Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 292

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 2
Chunk 292
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 its gross margin goals. The entertainment operating segment has increased
    its use of Google, Facebook and other social media to generate increased ticketing revenues in the third quarter of 2025 compared
    to 2024.

    ●
    Our
    revenue cycle management operating segment generated service revenues totaling $4,144,008 and $4,600,745 for the nine months ended
    September 30, 2025 and 2024, respectively, a decrease of $456,738 (9.9%). 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 nine months ended September 30, 2025, and 2024 were $14,644,460 and $15,197,297, respectively, a slight decrease of
$552,837 (3.6%), due to the reasons noted above.

47

Cost
of Product Revenue

Overall
cost of product revenue sold for the nine months ended September 30, 2025, and 2024 was $5,482,693 and $5,534,209, respectively, a slight
decrease of $51,516 (1%). Overall cost of goods sold for products as a percentage of product revenues for the nine months ended September
30, 2025, and 2024 were 152% and 121%, respectively. Cost of products sold by operating segment is as follows:

    Nine months Ended September 30, 

    2025  
    2024 
  
    Cost of Product Revenues: 

    Video Solutions 
    $1,125,676  
    $1,913,356 
  
    Revenue Cycle Management 
     —  
     — 
  
    Entertainment 
     4,357,017  
     3,620,853 
  
    Total Cost of Product Revenues 
    $5,482,693  
    $5,534,209 

The
decrease in cost of goods sold for our video solutions segment products is due to decrease in product sales experienced during the nine
months ended September 30, 2025 compared to 2024. We were not able to fulfil open orders due to low inventory levels. We have utilized
f