Company: DGLY
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001641172-25-024667
Chunk: 92

Company: DIGITAL ALLY, INC.
Filing Date: 2025-08-18
Form: 10-Q
Item: Part I, Item 1
Chunk 92
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 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 three
months ended June 30, 2025, and 2024 were $5,632,039 and $5,616,235, respectively, a slight increase of $15,804 (0.3%), due to the reasons
noted above.

Cost of Product Revenue

Overall cost of product revenue
sold for the three months ended June 30, 2025, and 2024 was $3,901,864 and $3,419,254, respectively, an increase of $482,610 (19.9%).
Overall cost of goods sold for products as a percentage of product revenues for the three months ended June 30, 2025, and 2024 were 179%
and 155%, respectively. Cost of products sold by operating segment is as follows:

    Three Months Ended June 30, 

    2025  
    2024 
  
    Cost of Product Revenues: 

    Video Solutions 
    $584,457  
    $958,462 
  
    Revenue Cycle Management 
     —  
     — 
  
    Entertainment 
     3,317,407  
     2,460,792 
  
    Total Cost of Product Revenues 
    $3,901,864  
    $3,419,254 

The decrease in cost of goods
sold for our video solutions segment products is due to large decrease in product sales experienced during the three months ended June
30, 2025. We could not fulfil open orders due to low inventory levels. We have utilized funds from the February 2025 public equity
offering to ramp the supply chain which we believe will lead to improved product sales during the remainder of 2025. Cost of product sold
as a percentage of product revenues for the video solutions segment decreased to 133% for the three months ended June 30, 2025 as compared
to 154% for the three months ended June 30, 2024.

The increase in entertainment
operating segment cost of product sold directly correlates to the increased revenues and costs associated with our annual Country Stampede
Music Festival. Cost of product sold related to the 2025 Country Stampede Music Festival totaled $2,992,052 as compared to $1,848,167
for the 2024 Festival. Total