Company’s other business segments and not to outside customers;

however, that subsidiary had no activity in the

three months ended June 30, 2022 and 2021.

Therefore, its operations will be eliminated in consolidation, and it is not considered a separate

business segment for financial reporting purposes.

Consideration

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Non-Controlling

Non-controlling interests in

the Company’s Consolidated Financial Statements represents the interest in subsidiaries held by our venture partner.

venture partner holds a noncontrolling interests in the Company’s consolidated subsidiary Nobility Healthcare, LLC.

the Company consolidates the financial statements of all wholly-owned and majority owned subsidiaries, the noncontrolling owners’

share of each subsidiary’s results of operations are deducted and reported as net income or loss attributable to noncontrolling

interest in the Consolidated Statements of Operations.

Non-controlling

interests in the Company’s Consolidated Financial Statements represents the interest in subsidiaries held by our venture partner.

The venture partner holds a noncontrolling interests in the Company’s consolidated subsidiary Nobility Healthcare, LLC.

Company consolidates the financial statements of all wholly-owned and majority owned subsidiaries, the noncontrolling owners’ share

of each subsidiary’s results of operations are deducted and reported as net income or loss attributable to noncontrolling interest

in the Consolidated Statements of Operations.

Accounting Standards

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by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods within those fiscal

The Company will continue to evaluate the effect

of adopting ASU 2016-13 will have on the Company’s consolidated financial statements.

The Company will continue to evaluate the effect of adopting ASU 2016-13 will have on the Company’s consolidated financial

August 2018, the FASB issued ASU No.

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early adoption permitted.

The adoption of this standard did not have a significant impact on the Company’s financial position

and results of operations,

The adoption of this standard did not have a significant impact on the Company’s financial position and

results of operations,

December 2019, the FASB issued ASU No.

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to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740, Income Taxes.

amendment also improves consistent application and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance.

The amendments in ASU 2019-12 are effective for public business entities

for fiscal years beginning after Dec.

amendment also improves consistent application and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance.

The amendments in ASU 2019-12 are effective for public business entities for

fiscal years beginning after Dec.

The adoption of this standard did not have a significant impact on the Company’s

financial position and results of operations.

consisted of the following at March 31, 2022 and December 31, 2021:

consisted of the following at June 30, 2022 and December 31, 2021:

SCHEDULE OF INVENTORIES

June 30, 2022

December 31, 2021

Raw material and component parts– video solutions segment

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The cost of such units

totaled $ 179,273 and $ 153,976 as of March 31, 2022 and December 31, 2021, respectively.

totaled $ 135,573 and $ 153,976 as of June 30, 2022 and December 31, 2021, respectively.

DEBT OBLIGATIONS

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OF DEBT OBLIGATIONS

June 30, 2022

December 31, 2021

Economic injury disaster loan (EIDL)

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Debt obligations, long-term

obligations mature as follows as of March 31, 2022:

obligations mature as follows as of June 30, 2022:

SCHEDULE OF MATURITY OF DEBT OBLIGATIONS

March 31, 2022

2022 (April 1, 2022 to December 31, 2022)

2022 (July 1, 2022 to December 31,

2027 and thereafter

Small Business Administration Notes .

May 4, 2020, the Company issued a promissory note in connection with the receipt of the Paycheck Protection Program

(“PPP”) Loan of $ 1,418,900 (the

“PPP Loan”) under the Small Business Administration’s (the “SBA”) PPP Program under the Coronavirus

Aid, Relief, and Economic Security Act (the “CARES Act”).

The PPP Loan has a two-year term and bears interest at a rate

Monthly principal and interest payments were deferred for nine months after the date of disbursement and total $ 79,851 per

month thereafter.

May 4, 2020, the Company issued a promissory note in connection with the receipt of the Paycheck Protection Program (“PPP”)

Loan of $ 1,418,900 (the “PPP Loan”) under the Small Business Administration’s (the “SBA”) PPP Program under

the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

The PPP Loan had a two -year term and bore interest

at a rate of 1.0 % per annum.

Monthly principal and interest payments were deferred for nine months after the date of disbursement and

total $ 79,851 per month thereafter.

The PPP Loan could have been prepaid at any time prior to maturity with no prepayment penalties.

The promissory

note contained events of default and other provisions customary for a loan of this type.

The PPP Loan provides that it

The promissory note contained events of default and other provisions customary for a loan of this type.

The PPP Loan provided that it

may be partially or wholly forgiven if the funds are used for certain qualifying expenses as described in the CARES Act.

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On December 10, 2020, the Company was fully forgiven of its $ 1,418,900

$ 1,418,900 PPP

Additionally, the Company was fully forgiven, during the three months ended June 30, 2021, of its $ 10,000 EIDL

advance received with the PPP Loan.

Additionally, the Company was fully forgiven, during the three months ended June 30, 2021, of its $ 10,000 EIDL advance received

with the PPP Loan.

May 12, 2020, the Company received $ 150,000 in loan funding from the SBA under the EIDL program administered by the SBA, which program

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original principal amount of $ 150,000 with the SBA, the lender.

the terms of the note issued under the EIDL program, interest accrues on the outstanding principal at the rate of 3.75 %

The term of such note is thirty years, though it may be payable sooner upon an event of default under such note.

Monthly principal

and interest payments are deferred for twenty-four months after the date of disbursement and total $ 731

per month thereafter.

the terms of the note issued under the EIDL program, interest accrues on the outstanding principal at the rate of 3.75 % per annum.

term of such note is thirty years, though it may be payable sooner upon an event of default under such note.

Monthly principal and interest

payments are deferred for twenty-four months after the date of disbursement and total $ 731 per month thereafter.

Such note may be prepaid

6 unchanged sentences

of $ 350,000 .

The June Contingent Note has a three -year

term and bears interest at a rate of 3.00 %

Quarterly principal and interest payments are deferred for six months and is due in equal quarterly installments on the seventh

business day of each quarter.

The principal amount of the June Contingent Note is subject to an earn-out adjustment, being the difference

between $ 975,000

(the “June Projected Revenue”) and

the cash basis revenue (the “June Measurement Period Revenue”) collected by the June Seller in its normal course of business

from the clients existing on June 30, 2021, during the period from October 1, 2021 through September 30, 2022 (the “June Measurement

Period”) measured on a quarterly basis and annualized as of the relevant period.

If the June Measurement Period Revenue is less

than the June Projected Revenue, such amount will be subtracted from the principal balance of this June Contingent Note on a dollar-for-dollar

If the June Measurement Period Revenue is more than the June Projected Revenue, such amount will be added to the principal balance

of this June Contingent Note on a dollar-for-dollar basis.

In no event will the principal balance of this June Contingent Note become

a negative number.

The maximum downward earn-out adjustment to the principal balance will be a reduction to zero.

limits to the increases to the principal balance of the June Contingent Note as a result of the earn-out adjustments.

The June Contingent Note has a three -year term and bears interest at a rate of 3.00 % per annum.

Quarterly principal and

interest payments are deferred for six months and are due in equal quarterly installments on the seventh business day of each quarter.

The principal amount of the June Contingent Note is subject to an earn-out adjustment, being the difference between $ 975,000 (the “June

Projected Revenue”) and the cash basis revenue (the “June Measurement Period Revenue”) collected by the June Seller

in its normal course of business from the clients existing on June 30, 2021, during the period from October 1, 2021 through September

30, 2022 (the “June Measurement Period”) measured on a quarterly basis and annualized as of the relevant period.

Measurement Period Revenue is less than the June Projected Revenue, such amount will be subtracted from the principal balance of this

June Contingent Note on a dollar-for-dollar basis.

If the June Measurement Period Revenue is more than the June Projected Revenue, such

amount will be added to the principal balance of this June Contingent Note on a dollar-for-dollar basis.

In no event will the principal

balance of this June Contingent Note become a negative number.

The maximum downward earn-out adjustment to the principal balance will

be a reduction to zero.

There are no limits to the increases to the principal balance of the June Contingent Note as a result of the

earn-out adjustments.

June Contingent Note is considered to be additional purchase price;

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Management recorded the contingent

consideration promissory note at its estimated fair value of $ 350,000

at the acquisition date.

Total principal payments

on this contingent consideration promissory note totaled $ 31,721

during the three months ended March 31, 2022.

consideration promissory note at its estimated fair value of $ 350,000 at the acquisition date.

Total principal payments, since its inception, on this contingent

consideration promissory note totaled $ 57,724 .

The estimated fair value of the June Contingent

Note at March 31, 2022 is $ 234,027 ,

representing a reduction in its estimated

fair value of $ 51,464

as compared to its estimated fair value as of December 31, 2021.

Therefore, the Company recorded a gain of

in the Consolidated Statements of Operations for

the three months ended March 31, 2022.

Note at June 30, 2022 is $ 211,868 , representing an increase in its estimated fair value of $ 3,844 as compared to its estimated fair

value as of March 31, 2022.

Therefore, the Company recorded a loss of $ 3,844 in the Consolidated Statements of Operations for the

three months ended June 30, 2022.

The Company recorded a gain of $ 47,620 in the Consolidated Statements of Operations for the six months ended June

August 31, 2021, Nobility Healthcare issued another contingent consideration promissory note (the “August Contingent Payment Note”)

in connection with a stock purchase agreement between Nobility Healthcare and a private company (the “August Sellers”) of

The August Contingent Payment Note has a three -year

term and bears interest at a rate of 3.00 %

Quarterly principal and interest payments are deferred for six months and is due in equal quarterly installments on the seventh

business day of each quarter.

