Company: DGLY
Filing Date: 2025-01-24
Form Type: S-1
Source: 0001493152-25-003451
Chunk: 73

Company: DIGITAL ALLY, INC.
Filing Date: 2025-01-24
Form: S-1
Chunk 73
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 to 95% for the year ended December 31, 2022.

Gross Profit

Overall gross profit for the years ended December 31, 2023 and 2022 was $5,762,484 and $2,321,941, respectively, an increase of $3,440,543 (148%). Gross profit by operating segment was as follows:

| Gross Profit:            |     | Years Ended December 31, 
 2023                     |           |     | 2022 |            |   |
|:-------------------------|:----|:-------------------------|----------:|:----|:-----|-----------:|:--|
| Video Solutions          |     | $                        | 1,290,509 |     | $    | (1,250,278 | ) |
| Revenue Cycle Management |     |                          | 2,772,271 |     |      |  3,303,477 |   |
| Entertainment            |     |                          | 1,699,704 |     |      |    268,742 |   |
| Total Gross Profit       |     | $                        | 5,762,484 |     | $    |  2,321,941 |   |

The increase is attributable to the decrease in cost of goods sold across our video and entertainment segments for the year ended December 31, 2023, as there was an overall decrease in the cost of sales as a percentage of overall revenues to 80% for the year ended December 31, 2023 from 94% for the year ended December 31, 2022. This is primarily driven by large inventory reserve being established in 2022, 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, Shield TMdisinfectants 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.

| 49 |

Selling, General and Administrative Expenses

Overall selling, general and administrative expenses were $28,003,037