Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 214

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 2
Chunk 214
---
Smarter collects fees on transactions administered through the TicketSmarter.com platform for the buying and selling of tickets for live events throughout the country. We expect our entertainment operating segment to continue to fluctuate as we look to right-size this segment and work towards profitability. Our entertainment segment has focused on cost cutting and overall improvements in gross margin rather than top line revenues which has resulted in a reduction in revenues for ticketing events that did not meet its gross margin goals.

    ●
    Our revenue cycle management operating segment generated service revenues totaling $1,350,551 and $1,434,599 for the three months ended March 31, 2025 and 2024, respectively, a decrease of $84,048 (6%). 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 three months
ended March 31, 2025, and 2024 were $4,475,264 and $5,529,351, respectively, a decrease of $1,054,087 (19%), due to the reasons noted
above.

47

Cost of Product Revenue

Overall cost of product revenue
sold for the three months ended March 31, 2025, and 2024 was $675,639 and $1,567,393, respectively, a decrease of $891,754 (57%). Overall
cost of goods sold for products as a percentage of product revenues for the three months ended March 31, 2025, and 2024 were 94% and 100%,
respectively. Cost of products sold by operating segment is as follows:

    Three Months Ended March 31, 

    2025  
    2024 
  
    Cost of Product Revenues: 

    Video Solutions 
    $64,552  
    $797,494 
  
    Revenue Cycle Management 
     —  
     — 
  
    Entertainment 
     611,087  
     769,899 
  
    Total Cost of Product Revenues 
    $675,639  
    $1,567,393 

The decrease in cost of goods
sold for our video solutions segment products is due to large decrease in product sales experienced during the three months ended March
31, 2025. We were not able to