The principal amount of the August Contingent Payment Note is subject to an earn-out adjustment, being

the difference between $ 3,000,000

(the “August Projected Revenue”)

and the cash basis revenue (the “August Measurement Period Revenue”) collected by the August Sellers in its normal course

of business from the clients existing on September 1, 2021, during the period from December 1, 2021 through November 30, 2022 (the “August

Measurement Period”) measured on a quarterly basis and annualized as of the relevant period.

If the August Measurement Period Revenue

is less than the August Projected Revenue, such amount will be subtracted from the principal balance of this August Contingent Payment

Note on a dollar-for-dollar basis.

If the August Measurement Period Revenue is more than the August Projected Revenue, such amount will

be added to the principal balance of this August Contingent Payment Note on a dollar-for-dollar basis.

In no event will the principal

balance of this August Contingent Payment Note become a negative number.

The maximum downward earn-out adjustment to the principal balance

will be a reduction to zero.

There are no limits to the increases to the principal balance of the August Contingent Payment Note

as a result of the earn-out adjustments.

August Contingent Payment Note is considered to be additional purchase price, therefore the estimated fair value of the contingent

liability is recorded as a liability at the acquisition date and the fair value is considered part of the consideration paid for the

acquisition with subsequent changes in fair value recorded as a gain or loss in the Consolidated Statements of Operations.

Management recorded the contingent consideration promissory note at its estimated fair value of $ 650,000 at

the acquisition date.

Principal payments on this contingent consideration promissory note totaled $ 84,477 during

the three months ended March 31, 2022.

The estimated

fair value of the August Contingent Note at March 31, 2022 is $ 673,037 ,

representing an increase in its estimated fair value of $ 107,514 as

compared to is estimated fair value as of December 31, 2021.

Therefore, the

Company recorded a loss of $ 107,514 in

the Consolidated Statements of Operations for the three months ended March 31, 2022.

January 1, 2022, Nobility Healthcare issued another contingent consideration promissory note (the “January Contingent Payment

Note”) in connection with a stock purchase agreement between Nobility Healthcare and a private company (the “January Sellers”)

of $ 750,000 .

The January Contingent Payment Note has a two and a half year term and bears interest at

a rate of 3.00 %

Quarterly principal and interest payments are deferred for seven months and is due in equal quarterly installments on the

tenth business day of each quarter.

The principal amount of the January Contingent Payment Note is subject to an earn-out adjustment,

being the difference between $ 3,500,000

(the “January Projected Revenue”)

and the cash basis revenue (the “January Measurement Period Revenue”) collected by the January Sellers in its normal course

of business from the clients existing on January 1, 2022, during the period from April 1, 2022 through March 31, 2023 (the “January

Measurement Period”) measured on a quarterly basis and annualized as of the relevant period.

If the January Measurement Period

Revenue is less than the January Projected Revenue, such amount will be subtracted from the principal balance of this January Contingent

Payment Note on a dollar-for-dollar basis.

If the January Measurement Period Revenue is more than the January Projected Revenue, such

amount will be added to the principal balance of this January Contingent Payment Note on a dollar-for-dollar basis.

In no event will

the principal balance of this January Contingent Payment Note become a negative number.

The maximum downward earn-out adjustment to the

principal balance will be a reduction to zero.

There are no limits to the increases to the principal balance of the January Contingent

Payment Note as a result of the earn-out adjustments.

January Contingent Payment Note is considered to be additional purchase price, therefore the estimated fair value of the contingent liability

The August Contingent Payment Note has a three -year term and bears interest at a rate of 3.00 % per annum.

Quarterly principal

and interest payments are deferred for six months and is due in equal quarterly installments on the seventh business day of each quarter.

The principal amount of the August Contingent Payment Note is subject to an earn-out adjustment, being the difference between $ 3,000,000

(the “August Projected Revenue”) and the cash basis revenue (the “August Measurement Period Revenue”) collected

by the August Sellers in its normal course of business from the clients existing on September 1, 2021, during the period from December

1, 2021 through November 30, 2022 (the “August Measurement Period”) measured on a quarterly basis and annualized as of the

relevant period.

If the August Measurement Period Revenue is less than the August Projected Revenue, such amount will be subtracted from

the principal balance of this August Contingent Payment Note on a dollar-for-dollar basis.

If the August Measurement Period Revenue is

more than the August Projected Revenue, such amount will be added to the principal balance of this August Contingent Payment Note on

a dollar-for-dollar basis.

In no event will the principal balance of this August Contingent Payment Note become a negative number.

maximum downward earn-out adjustment to the principal balance will be a reduction to zero.

There are no limits to the increases to the

principal balance of the August Contingent Payment Note as a result of the earn-out adjustments.

August Contingent Payment Note is considered to be additional purchase price, therefore the estimated fair value of the contingent liability

is recorded as a liability at the acquisition date and the fair value is considered part of the consideration paid for the acquisition

with subsequent changes in fair value recorded as a gain or loss in the Consolidated Statements of Operations.

Management recorded the

contingent consideration promissory note at its estimated fair value of $ 650,000 at the acquisition date.

Principal payments, since its inception, on this

contingent consideration promissory note totaled $ 159,098 .

The estimated fair value of the

August Contingent Note at June 30, 2022 is $ 426,326 , representing a decrease in its estimated fair value of $ 172,091 as compared to

is estimated fair value as of March 31, 2022.

Therefore, the Company recorded a gain of $ 172,091 in the Consolidated Statements of

Operations for the three months ended June 30, 2022.

The Company recorded a gain of $ 64,576 in the Consolidated Statements of Operations for the six months ended June

January 1, 2022, Nobility Healthcare issued another contingent consideration promissory note (the “January Contingent Payment Note”)

in connection with a stock purchase agreement between Nobility Healthcare and a private company (the “January Sellers”) of

The January Contingent Payment Note has a two and a half year term and bears interest at a rate of 3.00 % per annum.

principal and interest payments are deferred for seven months and is due in equal quarterly installments on the tenth business day of

each quarter.

The principal amount of the January Contingent Payment Note is subject to an earn-out adjustment, being the difference

between $ 3,500,000 (the “January Projected Revenue”) and the cash basis revenue (the “January Measurement Period Revenue”)

collected by the January Sellers in its normal course of business from the clients existing on January 1, 2022, during the period from

April 1, 2022 through March 31, 2023 (the “January Measurement Period”) measured on a quarterly basis and annualized as of

the relevant period.

If the January Measurement Period Revenue is less than the January Projected Revenue, such amount will be subtracted

from the principal balance of this January Contingent Payment Note on a dollar-for-dollar basis.

If the January Measurement Period Revenue

is more than the January Projected Revenue, such amount will be added to the principal balance of this January Contingent Payment Note

on a dollar-for-dollar basis.

In no event will the principal balance of this January Contingent Payment Note become a negative number.

The maximum downward earn-out adjustment to the principal balance will be a reduction to zero.

There are no limits to the increases to

the principal balance of the January Contingent Payment Note as a result of the earn-out adjustments.

January Contingent Payment Note is considered to be additional purchase price, therefore the estimated fair value of the contingent

liability is recorded as a liability at the acquisition date and the fair value is considered part of the consideration paid for the

Management has recorded the contingent consideration promissory note at its estimated fair value of $ 750,000

at the acquisition date.

Management will continue

to estimate the fair value of this January Contingent Payment Note at each reporting date with the change, if any, recorded as

a gain or loss in the statement of operations during the relevant period.

Management determined that there was no change in estimated

fair value relative to this contingent consideration promissory note for the three months ended March 31, 2022.

There were no principal

payments on this contingent consideration promissory note during the three months ended March 31, 2022.

The estimated fair value of the January Contingent Note at June 30, 2022 is $ 481,151 ,

representing a decrease in its estimated fair value of $ 268,849

as compared to is estimated fair value as of March 31, 2022.

Therefore, the Company recorded a gain of $ 268,849

in the Consolidated Statements of Operations for the three and six months ended June 30, 2022.

There were no principal payments on

this contingent consideration promissory note during the three months ended June 30, 2022.

February 1, 2022, Nobility Healthcare issued another contingent consideration promissory note (the “February Contingent Payment

Note”) in connection with an asset purchase agreement between Nobility Healthcare and a private company (the “February

Sellers”) of $ 105,000 .

The February Contingent Payment Note has a three -year

term and bears interest at a rate of 3.00 %

Quarterly principal and interest payments are deferred for seven months and is due in equal quarterly installments on the

tenth business day of each quarter.

The principal amount of the February Contingent Payment Note is subject to an earn-out adjustment,

being the difference between $ 440,000

(the “February Projected Revenue”)

and the cash basis revenue (the “February Measurement Period Revenue”) collected by the February Sellers in its normal course

of business from the clients existing on February 1, 2022, during the period from May 1, 2022 through April 30, 2023 (the “February

Measurement Period”) measured on a quarterly basis and annualized as of the relevant period.

If the February Measurement Period

Revenue is less than the February Projected Revenue, such amount will be subtracted from the principal balance of this February Contingent

Payment Note on a dollar-for-dollar basis.

If the February Measurement Period Revenue is more than the February Projected Revenue, such

amount will be added to the principal balance of this February Contingent Payment Note on a dollar-for-dollar basis.

In no event will

the principal balance of this February Contingent Payment Note become a negative number.

The maximum downward earn-out adjustment to

the principal balance will be a reduction to zero.

There are no limits to the increases to the principal balance of the February

Contingent Payment Note as a result of the earn-out adjustments.

Note”) in connection with an asset purchase agreement between Nobility Healthcare and a private company (the “February Sellers”)

of $ 105,000 .

The February Contingent Payment Note has a three -year term and bears interest at a rate of 3.00 % per annum.

Quarterly principal

and interest payments are deferred for seven months and are due in equal quarterly installments on the tenth business day of each quarter.

