Company: DGLY
Filing Date: 2025-01-24
Form Type: S-1
Source: 0001493152-25-003451
Chunk: 70

Company: DIGITAL ALLY, INC.
Filing Date: 2025-01-24
Form: S-1
Chunk 70
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uate as we look right-size this segment and work towards profitability.         |
| ● | Our                                                                                                                                     
 revenue cycle management operating segment generated service revenues totaling $6,713,678 and $7,886,107 for the years ended December   
 31, 2023 and 2022, respectively, a decrease of $1,172,429 (15%). Our revenue cycle management operating segment has completed four      
 acquisitions since formation in June 2021, thus resulting in the new service revenue stream added in the twelve months ended December   
 31, 2022. Our revenue cycle management operating segment provides revenue cycle management solutions and back-office services to        
 healthcare organizations throughout the country. The 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 years ended December 31, 2023, and 2022 were $28,248,344 and $37,009,895, respectively, a decrease of $8,761,551 (24%), due to the reasons noted above.

Cost of Product Revenue

Overall cost of product revenue sold for the years ended December 31, 2023, and 2022 was $9,974,890 and $14,372,115, respectively, a decrease of $4,397,225 (31%). Overall cost of goods sold for products as a percentage of product revenues for the years ended December 31, 2023, and 2022 were 107% and 131%, respectively. Cost of products sold by operating segment is as follows:

| Cost of Product Revenues:      |     | Years Ended December 31, 
 2023                     |           |     | 2022 |            |
|:-------------------------------|:----|:-------------------------|----------:|:----|:-----|-----------:|
| Video Solutions                |     | $                        | 4,824,967 |     | $    |  8,332,484 |
| Revenue Cycle Management       |     |                          |         — |     |      |          — |
| Entertainment                  |     |                          | 5,149,923 |     |      |  6,039,631 |
| Total Cost of Product Revenues |     | $                        | 9,974,890 |     | $    | 14,372,115 |

The decrease in cost of goods sold for our video solutions segment products is