Company: DGLY
Filing Date: 2025-02-14
Form Type: 424B4
Source: 0001493152-25-006704
Chunk: 57

Company: DIGITAL ALLY, INC.
Filing Date: 2025-02-14
Form: 424B4
Chunk 57
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%). This correlates with the decrease in product revenue during the period.       |
| ● | Our                                                                                                                                        
 entertainment operating segment generated service revenues totaling $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 totaling $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 30, 2024, and 2023 was $5,534,209 and $7,108,366, respectively, a decrease of $1,574,157 (22%). Overall cost of goods sold for products as a percentage of product revenues for the nine months ended September 30, 2024, and 2023 were 121% and 93%, respectively. Cost of products sold by operating segment is as follows:

| Cost of Product Revenues:      |     | For the nine