The principal amount of the February Contingent Payment Note is subject to an earn-out adjustment, being the difference between $ 440,000

(the “February Projected Revenue”) and the cash basis revenue (the “February Measurement Period Revenue”) collected

by the February Sellers in its normal course of business from the clients existing on February 1, 2022, during the period from May 1,

2022 through April 30, 2023 (the “February Measurement Period”) measured on a quarterly basis and annualized as of the relevant

If the February Measurement Period Revenue is less than the February Projected Revenue, such amount will be subtracted from the

principal balance of this February Contingent Payment Note on a dollar-for-dollar basis.

If the February Measurement Period Revenue is

more than the February Projected Revenue, such amount will be added to the principal balance of this February Contingent Payment Note

on a dollar-for-dollar basis.

In no event will the principal balance of this February Contingent Payment Note become a negative number.

The maximum downward earn-out adjustment to the principal balance will be a reduction to zero.

There are no limits to the increases to

the principal balance of the February Contingent Payment Note as a result of the earn-out adjustments.

February Contingent Payment Note is considered to be additional purchase price, therefore the estimated fair value of the contingent

2 unchanged sentences

at the acquisition date.

Management will continue

to estimate the fair value of this February Contingent Payment Note at each reporting date with the change, if any, recorded as

a gain or loss in the statement of operations during the relevant period.

Management determined that there was no change in estimated

fair value relative to this contingent consideration promissory note for the three months ended March 31, 2022.

There were no principal

payments on this contingent consideration promissory note during the three months ended March 31, 2022.

The estimated fair value of the February Contingent Note at June 30, 2022 is $ 0 ,

representing a reduction in its estimated fair value of $ 105,000

as compared to is estimated fair value as of March 31, 2022.

Therefore, the Company recorded a gain of $ 105,000

in the Consolidated Statements of Operations for the three and six months ended June 30, 2022.

There were no principal payments on

this contingent consideration promissory note during the three months ended June 30, 2022.

FAIR VALUE MEASUREMENT

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following table represents the Company’s hierarchy for its financial assets and liabilities measured at fair value on a recurring

basis as of March 31, 2022 and December 31, 2021:

basis as of June 30, 2022 and December 31, 2021:

SCHEDULE OF FINANCIAL ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS

March 31, 2022

June 30, 2022

Warrant derivative liabilities

Contingent consideration promissory notes

Liabilities, fair value

December 31, 2021

2 unchanged sentences

Liabilities, fair value

following table represents the change in Level 3 tier value measurements for the three months ended March 31, 2022:

following table represents the change in Level 3 tier value measurements for the periods ended June 30, 2022:

SCHEDULE OF FAIR VALUE MEASUREMENTS CHANGE IN LEVEL 3 INPUTS

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Issuance of contingent consideration promissory note - Revenue Cycle Management Segment Acquisition

Principal payments on contingent consideration promissory notes – Revenue Cycle

Management Acquisitions

Change in fair value of contingent consideration promissory notes - Revenue Cycle Management

Principal payments on contingent consideration promissory notes – Revenue Cycle Management Acquisitions

Change in fair value of contingent consideration promissory notes - Revenue Cycle Management Acquisitions

Change in fair value of warrant derivative liabilities

Balance, March 31, 2022

Principal payments on contingent consideration promissory notes – Revenue Cycle Management Acquisitions

Change in fair value of contingent consideration promissory notes - Revenue Cycle Management Acquisitions

Change in fair value of warrant derivative liabilities

( 5,413,618 )

Balance, June 30, 2022

ACCRUED EXPENSES

expenses consisted of the following at March 31, 2022 and December 31, 2021:

expenses consisted of the following at June 30, 2022 and December 31, 2021:

SCHEDULE OF ACCRUED EXPENSES

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Total accrued expenses

warranty expense was comprised of the following for the three months ended March 31, 2022:

warranty expense was comprised of the following for the six months ended June 30, 2022:

SCHEDULE OF ACCRUED WARRANTY EXPENSE

3 unchanged sentences

Ending balance

effective tax rate for the three months ended March 31, 2022 and 2021 varied from the expected statutory rate due to the Company continuing

effective tax rate for the three months ended June 30, 2022 and 2021 varied from the expected statutory rate due to the Company continuing

to provide a 100 % valuation allowance on net deferred tax assets.

The Company determined that it was appropriate to continue the full

valuation allowance on net deferred tax assets as of March 31, 2022, primarily because of the Company’s history of operating losses.

Company has incurred operating losses in recent years, and it continues to be in a three-year cumulative loss position at March 31, 2022.

valuation allowance on net deferred tax assets as of June 30, 2022, primarily because of the Company’s history of operating losses.

Company has incurred operating losses in recent years, and it continues to be in a three-year cumulative loss position at June 30, 2022.

Accordingly, the Company determined there was not sufficient positive evidence regarding its potential for future profits to outweigh

1 unchanged sentence

Therefore, it determined to

continue to provide a 100 %

valuation allowance on its net deferred tax assets.

The Company expects to continue to maintain a full valuation allowance until it determines

that it can sustain a level of profitability that demonstrates its ability to realize these assets.

To the extent the Company determines

that the realization of some or all of these benefits is more likely than not based upon expected future taxable income, a portion or

all of the valuation allowance will be reversed.

The Company has available to it approximately $ 81.4

million (based on its December 31, 2021

tax return) in net operating loss carryforwards to offset future taxable income as of March 31, 2022.

continue to provide a 100 % valuation allowance on its net deferred tax assets.

The Company expects to continue to maintain a full valuation

allowance until it determines that it can sustain a level of profitability that demonstrates its ability to realize these assets.

the extent the Company determines that the realization of some or all of these benefits is more likely than not based upon expected future

taxable income, a portion or all of the valuation allowance will be reversed.

The Company has available to it approximately $ 81.4 million

(based on its December 31, 2021 tax return) in net operating loss carryforwards to offset future taxable income as of June 30, 2022.

PREPAID EXPENSES

expenses were the following at March 31, 2022 and December 31, 2021:

expenses were the following at June 30, 2022 and December 31, 2021:

SCHEDULE OF PREPAID EXPENSE

3 unchanged sentences

PROPERTY, PLANT AND EQUIPMENT

plant and equipment consisted of the following at March 31, 2022 and December 31, 2021:

plant and equipment consisted of the following at June 30, 2022 and December 31, 2021:

SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT

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Net property, plant and equipment

expense for the six months ended June 30, 2022 and June 30, 2021 was $ 307,328 and $ 95,346 , respectively, and is included in general and

administrative expenses.

OPERATING LEASE

May 13, 2020, the Company entered into an operating lease for new warehouse and office space, which the Company currently utilizes

as one of its office, assembly and warehouse locations.

The original lease agreement was amended on August 28, 2020

to correct the footage under lease and monthly payment amounts resulting from such correction.

The lease terms, as amended, include

no base rent for the first nine months and monthly payments ranging from $ 12,398

thereafter, with a termination

date of December 2026 .

The Company is responsible

for property taxes, utilities, insurance and its proportionate share of common area costs related to this location.

May 13, 2020, the Company entered into an operating lease for new warehouse and office space, which the Company currently utilizes as

one of its office, assembly and warehouse locations.

The original lease agreement was amended on August 28, 2020 to correct the footage

under lease and monthly payment amounts resulting from such correction.

The lease terms, as amended, include no base rent for the first

nine months and monthly payments ranging from $ 12,398 to $ 14,741 thereafter, with a termination date of December 2026.

The Company is

responsible for property taxes, utilities, insurance and its proportionate share of common area costs related to this location.

took possession of the leased facilities on June 15, 2020.

The remaining lease term for the Company’s office and warehouse operating

lease as of March 31, 2022, was fifty-seven

The Company’s previous office and

warehouse space lease expired in April 2020 and the Company paid holdover rent for the time period until it moved to and commenced occupying

the new space on June 15, 2020.

lease as of June 30, 2022, was fifty-four months.

The Company’s previous office and warehouse space lease expired in April 2020

and the Company paid holdover rent for the time period until it moved to and commenced occupying the new space on June 15, 2020.

Company entered into an operating lease with a third party in October 2019 for copiers used for office and warehouse purposes.

of the lease include 48

monthly payments of $ 1,598

with a maturity

date of October 2023 .

The Company has the option

to purchase the equipment at maturity for its estimated fair market value at that point in time.

The remaining lease term for

the Company’s copier operating lease as of March 31, 2022, was nineteen

of the lease include 48 monthly payments of $ 1,598 with a maturity date of October 2023.

The Company has the option to purchase the equipment

at maturity for its estimated fair market value at that point in time.

The remaining lease term for the Company’s copier operating

lease as of June 30, 2022, was sixteen months.

June 30, 2021, the Company completed the acquisition of a private medical billing company, through its revenue cycle management segment.

Upon completion of this acquisition, the Company became responsible for the operating lease for the seller’s office space.

The lease terms include monthly payments ranging from $ 2,648

with a termination

date of July 2024 .

lease terms include monthly payments ranging from $ 2,648 to $ 2,774 , with a termination date of July 2024.

The Company is responsible

3 unchanged sentences

The remaining lease term for the Company’s office and warehouse operating

lease as of March 31, 2022, was twenty-eight

lease as of June 30, 2022, was twenty-five months.

August 31, 2021, the Company completed the acquisition of a private medical billing company, through its revenue cycle management segment.

Upon completion of this acquisition, the Company became responsible for the operating lease for the seller’s office space.

The lease terms include monthly payments ranging from $ 11,579

to $ 11,811 ,

with a termination

date of March 2023 .

The Company is responsible for property

taxes, utilities, insurance and its proportionate share of common area costs related to this location.

The Company took possession of

the leased facilities on September 1, 2021.

