Company: DGLY
Filing Date: 2025-02-06
Form Type: S-1/A
Source: 0001493152-25-005144
Chunk: 51

Company: DIGITAL ALLY, INC.
Filing Date: 2025-02-06
Form: S-1/A
Chunk 51
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 2023 that did not recur in 2024, the initial Country Stampede music festival in 2024, as well      
 as the resale of tickets purchased for live events, including 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.                                                                          |

| 28 |

| ● | The                                                                                                                                     
 Company’s video segment operating segment generated revenues totalling $306,245 during the three months ended September 30,             
 2024 compared to $977,193 for the three months ended September 30, 2023, a decrease of $670,948 (69%). 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 fulfil existing backlog orders, price-cutting            
 and competitive actions by our competitors and adverse marketplace effects related to our recent financial condition.                   |
| ● | 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 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: |     | For                    
 the three months ended 
 September 30,          
 2024                   |           |     | 2023 |           |
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