Company: DGLY
Filing Date: 2025-02-11
Form Type: S-1/A
Source: 0001493152-25-005949
Chunk: 63

Company: DIGITAL ALLY, INC.
Filing Date: 2025-02-11
Form: S-1/A
Chunk 63
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 124% for the nine months ended September 30, 2024 as compared to 80% for the nine months ended September 30, 2023.

Cost of Service Revenue

Overall cost of service revenue sold for the nine months ended September 30, 2024, and 2023 was $6,159,284 and $9,698,175, respectively, a decrease of $3,538,891 (36%). Overall cost of goods sold for services as a percentage of service revenues for the nine months ended September 30, 2024, and 2023 were 58% and 66%, respectively. Cost of service revenues by operating segment is as follows:

| Cost of Service Revenues:      |     | For the nine months ended  September 30, 
 2024                                     |           |     | 2023 |           |
|:-------------------------------|:----|:-----------------------------------------|----------:|:----|:-----|----------:|
| Video Solutions                |     | $                                        |   964,412 |     | $    | 1,024,798 |
| Revenue Cycle Management       |     |                                          | 2,868,885 |     |      | 2,939,682 |
| Entertainment                  |     |                                          | 2,325,987 |     |      | 5,733,695 |
| Total Cost of Service Revenues |     | $                                        | 6,159,284 |     | $    | 9,698,175 |

| 37 |

The decrease in cost of service revenues for our video solutions segment is commensurate with the increase in service revenues in the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Cost of service revenues as a percentage of service revenues for the video solutions segment decreased to 34% for the nine months ended September 30, 2024 as compared to 45% for the nine months ended September 30, 2023. The improved cost of service revenues as a percentage of service revenues reflects the results of cost cutting efforts and head-count reductions implemented in 2024 to improve our operating results.

The revenue cycle management operating segment cost of service revenue was consistent with the prior period. Cost of service revenues as a percentage of service revenues for the revenue cycle management operating segment was 62% for the nine months ended September 30, 2024 as compared to 57% for the