Company: DGLY
Filing Date: 2025-05-02
Form Type: 424B3
Source: 0001641172-25-008437
Chunk: 35

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-02
Form: 424B3
Chunk 35
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044,576 for the year  
 ended December 31, 2023. This product revenue relates to the first Country Stampede music festival held by Kustom during 2024, as     
 well as the resale of tickets purchased for live events, sporting events, concerts, and theatre, then sold through various platforms  
 to customers. The decrease in revenues is attributable to a reduction in scope of primary ticket sales by Ticketsmarter as it focuses 
 on higher margin events to improve its gross margins.                                                                                 |

| ● | The Company’s video                                                                                                                       
 segment operating segment generated revenues totaling $1,997,389 during the year ended December 31, 2024 compared to $4,303,369 for       
 the year ended December 31, 2023. In general, our video solutions operating segment has experienced pressure on its product revenues      
 as our in-car and body-worn systems are facing increased competition because our competitors have released new products with advanced     
 features. Additionally, our law enforcement revenues declined compared to the same period in 2023 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.                                                                                        |

| 20 |

| ● | 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.                                                                                                           |

Service and other revenues by operating segment is as follows:

| Service and Other Revenues:      |     | Years ended December 31, 
 2024                     |            |     | 2023 |            |
|:---------------------------------|:----|:-------------------------|-----------:|: