Company: DGLY
Filing Date: 2025-02-06
Form Type: S-1/A
Source: 0001493152-25-005144
Chunk: 60

Company: DIGITAL ALLY, INC.
Filing Date: 2025-02-06
Form: S-1/A
Chunk 60
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 which contributed to our increased cloud revenues in the nine months ended September 30, 2023. We expect this trend to continue throughout 
 2024 as the migration from local storage to cloud storage continues in our customer base.                                                  |
| ● | Video                                                                                                                                      
 solutions operating segment revenues from extended warranty services were $605,723 and $659,130 for the nine months ended September        
 30, 2024 and 2023, respectively, a decrease of $53,407 (8%). This correlates with the decrease in product revenue during the period.       |
| ● | Our                                                                                                                                        
 entertainment operating segment generated service revenues totalling $3,167,208 and $7,267,424 for the nine months ended September         
 30, 2024 and 2023, respectively, a decrease of $4,100,216 (56%). TicketSmarter collects fees on transactions administered through          
 the TicketSmarter.com platform for the buying and selling of tickets for live events throughout the country. We expect our entertainment   
 operating segment to continue to fluctuate as we look right-size this segment and work towards profitability. Our entertainment segment    
 has focused on cost cutting and overall improvements in gross margin rather than top line revenues which has resulted in a reduction       
 in revenues for ticketing events that did not meet its gross margin goals.                                                                 |

| 36 |

| ● | Our                                                                                                                                     
 revenue cycle management operating segment generated service revenues totalling $4,600,745 and $5,142,904 for the nine months ended     
 September 30, 2024 and 2023, respectively, a decrease of $542,159 (11%). Our revenue cycle management operating segment has completed   
 four acquisitions since formation in June of 2021, thus resulting in the new service revenue stream added in the nine months ended      
 September 30, 2024 and 2023. Our revenue cycle management operating segment provides revenue cycle management solutions and back-office 
 services to healthcare organizations throughout the country. The slight decrease in revenue is due to refinement within one of the      
 recent acquisitions, as they strive to maximize profitability rather than focus on top line revenue.                                    |

Total revenues for the nine months ended September 30, 2024 and 2023 were $15,197,297 and $22,314,519, respectively, a decrease of $7,117,222 (32%), due to the reasons noted above.

Cost of Product Revenue

Overall cost of product revenue sold for the nine months ended September