The remaining lease term for the Company’s office and warehouse operating lease as

of March 31, 2022, was twelve

lease terms include monthly payments ranging from $ 11,579 to $ 11,811 , with a termination date of March 2023.

The Company is responsible

for property taxes, utilities, insurance and its proportionate share of common area costs related to this location.

The Company took

possession of the leased facilities on September 1, 2021.

The remaining lease term for the Company’s office and warehouse operating

lease as of June 30, 2022, was nine months.

September 1, 2021, the Company completed the TicketSmarter Acquisition, in its ticketing segment.

2 unchanged sentences

The lease terms include monthly payments

ranging from $ 7,211

with a termination

date of December 2022 .

The Company is responsible for

property taxes, utilities, insurance and its proportionate share of common area costs related to this location.

The Company took possession

of the leased facilities on September 1, 2021.

The remaining lease term for the Company’s office and warehouse operating lease

as of March 31, 2022 was nine

ranging from $ 7,211 to $ 7,364 , with a termination date of December 2022.

The Company is responsible for property taxes, utilities, insurance

and its proportionate share of common area costs related to this location.

The Company took possession of the leased facilities on September

The remaining lease term for the Company’s office and warehouse operating lease as of June 30, 2022 was six months.

January 1, 2022, the Company completed the acquisition of a private medical billing company, through its revenue cycle management segment.

Upon completion of this acquisition, the Company became responsible for the operating lease for the seller’s office space.

The lease terms include monthly payments ranging from $ 4,233

with a termination

date of June 2025 .

The Company is responsible for property

taxes, utilities, insurance and its proportionate share of common area costs related to this location.

The Company took possession of

the leased facilities on January 1, 2022.

The remaining lease term for the Company’s office and warehouse operating lease as of

March 31, 2022, was thirty-nine

lease terms include monthly payments ranging from $ 4,233 to $ 4,626 , with a termination date of June 2025.

The Company is responsible

for property taxes, utilities, insurance and its proportionate share of common area costs related to this location.

The Company took

possession of the leased facilities on January 1, 2022.

The remaining lease term for the Company’s office and warehouse operating

lease as of June 30, 2022, was thirty-six months.

expense related to the office space and copier operating leases were recorded on a straight-line basis over their respective lease

Total lease expense under the six operating leases was approximately $ 119,230

during the three months ended March 31,

weighted-average remaining lease term related to the Company’s lease liabilities as of March 31, 2022 was 3.7 years.

and $ 274,302 , during the three and six months ended June 30, 2022, respectively.

weighted-average remaining lease term related to the Company’s lease liabilities as of June 30, 2022 was 3.5 years.

discount rate implicit within the Company’s operating leases was not generally determinable and therefore the Company determined

2 unchanged sentences

the operating lease liabilities reflect a weighted average discount rate of 8 %.

following sets forth the operating lease right of use assets and liabilities as of March 31, 2022:

following sets forth the operating lease right of use assets and liabilities as of June 30, 2022:

SCHEDULE OF OPERATING LEASES RIGHT OF USE ASSETS AND LIABILITIES

3 unchanged sentences

Total operating lease obligations

components of lease expense were as follows for the three months ended March 31, 2022:

SCHEDULE OF COMPONENTS OF LEASE EXPENSES

Selling, general and administrative expenses

are the minimum lease payments for each year and in total:

1 unchanged sentence

ending December 31:

(April 1, to December 31, 2022)

(July 1, to December 31, 2022)

undiscounted minimum future lease payments

1 unchanged sentence

GOODWILL AND OTHER INTANGIBLE ASSETS

assets consisted of the following at March 31, 2022 and December 31, 2021:

assets consisted of the following at June 30, 2022 and December 31, 2021:

SCHEDULE OF INTANGIBLE ASSETS

March 31, 2022

June 30, 2022

December 31, 2021

5 unchanged sentences

Personal seat licenses (ticketing

Client agreement (revenue cycle management segments)

Client agreements (revenue cycle management segments)

Indefinite life intangible assets:

6 unchanged sentences

patent or trademark is denied, then the amount deferred will be immediately charged to expense.

expense for the three months ended March 31, 2022 and 2021 was $ 357,966

expense for the three months ended June 30, 2022 and 2021 was $ 358,944

and $ 27,483 ,

respectively.

Estimated amortization for intangible assets with definite lives for the next five years ending December 31 and thereafter

is as follows:

respectively, and $ 716,910 and $ 50,114 , for the six months ended June 30, 2022 and 2021, respectively.

Estimated amortization for intangible

assets with definite lives for the next five years ending December 31 and thereafter is as follows:

SCHEDULE OF ESTIMATED AMORTIZATION FOR INTANGIBLE ASSETS

Year ending December 31:

2022 (April 1, to December 31, 2022)

2022 (July 1, to December 31, 2022)

2026 and thereafter

Other assets were the following

at June 30, 2022 and December 31, 2021:

SCHEDULE OF OTHER ASSETS

Lease receivable

Sponsorship network

Total other assets

COMMITMENTS AND CONTINGENCIES

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of our prevailing, the availability of insurance, and the severity of any potential loss.

We re-evaluate and update accruals as

matters progress over time.

the ultimate resolutions are unknown, based on the information currently available, we do not expect that these lawsuits will individually,

or in the aggregate, have a material adverse effect to our results of operations, financial condition and cash flows.

However, the outcome

of any litigation is inherently uncertain and there can be no assurance that any expense, liability or damages that may ultimately result

from the resolution of these matters will be covered by our insurance or will not be in excess of amounts recognized or provided by insurance

coverage and will not have a material adverse effect on our operating results, financial condition or cash flows.

We re-evaluate and update accruals as matters

progress over time.

On May 31, 2022, the Company filed

a lawsuit against Culp McAuley, Inc.

(“defendant”) in the United States District Court for the District of Kansas.

arises from the defendant’s multiple breaches of its obligations to the Company.

The Company seeks monetary damages and injunctive

relief based on certain conduct by the defendant.

On July 18, 2022, the defendant filed its Answer to the Company’s Verified Complaint

and included Counterclaims alleging breach of contract and seeking monetary damages.

On August 8, 2022, the Company filed its Reply and

Affirmative Defenses to the Counterclaims by, among other things, denying the allegations and any and all liability.

We have not concluded

that a material loss related to the allegations is probable, nor have we accrued a liability related to these claims.

Although we believe

a loss could be reasonably possible (as defined in ASC 450), we do not have sufficient information to determine the amount or range of

reasonably possible loss with respect to the potential damages given that the dispute is yet to enter the discovery process.

We will continue

to vigorously pursue these claims, and we continue to believe that we have valid grounds for recovery of the disputed deliverables.

there can be no assurances as to the outcome of the dispute.

While the ultimate resolutions are unknown, based on the information currently

available, we do not expect that this lawsuit will individually, or in the aggregate, have a material adverse effect to our results of

operations, financial condition and cash flows.

However, the outcome of any litigation is inherently uncertain and there can be no assurance

that any expense, liability or damages that may ultimately result from the resolution of these matters will be covered by our insurance

or will not be in excess of amounts recognized or provided by insurance coverage and will not have a material adverse effect on our operating

results, financial condition or cash flows.

STOCK-BASED COMPENSATION

Company recorded pre-tax compensation expense related to the grant of stock options and restricted stock issued of $ 394,749

and $ 326,164

for the three months ended March 31, 2022 and

2021, respectively.

of March 31, 2022, the Company had adopted nine separate stock option and restricted stock plans:

Company recorded pre-tax compensation expense related to the grant of stock options and restricted stock issued of $ 381,601 and $ 330,213

for the three months ended June 30, 2022 and 2021, and $ 776,350 and $ 656,378 for the six months ended June 30, 2022 and 2021, respectively.

of June 30, 2022, the Company had adopted nine separate stock option and restricted stock plans:

(i) the 2005 Stock Option and Restricted

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Plan are referred to as the “Plans.”

Plans permit the grant of stock options or restricted stock to the Company’s employees, non-employee directors and others

for up to a total of 6,675,000

shares of common stock.

The 2005 Plan terminated

during 2015 with 21,553

shares not awarded or underlying options,

which shares are now unavailable for issuance.

Stock options granted under the 2005 Plan that remain unexercised and outstanding as of

March 31, 2022 total 5,689 .

The 2006 Plan terminated during 2016 with 54,787

shares not awarded or underlying options,

Plans permit the grant of stock options or restricted stock to the Company’s employees, non-employee directors and others for up

to a total of 6,675,000 shares of common stock.

The 2005 Plan terminated during 2015 with 21,553 shares not awarded or underlying options,

which shares are now unavailable for issuance.

Stock options granted under the 2005 Plan that remain unexercised and outstanding as of

March 31, 2022 total 10,625 .

The 2007 Plan terminated during 2017 with 94,651

shares not awarded or underlying options, which

shares are now unavailable for issuance.

stock options granted under the 2007 Plan that

remain unexercised and outstanding as of March 31, 2022.

The 2008 Plan terminated during 2018 with 40,499

shares not awarded or underlying options, which

shares are now unavailable for issuance.

There were no

stock options granted under the 2008 Plan that

remain unexercised and outstanding as of March 31, 2022.

June 30, 2022 total 5,689 .

The 2006 Plan terminated during 2016 with 54,787 shares not awarded or underlying options, which shares are

now unavailable for issuance.

Stock options granted under the 2006 Plan that remain unexercised and outstanding as of June 30, 2022 total

The 2007 Plan terminated during 2017 with 94,651 shares not awarded or underlying options, which shares are now unavailable for

There are no stock options granted under the 2007 Plan that remain unexercised and outstanding as of June 30, 2022.

