Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 79

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 1
Chunk 79
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 compared to the same period in 2024 due to the Company not having inventory in–stock to fulfill existing backlog orders, price-cutting and competitive actions by our competitors and adverse marketplace effects related to our recent financial condition. We have been able to start the product supply chain during the first quarter 2025 with funds generated by the February 2025 public equity offering which we believe will improve our video solutions product sales during the remainder of 2025. 

    ●
    Our video solutions operating segment management has continued to focus on migrating commercial customers, from a hardware sale to a service fee model. Therefore, we expect a reduction in commercial hardware sales (principally DVM-250’s, FLT-250’s, and a portion of our body-worn camera line) as we convert these customers to a service model under which we provide the hardware as part of a recurring monthly service fee. In that respect, we introduced a monthly subscription agreement plan for our body worn cameras and related equipment during the second quarter of 2020 that allowed law enforcement agencies to pay a monthly service fee to obtain body worn cameras without incurring a significant upfront capital outlay. This program has gained some traction, resulting in decreased product revenues and increasing our service revenues. We expect this program to continue to hold traction, resulting in recurring revenues over a span of three to five years.

46

Service and other revenues by
operating segment is as follows:

    Three months ended March 31, 

    2025  
    2024 
  
    Service and Other Revenues: 

    Video Solutions 
    $868,050  
    $997,105 
  
    Revenue Cycle Management 
     1,350,551  
     1,434,599 
  
    Entertainment 
     1,535,313  
     1,531,801 
  
    Total Service and Other Revenues 
    $3,753,914  
    $3,963,505 

Service and other revenues for the three months ended
March 31, 2025 and 2024 were $3,753,914 and $3,963,505, respectively, a decrease of $209,591 (5%), due to the following factors:

    ●
    Cloud revenues generated by the video solutions operating segment were $594,742 and $616,488 for the three months ended March 31, 2025 and 2024, respectively, a slight decrease of $21