Company: DGLY
Filing Date: 2025-01-24
Form Type: S-1
Source: 0001493152-25-003451
Chunk: 54

Company: DIGITAL ALLY, INC.
Filing Date: 2025-01-24
Form: S-1
Chunk 54
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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 totalling $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 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