Plan terminated during 2018 with 40,499 shares not awarded or underlying options, which shares are now unavailable for issuance.

were no stock options granted under the 2008 Plan that remain unexercised and outstanding as of June 30, 2022.

Company believes that such awards better align the interests of our employees with those of its stockholders.

Stock option grants .

option grants.

The Board of Directors has granted stock options under the Plans.

awards have been granted with an exercise price equal to the market price of the Company’s stock at the date of grant with

such option awards generally vesting based on the completion of continuous service and having ten-year contractual terms.

awards typically provide for accelerated vesting if there is a change in control (as defined in the Plans).

The Company has registered

all shares of common stock that are issuable under its Plans with the SEC.

A total of 190,845

shares remained available for awards under

the various Plans as of March 31, 2022.

These option awards have been granted with an exercise

price equal to the market price of the Company’s stock at the date of grant with such option awards generally vesting based on

the completion of continuous service and having ten-year contractual terms.

These option awards typically provide for accelerated vesting

if there is a change in control (as defined in the Plans).

The Company has registered all shares of common stock that are issuable under

its Plans with the SEC.

A total of 190,845 shares remained available for awards under the various Plans as of June 30, 2022.

fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model.

summary of all stock option activity under the Plans for the three months ended March 31, 2022 is as follows:

summary of all stock option activity under the Plans for the six months ended June 30, 2022 is as follows:

SUMMARY OF STOCK OPTIONS OUTSTANDING

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Outstanding at December 31, 2021

Outstanding at March 31, 2022

Exercisable at March 31, 2022

Outstanding at June 30, 2022

Exercisable at June 30, 2022

fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model.

The total estimated grant

date fair value stock options issued during the three months ended March 31, 2022 was $ 22,768 .

date fair value stock options issued during the six months ended June 30, 2022 was $ 22,768 .

Following are certain estimates and assumptions

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There were no shares surrendered pursuant to cashless exercises

during the three months ended March 31, 2022 and 2021.

aggregate intrinsic value of options outstanding was $ 2,750 and $- 0 -,

at March 31, 2022 and December 31, 2021, respectively.

The aggregate intrinsic value of options exercisable was $ 1,375 and

at March 31, 2022 and December 31, 2021, respectively.

of March 31, 2022, the unrecognized portion of stock compensation expense on all existing stock options was $ 127,814 and will be recognized

over the next 3 months.

during the six months ended June 30, 2022 and 2021.

aggregate intrinsic value of options outstanding was $- 0 - and $- 0 -, at June 30, 2022 and December 31, 2021, respectively.

The aggregate

intrinsic value of options exercisable was $- 0 - and $- 0 -, at June 30, 2022 and December 31, 2021, respectively.

of June 30, 2022, the unrecognized portion of stock compensation expense on all existing stock options was $- 0 -.

following table summarizes the range of exercise prices and weighted average remaining contractual life for outstanding and exercisable

options under the Company’s option plans as of March 31, 2022:

options under the Company’s option plans as of June 30, 2022:

SCHEDULE OF SHARES AUTHORIZED UNDER STOCK OPTION PLANS BY EXERCISE PRICE RANGE

Outstanding options

Exercisable options

Exercise price

Weighted average

contractual life

Weighted average

contractual life

$ 0.01 to $ 2.49

$ 2.50 to $ 3.49

$ 3.50 to $ 4.49

stock grants.

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and the right to receive cash dividends.

summary of all restricted stock activity under the Plans for the three months ended March 31, 2022 is as follows:

summary of all restricted stock activity under the Plans for the six months ended June 30, 2022 is as follows:

SUMMARY OF RESTRICTED STOCK ACTIVITY

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Nonvested balance, December 31, 2021

Nonvested balance, March 31, 2022

Nonvested balance, June 30, 2022

Company estimated the fair market value of these restricted stock grants based on the closing market price on the date of grant.

March 31, 2022, there were $ 1,180,036

of total unrecognized compensation costs

related to all remaining non-vested restricted stock grants, which will be amortized over the next fifty-eight

months in accordance with their respective

vesting scale.

June 30, 2022, there were $ 880,299 of total unrecognized compensation costs related to all remaining non-vested restricted stock grants,

which will be amortized over the next fifty-five months in accordance with their respective vesting scale.

nonvested balance of restricted stock vests as follows:

SCHEDULE OF NON-VESTED BALANCE OF RESTRICTED STOCK

2022 (April 1, 2022 through December 31, 2022)

2022 (July 1, 2022 through December 31, 2022)

COMMON STOCK PURCHASE WARRANTS

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The warrants are either immediately

exercisable or have a delayed initial exercise date, no more than six months from their respective issue date and allow the holders

to purchase up to 25,841,931 shares of common stock at $ 2.60 to $ 3.75 per share as of March 31, 2022.

The warrants expire from June 30,

exercisable or have a delayed initial exercise date, no more than six months from their respective issue date and allow the holders to

purchase up to 25,674,931 shares of common stock at $ 2.60 to $ 3.75 per share as of June 30, 2022.

The warrants expire from August 21,

2022 through September 18, 2026 and under certain circumstances allow for cashless exercise.

January 14, 2021 and February 1, 2021, the Company issued warrants to purchase a total of 42,550,000

shares of common stock.

January 14, 2021 and February 1, 2021, the Company issued warrants to purchase a total of 42,550,000 shares of common stock.

issued on January 14, 2021 consist of (i) pre-funded warrants to purchase up to 7,200,000 shares of common stock and (ii) common stock

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of 14,300,000 shares of common stock.

The warrant terms provide for net cash settlement outside the control of the Company

under certain circumstances in the event of tender offers.

The warrant terms provide for net cash settlement outside the control of the Company under

certain circumstances in the event of tender offers.

As such, the Company is required to treat these warrants as derivative liabilities

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August 19, 2021, the Company entered into a Warrant Exchange Agreement (the “Exchange Agreement”) with certain investors

cancelling February Warrants exercisable for an aggregate of 7,681,540

shares of common stock in consideration

for its issuance of new warrants (the “Exchange Warrants”) to such investors, exercisable for an aggregate of up to

shares of common stock.

The Company also

issued warrants (the “Replacement Original Warrants”) replacing the February Warrants for the remaining shares of common

stock exercisable thereunder, representing an aggregate of 6,618,460

shares of common stock, and extended the

expiration date of the February Warrants to September

The Exchange Warrants provide for an

initial exercise price of $ 3.25

per share, subject to customary adjustments thereunder, and

are immediately exercisable upon issuance for cash and on a cashless basis.

On the date of the exchange, the Company calculated the fair

value, using the Black-Scholes method, of the cancelled February Warrants and the newly issued Exchange Warrants, the difference in fair

value measurement of the respective warrants was attributed to warrant modification expense in the consolidated statement of operations.

the date of the exchange, the cancelled February Warrants and Exchange Warrants were valued at $ 11,818,644

and $ 12,114,424

using the original and modified expiry date of

the warrants, respectively, using the Black-Scholes method.

The difference of $ 295,780

was accordingly recorded as a warrant modification

expense in the consolidated statement of operations during 2021.

cancelling February Warrants exercisable for an aggregate of 7,681,540 shares of common stock in consideration for its issuance of new

warrants (the “Exchange Warrants”) to such investors, exercisable for an aggregate of up to 7,681,540 shares of common stock.

The Company also issued warrants (the “Replacement Original Warrants”) replacing the February Warrants for the remaining

shares of common stock exercisable thereunder, representing an aggregate of 6,618,460 shares of common stock, and extended the expiration

date of the February Warrants to September 18, 2026 .

The Exchange Warrants provide for an initial exercise price of $ 3.25 per share,

subject to customary adjustments thereunder, and are immediately exercisable upon issuance for cash and on a cashless basis.

of the exchange, the Company calculated the fair value, using the Black-Scholes method, of the cancelled February Warrants and the newly

issued Exchange Warrants, the difference in fair value measurement of the respective warrants was attributed to warrant modification

expense in the consolidated statement of operations.

the date of the exchange, the cancelled February Warrants and Exchange Warrants were valued at $ 11,818,644 and $ 12,114,424 using the

original and modified expiry date of the warrants, respectively, using the Black-Scholes method.

The difference of $ 295,780 was accordingly

recorded as a warrant modification expense in the consolidated statement of operations during 2021.

SCHEDULE OF WARRANT MODIFICATION

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in the Company’s stock price is a primary driver for the changes in the derivative valuations during each reporting period.

As the stock price increases for each of the related derivative instruments, the value to the holder of the instrument generally increases,

the stock price increases for each of the related derivative instruments, the value to the holder of the instrument generally increases,

therefore increasing the liability on the Company’s balance sheet.

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result in higher fair value measurement.

change in pricing inputs and changes in volatilities and correlation factors would not result in a material change in our Level 3 fair

A 10 % change in pricing inputs and changes in volatilities and correlation factors would not

result in a material change in our Level 3 fair value.

Company has utilized the following assumptions in its Black-Scholes option valuation model to calculate the estimated fair value of the

warrant derivative liabilities as of their date of issuance and as of March 31, 2022:

warrant derivative liabilities as of their date of issuance and as of June 30, 2022:

SCHEDULE OF FAIR VALUE OF THE WARRANT DERIVATIVE LIABILITIES

Issuance date assumptions

March 31, 2022 assumptions

June 30, 2022 assumptions

Volatility - range

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Common stock issuable under the warrants

following table summarizes information about shares issuable under warrants outstanding during the three months ended March 31, 2022:

following table summarizes information about shares issuable under warrants outstanding during the six months ended June 30, 2022:

SUMMARY OF WARRANT ACTIVITY

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Forfeited/cancelled

Vested Balance, March 31, 2022

total intrinsic value of all outstanding warrants aggregated $- 0 - as of March 31, 2022, and the weighted average remaining term is 48

Vested Balance, June 30, 2022

total intrinsic value of all outstanding warrants aggregated $- 0 - as of June 30, 2022, and the weighted average remaining term is 45

following table summarizes the range of exercise prices and weighted average remaining contractual life for outstanding and exercisable

warrants to purchase shares of common stock as of March 31, 2022:

warrants to purchase shares of common stock as of June 30, 2022:

SUMMARY OF RANGE OF EXERCISE PRICES AND WEIGHTED AVERAGE REMAINING CONTRACTUAL LIFE OF WARRANTS

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STOCKHOLDERS’ EQUITY

Issuance of Restricted Common Stock

January 7, 2022, the board of directors approved the grant of 525,000 shares of common stock to officers of the Company.

will generally vest over a period of one to five years on their respective anniversary dates in January through January 2027, provided

that each grantee remains an officer or employee on such dates .

