Item 2. Properties
Item
2.
Properties.
On
May 13, 2020, the Company entered into an operating lease for new warehouse and office space which had served as its principal executive
office and primary business location, prior to the completed building purchase. The Company plans to relocate the entertainment operating
segment operations to this existing leased facility in 2023. This facility contains approximately 16,531 square feet and is located at
15612 College Blvd, Lenexa, Kansas 66219. 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 31, 2026.
On
April 30, 2021, the Company closed on the purchase and sale agreement to acquire a 71,361 square feet commercial office building located
in Lenexa, Kansas which is intended to serve as the Company’s future office and warehouse needs for executive offices and for management
and warehouse operations for the video solutions operating segment. The building contains approximately 30,000 square feet of office
space and the remainder warehouse space. The total purchase price was approximately $5.3 million. The Company funded the purchase price
with cash on hand, without the addition of external debt or other financing.
On October 26, 2023, the Company entered into a Loan and Security Agreement (the “Kompass
Loan Agreement”) by and between the Company, Digital Ally Healthcare, and Kompass Kapital Funding, LLC, a Kansas limited liability
company (“Kompass”). In connection with the Kompass Loan Agreement, on October 26, 2023, the Company entered into a Mortgage,
Assignment of Leases and Rents, Security Agreement and Fixture Filing by and between the Company, as grantor, and Kompass, as grantee,
and mortgaged its real property having an address of 14001 Marshall Drive, Lenexa, KS 66215.
11
On
June 30, 2021, the Company completed the acquisition of a private medical billing company, through Nobility Healthcare, a majority owned
subsidiary. Upon completion of this acquisition, Nobility Healthcare became responsible for the operating lease for the seller’s
office space. The lease terms include monthly payments ranging from $2,648 to $2,774 and terminate in July 2024. The Company plans to
relocate the revenue cycle management operating segment acquired operations to existing owned or leased facilities upon termination of
this operating lease.
On
August 31, 2021, the Company completed the acquisition of another private medical billing company, through Nobility Healthcare. Upon
completion of this acquisition, Nobility Healthcare became responsible for the operating lease for the seller’s office space.
The lease was renewed in April 2023 with favorable terms and payments ranging from 7,436 to 8,877 thereafter, and with a termination
date in March 2030.
On
September 1, 2021, the Company completed the acquisition of Goody Tickets, LLC and TicketSmarter, LLC, through TicketSmarter. Upon
completion of this acquisition, the Company became responsible for the operating lease for the TicketSmarter office space. The lease
terms included monthly payments ranging from $7,211 to $7,364 and the lease was originally going to expire in December 2022. The
Company signed a six-month extension through June 2023 and is currently on a month-to-month lease with plans to relocate the
entertainment operating segment.
On
January 1, 2022, the Company completed the acquisition of another private medical billing company, through Nobility Healthcare. Upon
completion of this acquisition, Nobility Healthcare became responsible for the operating lease for the seller’s office space. The
lease terms include monthly payments ranging from $4,233 to $4,626 and terminate in June 2025. The Company plans to relocate the revenue
cycle management operating segment acquired operations to existing owned or leased facilities upon termination of this operating lease.