Company: DGLY
Filing Date: 2025-02-14
Form Type: 424B4
Source: 0001493152-25-006704
Chunk: 56

Company: DIGITAL ALLY, INC.
Filing Date: 2025-02-14
Form: 424B4
Chunk 56
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 | 7,626,706 |

Product revenues for the nine months ended September 30, 2024 and 2023 were $4,577,392 and $7,626,706 respectively, a decrease of $3,049,314 (40%), due to the following factors:

| ● | Revenues                                                                                                                              
 generated by the entertainment operating segment began with the Company’s September 2021 acquisition of TicketSmarter. The            
 new entertainment operating segment generated $2,929,019 in product revenues for the nine months ended September 30, 2024, compared   
 to $4,307,891 for the nine months ended September 30, 2023. This product revenue relates to the first Country Stampede music festival 
 held by Kustom during 2024, as well as the resale of tickets purchased for live events, 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.                                                  |

| 35 |

| ● | The                                                                                                                                       
 Company’s video segment operating segment generated revenues totaling $1,648,373 during the nine months ended September                   
 30, 2024 compared to $3,318,815 for the nine months ended September 30, 2023. 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 fulfill 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 the second quarter of 2020 that allowed law enforcement agencies to pay a