March 23, 2022, the board of directors approved the grant of 190,000 restricted common shares to certain new employees of the Company.

A total of 5,000 shares vested immediately upon issuance and the remainder vest over a period of one to five years .

Such shares will

generally vest over a period of one to five years on their respective anniversary dates in January through January 2027, provided that

each grantee remains an employee on such dates .

of Restricted Stock

the quarter ended March 31, 2022, the Company cancelled 15,000

shares of common stock due to forfeiture reasons.

the six months ended June 30, 2022, the Company cancelled 65,000 restricted shares of common stock due to forfeiture reasons.

Repurchase Program

December 6, 2021, the board of directors of the Company authorized the repurchase of up to $ 10.0

million of the Company’s outstanding common

stock under the specified terms of a share repurchase program (the “Program”).

During the three months ended March 31, 2022,

the Company repurchased 1,876,034

shares of its common stock for $ 2,063,768 ,

in accordance with the Program.

The Program does not obligate the Company to acquire any specific number of shares and shares may be

repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Securities

Exchange Act of 1934, as amended (the “Exchange Act”).

December 6, 2021, the board of directors of the Company authorized the repurchase of up to $ 10.0 million of the Company’s outstanding

common stock under the specified terms of a share repurchase program (the “Program”).

During the three months ended June

30, 2022, the Company repurchased 1,849,952 shares of its common stock for $ 1,962,755 , in accordance with the Program.

Furthermore, during the six months ended June 30, 2022, the Company repurchased 3,725,986 shares of its common stock

for $ 4,026,523 , in accordance with the Program.

SCHEDULE OF STOCK REPURCHASE

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Total all plans

June 30, 2022, the board of directors of the Company elected to terminate the Program, effective immediately.

The Program began in December

2021, with the Company purchasing a total of 5,460,824 shares at a cost of $ 6,001,602 through June 30, 2022.

Noncontrolling

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 statement of (income) loss as “net (income) loss attributable

to noncontrolling interests of consolidated subsidiary”.

We reported net loss attributable to noncontrolling interests

of consolidated subsidiary of $ 98,094

for the three months ended March 31, 2022 and 2021, respectively.

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 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 $ 383,326 and $- 0 - for the three months ended June 30, 2022 and 2021, and $ 285,232

and $- 0 - for the six months ended June 30, 2022 and 2021, respectively.

NET EARNINGS (LOSS) PER SHARE

calculation of the weighted average number of shares outstanding and loss per share outstanding for the three months ended March 31,

calculation of the weighted average number of shares outstanding and loss per share outstanding for the three and six months ended June

30, 2022 and 2021 are as follows:

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Three Months Ended

Numerator for basic and diluted income (loss) per share – Net income (loss)

Six Months Ended

Numerator for basic and diluted income per share – Net income (loss) attributable to common stockholders

$ ( 1,065,513 )

Denominator for basic income (loss) per share – weighted average shares outstanding

Dilutive effect of shares issuable upon conversion of convertible debt and the exercise of stock options and warrants outstanding

Denominator for diluted income (loss) per share – adjusted weighted average shares outstanding

Net income (loss) per share:

$ ( 5,382,487 )

$ ( 7,665,662 )

Denominator for basic loss per share – weighted average shares outstanding

Dilutive effect of shares issuable under stock options and warrants outstanding

Denominator for diluted loss per share – adjusted weighted average shares outstanding

Net loss per share:

income (loss) per share is based upon the weighted average number of common shares outstanding during the period.

For the three months

ended March 31, 2022 and 2021, all shares issuable upon conversion of convertible debt and the exercise of outstanding stock options

For the three and six

months ended June 30, 2022 and 2021, all shares issuable upon conversion of convertible debt and the exercise of outstanding stock options

and warrants were antidilutive, and, therefore, not included in the computation of diluted income (loss) per share.

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June 4, 2021, Digital Ally Healthcare, a wholly-owned subsidiary of the Company, entered into a venture with Nobility LLC (“Nobility”),

an eight-year-old revenue cycle management (“RCM”) company servicing the medical industry, to form Nobility Healthcare,

LLC (“Nobility Healthcare”).

Digital Ally Healthcare is capitalizing the venture with $ 13.5

million to support the venture’s business

strategy to make acquisitions of RCM companies.

Ally Healthcare owns 51% of the venture that entitles it to 51% of the distributable cash as defined in the venture’s operating

agreement plus a cumulative preferred return of 10% per annum on its invested capital.

Nobility will receive a management fee and 49%

of the distributable cash, subordinated to Digital Ally Healthcare’s preferred return .

an eight-year-old revenue cycle management (“RCM”) company servicing the medical industry, to form Nobility Healthcare, LLC

(“Nobility Healthcare”).

Digital Ally Healthcare is capitalizing the venture with $ 13.5 million to support the venture’s

business strategy to make acquisitions of RCM companies.

Digital Ally Healthcare owns 51% of the venture that entitles it to 51% of the

distributable cash as defined in the venture’s operating agreement plus a cumulative preferred return of 10% per annum on its invested

Nobility will receive a management fee and 49% of the distributable cash, subordinated to Digital Ally Healthcare’s preferred

The venture comprises the Company’s revenue cycle management segment.

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segment agreed to a non-refundable initial payment (the “Initial Payment Amount”) of $ 850,000 .

In addition to the Initial Payment Amount, the Company’s revenue cycle management segment agreed to issue a promissory note to

the stockholders of the Healthcare Acquisition in the principal amount of $ 350,000

that is subject to an earn-out adjustment.

estimate of the fair value of this contingent promissory note at December 31, 2021 is $ 317,212 .

The gain associated with the adjustment in the estimated fair value of this contingent promissory note is recorded as a gain in the Consolidated

Statements of Operations for the year ended December 31, 2021.

Lastly, the Company’s revenue cycle management segment agreed to

pay $ 162,552

representing the principal and accrued interest

In addition to the Initial

Payment Amount, the Company’s revenue cycle management segment agreed to issue a promissory note to the stockholders of the Healthcare

Acquisition in the principal amount of $ 350,000 that is subject to an earn-out adjustment.

Management’s estimate of the fair value

of this contingent promissory note at December 31, 2021 is $ 317,212 .

The gain associated with the adjustment in the estimated fair value

of this contingent promissory note is recorded as a gain in the Consolidated Statements of Operations for the year ended December 31,

Lastly, the Company’s revenue cycle management segment agreed to pay $ 162,552 representing the principal and accrued interest

balance due under a promissory note issued to the selling shareholders prior to the acquisition closing date.

The Company’s revenue

cycle management segment anticipates the estimated fair value of the contingent promissory note to be paid in full and, therefore,

the total aggregate purchase price was determined to be approximately $ 1,376,509 .

Total acquisition related costs aggregated $ 164,630 ,

which was expensed as incurred.

Subsequent to the acquisition date, the Company received further information regarding the purchased

assets and assumed liabilities.

As a result, the initial allocation of the purchase price was adjusted by increasing accounts receivable

with a corresponding reduction of goodwill during

the year ended December 31, 2021.

cycle management segment anticipates the estimated fair value of the contingent promissory note to be paid in full and, therefore, the

total aggregate purchase price was determined to be approximately $ 1,376,509 .

Total acquisition related costs aggregated $ 164,630 , which

was expensed as incurred.

Subsequent to the acquisition date, the Company received further information regarding the purchased assets

and assumed liabilities.

As a result, the initial allocation of the purchase price was adjusted by increasing accounts receivable by

$ 75,000 with a corresponding reduction of goodwill during the year ended December 31, 2021.

Company accounts for business combinations using the acquisition method and that the Company has early adopted the amendments of Regulation

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The results of operations of acquired businesses are included in the consolidated financial statements from the acquisition

purchase price of the Healthcare Acquisition was allocated to the tangible assets, and assumed liabilities based on their preliminary

estimated fair values at the time of the Healthcare Acquisition.

The Company expects to retain the services of independent valuation

firm to determine the fair value of these identifiable intangible assets.

Once determined, the Company will reallocate the purchase price

of the acquisition based on the results of the independent evaluation if they are materially different from the allocations as recorded

on June 30, 2021.

The preliminary estimated fair value of assets acquired, and liabilities assumed in the Healthcare Acquisition

were as follows:

purchase price of the Healthcare Acquisition was allocated to the tangible assets, and assumed liabilities based on their

preliminary estimated fair values at the time of the Healthcare Acquisition.

The Company retained the services of an independent valuation firm to determine

the fair value of these identifiable intangible assets.

