Company: DGLY
Filing Date: 2025-05-02
Form Type: 424B3
Source: 0001641172-25-008437
Chunk: 39

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-02
Form: 424B3
Chunk 39
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 the year ended December 31, 2023.

Gross Profit

Overall gross profit for the years
ended December 31, 2024 and 2023 was $5,489,332 and $5,762,484, respectively, a decrease of $273,152 (5%). Gross profit by operating segment
was as follows:

| Gross Profit:            |     | Years Ended December 31, 
 2024                     |           |     | 2023 |           |
|:-------------------------|:----|:-------------------------|----------:|:----|:-----|----------:|
| Video Solutions          |     | $                        | 2,722,894 |     | $    | 1,290,509 |
| Revenue Cycle Management |     |                          | 2,365,314 |     |      | 2,772,271 |
| Entertainment            |     |                          |   401,124 |     |      | 1,699,704 |
| Total Gross Profit       |     | $                        | 5,489,332 |     | $    | 5,762,484 |

The decrease is commensurate with the decrease in overall revenues offset by a decrease in cost of goods sold across our video and entertainment segment for the year ended December 31, 2024. There was an overall decrease in the cost of sales as a percentage of overall revenues to 72% for the year ended December 31, 2024 from 80% for the year ended December 31, 2023. This is primarily driven by large head-count reductions in our work force during the year ended December 31, 2024, a focus on right sizing recent acquisitions to increase profitability and a transition to a service subscription-based model in our video solutions segment. Our goal is to improve our margins over the longer term based on the expected margins generated by our new recent revenue cycle management and entertainment operating segments together with our video solutions operating segment and its expected margins from our EVO-HD, DVM-800, VuLink, FirstVu Pro, FirstVu II, EVO Fleet, FLT-250, DVM-250, DVM-250 Plus and our cloud evidence storage and management offering, provided that they gain traction in the marketplace. We plan to continue our initiative to more efficient management of our supply chain through outsourcing production, quantity purchases and more effective purchasing practices.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were