The Company will continue to evaluate the fair value of the identified intangible

The preliminary and final estimated fair value of assets acquired, and liabilities assumed

in the Healthcare Acquisition were as follows:

SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION

Purchase price allocation

June 30, 2021

June 30, 2022

Assets acquired:

Tangible assets acquired, consisting of acquired cash, accounts receivable and right of use asset

Intangible assets acquired – Client Agreements

Intangible assets acquired – client agreements

Liabilities assumed consisting of a promissory note issued by the selling shareholders which was paid off at closing, net of lease liability assumed

Liabilities assumed pursuant to stock purchase agreement

Total assets acquired and liabilities assumed

Net assets acquired and liabilities assumed

Consideration:

Cash paid at Healthcare Acquisition date

Contingent consideration promissory note

Contingent consideration earn-out agreement

Total Healthcare Acquisition purchase price

Definite-lived intangible assets

consist of client agreements and are amortized on a straight-line basis over their ten-year estimated useful life.

and Other Intangible Assets.

For the period from the date of

the Healthcare Acquisition to June 30, 2022, the Company adjusted its preliminary fair value estimates and estimated useful lives based

upon information obtained through June 30, 2022, which resulted in adjustments to the preliminary allocation of the purchase price.

adjustments primarily related to estimated identifiable intangible asset fair values of client agreements and goodwill.

the measurement period (which is the period required to obtain all necessary information that existed at the acquisition date, or to

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acquisition date.

purchase price of the Medical Billing Acquisition was allocated to the tangible assets, and assumed liabilities based on their preliminary

estimated fair values at the time of the Medical Billing Acquisition.

The Company expects to retain the services of independent valuation

firm to determine the fair value of these identifiable intangible assets.

Once determined, the Company will reallocate the purchase price

of the acquisition based on the results of the independent evaluation if they are materially different from the allocations as recorded

on August 31, 2021.

The preliminary estimated fair value of assets acquired, and liabilities assumed in the Medical Billing Acquisition

were as follows:

purchase price of the Medical Billing Acquisition was allocated to the tangible assets, and assumed liabilities based on their

preliminary estimated fair values at the time of the Medical Billing Acquisition.

The Company expects to retain the services of an

independent valuation firm to determine the fair value of these identifiable intangible assets.

Once determined, the Company will

reallocate the purchase price of the acquisition based on the results of the independent evaluation if they are materially different

from the allocations as recorded on August 31, 2021.

The preliminary estimated fair value of assets acquired, and liabilities

assumed in the Medical Billing Acquisition were as follows:

SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION

assets acquired

Tangible assets acquired

Liabilities assumed pursuant to stock purchase agreement

Total assets acquired and liabilities assumed

assumed pursuant to stock purchase agreement

assets acquired and liabilities assumed

Consideration:

Cash paid at acquisition date

Contingent consideration promissory note

Total acquisition purchase price

paid at acquisition date

consideration promissory note

acquisition purchase price

the measurement period (which is the period required to obtain all necessary information that existed at the acquisition date, or to

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initial payment (the “Initial Payment Amount”) of $ 1,153,626 .

In addition to the Initial Payment Amount,

the Company’s revenue cycle management segment agreed to issue a contingent promissory note to the stockholders of the Medical

Billing Acquisition in the principal amount of $ 750,000

that is subject to an earn-out adjustment.

Company’s revenue cycle management segment anticipates the estimated fair value of the contingent promissory note to be paid in

full, therefore, the total aggregate purchase price was determined to be approximately $ 1,903,626 .

Total acquisition related costs aggregated $ 7,996 ,

which was expensed as incurred.

In addition to the Initial Payment Amount, the Company’s

revenue cycle management segment agreed to issue a contingent promissory note to the stockholders of the Medical Billing Acquisition

in the principal amount of $ 750,000 that is subject to an earn-out adjustment.

The Company’s revenue cycle management segment anticipates

the estimated fair value of the contingent promissory note to be paid in full, therefore, the total aggregate purchase price was determined

to be approximately $ 1,903,626 .

Total acquisition related costs aggregated $ 7,996 , which was expensed as incurred.

Company accounts for business combinations using the acquisition method and that the Company has early adopted the amendments of Regulation

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acquisition date.

purchase price of the Medical Billing Acquisition was allocated to the tangible assets, and assumed liabilities based on their preliminary

estimated fair values at the time of the Medical Billing Acquisition.

The Company expects to retain the services of independent valuation

firm to determine the fair value of these identifiable intangible assets.

Once determined, the Company will reallocate the purchase price

of the acquisition based on the results of the independent evaluation if they are materially different from the allocations as recorded

on January 1, 2022.

The preliminary estimated fair value of assets acquired, and liabilities assumed in the Medical Billing Acquisition

were as follows:

purchase price of the Medical Billing Acquisition was allocated to the tangible assets, and assumed liabilities based on their

preliminary estimated fair values at the time of the Medical Billing Acquisition.

The Company expects to retain the services of an

independent valuation firm to determine the fair value of these identifiable intangible assets.

Once determined, the Company will

reallocate the purchase price of the acquisition based on the results of the independent evaluation if they are materially different

from the allocations as recorded on January 1, 2022.

The preliminary estimated fair value of assets acquired, and liabilities

assumed in the Medical Billing Acquisition were as follows:

SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION

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Obligations”.

February 1, 2022, the Company’s revenue cycle management segment completed an asset acquisition from another

private medical billing company (the “Medical Billing Asset Acquisition”).

In accordance with the asset purchase agreement,

Nobility Healthcare agreed to a non-refundable initial payment (the “Initial Payment Amount”) of $ 230,000 .

In addition to the Initial Payment Amount, the Company’s revenue cycle management segment agreed to issue a contingent promissory

note to the stockholders of the Medical Billing Asset Acquisition in the principal amount of $ 105,000

that is subject to an earn-out adjustment.

Company’s revenue cycle management segment anticipates the estimated fair value of the contingent promissory note to be paid in

full, therefore, the total aggregate purchase price was determined to be approximately $ 335,000 .

Total acquisition related costs aggregated $ 10,322 ,

which was expensed as incurred.

accordance ASC 805, “Business Combinations”, the acquisition method of accounting is used, and recognition of the assets

acquired is at fair value as of the acquisition dates.

February 1, 2022, the Company’s revenue cycle management segment completed an asset acquisition from another private medical billing

company (the “Medical Billing Asset Acquisition”).

In accordance with the asset purchase agreement, Nobility Healthcare agreed

to a non-refundable initial payment (the “Initial Payment Amount”) of $ 230,000 .

In addition to the Initial Payment Amount,

the Company’s revenue cycle management segment agreed to issue a contingent promissory note to the stockholders of the Medical

Billing Asset Acquisition in the principal amount of $ 105,000 that is subject to an earn-out adjustment.

The Company’s revenue

cycle management segment anticipates the estimated fair value of the contingent promissory note to be paid in full, therefore, the total

aggregate purchase price was determined to be approximately $ 335,000 .

Total acquisition related costs aggregated $ 10,322 , which was expensed

In accordance with ASC 805, “Business

Combinations”, the acquisition method of accounting is used, and recognition of the assets acquired is at fair value as of the acquisition

All acquisition costs were expensed as incurred.

The consideration paid has been

allocated to the assets acquired based on their estimated fair values at the acquisition date.

The estimate of fair values for the intangible

assets acquired were agreed to by both buyer and seller.

The acquisition was structured as asset purchase and are included in the consolidated financial statements from the acquisition

The preliminary estimated fair value of intangible assets acquired in the Medical Billing Asset Acquisition were as follows:

The consideration paid has been allocated to the assets acquired based on their

estimated fair values at the acquisition date.

The estimate of fair values for the intangible assets acquired were agreed to by both buyer

The estimated fair value of intangible assets acquired in the Medical Billing Asset Acquisition were as follows:

SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION

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Total acquisition purchase price

change in fair value of the contingent consideration is more fully described in Note 3, “Debt Obligations” and will be

estimated on a quarterly basis.

Definite-lived intangible assets consist of client agreements and are amortized

on a straight-line basis over their ten-year estimated useful life.

Goodwill and Other Intangible Assets.

change in fair value of the contingent consideration is more fully described in Note 3, “Debt Obligations” and will be estimated

on a quarterly basis.

TICKETSMARTER ACQUISITION

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comprises the Company’s ticketing business segment.

In accordance with the stock purchase agreement, the

Company agreed to an initial payment (the “Initial Payment Amount”) of $ 9,403,600

through a combination of cash and common stock.

In accordance with the stock purchase agreement, the Company

agreed to an initial payment (the “Initial Payment Amount”) of $ 9,403,600 through a combination of cash and common stock.

In addition to the Initial Payment Amount, the Company agreed to issue an earn-out agreement to the stockholders of Goody Tickets and

TicketSmarter LLC in the contingent amount of $ 4,244,400

that is subject to an earn-out adjustment based

on actual EBITDA achieved in 2021, of which the Company gave a fair value of $ 3,700,000

on the date of acquisition.

However, following

the completion of 2021, it was determined that the actual EBITDA threshold for any earn-out adjustment to be paid was not met.

in accordance with U.S.

GAAP, the fair value of the contingent earn-out is reduced to zero, and the associated gain related to this revaluation

is recorded in our Consolidated Statements of Operations for the year ended December 31, 2021.

Lastly, included in the agreement, the

Company agreed to place $ 500,000

in escrow, subject to a working capital adjustment

based on actual working capital amounts on the acquisition date as defined in the agreement.

This amount was subject to disbursement

45 days following the close of the acquisition.

The parties completed the working capital adjustment resulting in the Company retaining

of the escrow amount with the $ 202,274

released to the sellers.

The total acquisition

related costs aggregated $ 40,625 ,

which was expensed as incurred.

TicketSmarter LLC in the contingent amount of $ 4,244,400 that is subject to an earn-out adjustment based on actual EBITDA achieved in

2021, of which the Company gave a fair value of $ 3,700,000 on the date of acquisition.

However, following the completion of 2021, it

was determined that the actual EBITDA threshold for any earn-out adjustment to be paid was not met.

Thus, in accordance with U.S.

the fair value of the contingent earn-out is reduced to zero, and the associated gain related to this revaluation is recorded in our

Consolidated Statements of Operations for the year ended December 31, 2021.

Lastly, included in the agreement, the Company agreed to

place $ 500,000 in escrow, subject to a working capital adjustment based on actual working capital amounts on the acquisition date as

defined in the agreement.

This amount was subject to disbursement 45 days following the close of the acquisition.

The parties completed

the working capital adjustment resulting in the Company retaining $ 297,726 of the escrow amount with the $ 202,274 released to the sellers.

The total acquisition related costs aggregated $ 40,625 , which was expensed as incurred.

Company accounts for business combinations using the acquisition method and that the Company has early adopted the amendments of Regulation

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was structured as a stock purchase;

however the parties agreed to coordinate the election to invoke IRS Section 338(h)(10) relative

to this transaction for tax purposes.

however the parties agreed to coordinate the election to invoke IRS Section 338(h)(10) relative to

this transaction for tax purposes.

Therefore, the excess purchase price over the fair value of net tangible assets acquired was recorded

as goodwill, which will be amortized over 15

years for income tax filing purposes.

the other acquired assets were stepped up to fair value and is deductible for income tax purposes.

The results of operations of acquired

businesses are included in the consolidated financial statements from the acquisition date.

as goodwill, which will be amortized over 15 years for income tax filing purposes.

Likewise, the other acquired assets were stepped up

to fair value and is deductible for income tax purposes.

The results of operations of acquired businesses are included in the consolidated

financial statements from the acquisition date.

purchase price of the TicketSmarter Acquisition was allocated to Goody Tickets’ and TicketSmarter LLC’s tangible assets,

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OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED ACQUISITION

Preliminary purchase price

September 30,

Assets acquired:

Tangible assets acquired, including $ 51,432 of cash acquired

Identifiable intangible assets acquired

Liabilities assumed

( 5,128,964 )

Net assets acquired and liabilities assumed

purchase price

assets acquired, including $ 51,432 of cash acquired

intangible assets acquired

assets acquired and liabilities assumed

Consideration:

Cash paid at TicketSmarter Acquisition date

Common stock issued as consideration for TicketSmarter Acquisition at date of acquisition

Contingent consideration earn-out agreement

Cash paid at closing to escrow amount

Cash retained from escrow amount pursuant to settlement of working capital target

Total TicketSmarter Acquisition purchase price

paid at TicketSmarter Acquisition date

stock issued as consideration for TicketSmarter Acquisition at date of acquisition

consideration earn-out agreement

paid at closing to escrow amount

retained from escrow amount pursuant to settlement of working capital target

TicketSmarter Acquisition purchase price

following table sets forth the components of identifiable intangible assets acquired and their estimated useful lives in years as of

the date of acquisition:

SCHEDULE OF COMPONENTS OF IDENTIFIABLE INTANGIBLE ASSETS ACQUIRED AND ESTIMATED USEFUL LIVES

Identifiable intangible assets:

Sponsorship agreement network

Search engine optimization/content

OF COMPONENTS OF IDENTIFIABLE INTANGIBLE ASSETS ACQUIRED AND ESTIMATED USEFUL LIVES

intangible assets:

agreement network

engine optimization/content

the period from the date of the TicketSmarter Acquisition to December 31, 2021, the Company adjusted its preliminary fair value estimates

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related to the sponsorship agreement network), the estimated fair value of the contingent earn-out agreement liability and goodwill.

There were no adjustments to the allocation of the purchase price during the three months ended March 31, 2022.

There were no adjustments to the allocation of the purchase price during the three and six months ended June 30, 2022.

the measurement period (which is the period required to obtain all necessary information that existed at the acquisition date, or to

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Corporate expenses capture the Company’s corporate

administrative activities, and is also to be reported in the segment information.

The Company’s captive insurance subsidiary

provides services to the Company’s other business segments and not to outside customers.

Therefore, its operations are eliminated

in consolidation and it is not considered a separate business segment for financial reporting purposes.

administrative activities, and are also to be reported in the segment information.

The Company’s captive insurance subsidiary provides

services to the Company’s other business segments and not to outside customers.

Therefore, its operations are eliminated in consolidation

and it is not considered a separate business segment for financial reporting purposes.

Video Solutions Segment encompasses our law, commercial, and shield divisions.

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the country, as a monthly service fee.

The Ticketing Segment acts as an intermediary between ticket buyers and sellers within

our secondary ticketing platform, ticketsmarter.com, and we also acquire tickets from primary sellers to then sell through various platforms.

The Ticketing Segment acts as an intermediary between ticket buyers and sellers within our secondary

ticketing platform, ticketsmarter.com, and we also acquire tickets from primary sellers to then sell through various platforms.

Company’s corporate administration activities are reported in the corporate line item.

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cash, invested cash (if any), refundable income taxes (if any), and deferred income taxes.

financial information for the Company’s reportable business segments is provided for the indicated periods and as of March 31,

2022, and March 31, 2021:

financial information for the Company’s reportable business segments is provided for the indicated periods and as of June 30, 2022,

and June 30, 2021:

SCHEDULE OF SEGMENT REPORTING

Three Months Ended March 31,

Three months ended June 30,

Six months ended June 30,

Net Revenues:

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Total Identifiable Assets

segments recorded noncash items effecting the gross profit and operating income (loss) through the established inventory reserves based

segments recorded noncash items affecting the gross profit and operating income (loss) through the established inventory reserves based

on estimates of excess and/or obsolete current and non-current inventory.

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with Managing Member of Nobility Healthcare

On January 27, 2022, the Board

of Directors appointed Christian J.

Hoffmann, III as a member of the Board, effective immediately.

Hoffmann is a principal owner and

manager of Nobility, LLC which is currently the managing member of our consolidated subsidiary Nobility Healthcare, LLC.

LLC is currently the managing member of Nobility Healthcare, LLC.

The Company has advanced a total of $ 158,384

in the form of a working capital loan

to Nobility, LLC in order to fund capital expenditures necessary for the initial growth of the joint venture during 2021.

The outstanding

balance of the working capital loan was $ 158,384

as of March 31, 2022 and the Company anticipates

full repayment of this advance during the year ended December 31, 2022.

During the three months ended March 31, 2022, the Company

paid distributions to the noncontrolling in consolidated subsidiary totaling $ 15,692 .

The Company has advanced a total of $ 158,384 in the form of a working

capital loan to Nobility, LLC in order to fund capital expenditures necessary for the initial growth of the joint venture during 2021.

The outstanding balance of the working capital loan was $ 138,384 as of June 30, 2022 and the Company anticipates full repayment of this

advance during the year ended December 31, 2022.

During the six months ended June 30, 2022, the Company paid distributions to the noncontrolling

in consolidated subsidiary totaling $ 15,692 .

On August 1, 2022, Mr.

Hoffmann resigned as a member of the Board, effective

He remains as a principal owner and manager of Nobility, LLC which is currently the managing member of our consolidated subsidiary

Nobility Healthcare, LLC.

SUBSEQUENT EVENTS

Repurchase Program

December 6, 2021, the Board of Directors of the Company authorized the repurchase of up to $ 10.0

million of the Company’s outstanding common

stock under the specified terms of a share repurchase program (the “Program”).

Subsequent to March 31, 2022, the Company

repurchased 1,280,387

shares of its common stock for $ 1,415,382 ,

in accordance with the Program.

The Program does

not obligate the Company to acquire any specific number of shares and shares may be repurchased in privately negotiated and/or open market

transactions, including under plans complying with Rule 10b5-1 under the Exchange Act.

Notice of Delisting

On July 7, 2022,

Digital Ally, Inc., a Nevada Corporation (the “Company”), received a written notification (the “Notice”) from

the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it was not in

compliance with the minimum bid price requirement for continued listing on the Nasdaq Capital Market, as set forth under Nasdaq Listing

Rule 5550(a)(2) (the “Minimum Bid Price Requirement”), because the closing bid price of the Company’s common stock,

par value $ 0.001 per share (the “Common Stock”), was below $ 1.00 per share for the previous thirty (30) consecutive business

The Notice has no immediate effect on the listing of the Common Stock, which will continue to trade uninterrupted on the Nasdaq

Capital Market under the ticker “DGLY.”

to Nasdaq Listing Rule 5810(c)(3)(A), the Company has been granted 180 calendar days from the date of the Notice, or until January 3,

2023 (the “Compliance Period”), to regain compliance with the Minimum Bid Price Requirement.

If at any time during the Compliance

Period, the bid price of the Common Stock closes at or above $ 1.00 per share for a minimum of ten (10) consecutive business days, Nasdaq

will provide the Company with written confirmation of compliance with the Minimum Bid Price Requirement and the matter will be closed.

the event the Company does not regain compliance with the Minimum Bid Price Requirement by January 3, 2023, the Company may be eligible

for an additional 180-calendar day grace period.

To qualify, the Company will be required to meet the continued listing requirement for

market value of publicly held shares and all other initial listing standards for the Nasdaq Capital Market, with the exception of the

Minimum Bid Price Requirement, and will need to provide written notice to Nasdaq of its intent to regain compliance with such requirement

during such second compliance period.

Company does not regain compliance within the allotted compliance period(s), including any extensions that may be granted by Nasdaq, Nasdaq

will provide notice that the Common Stock will be subject to delisting from the Nasdaq Capital Market.

Resignation of a Member of Board of Directors

Hoffmann resigned as a member of the Board, effective immediately.

He remains as a principal owner and manager of Nobility,

LLC which is currently the managing member of our consolidated subsidiary Nobility Healthcare, LLC.

*************************************

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements