Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 242

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 242
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into by the Company and large reductions in selling, general and administrative head count as the Company right-sized its operations
across all operating segments. Our selling, general and administrative expenses as a percentage of sales increased to 58% for the nine
months ended September 30, 2025 compared to 121% in the same period in 2024. The significant components of selling, general and administrative
expenses are as follows:

    Nine months ended September 30, 

    2025  
    2024 
  
    Research and development expense 
    $405,983  
    $1,244,060 
  
    Selling, advertising and promotional expense 
     501,184  
     1,902,489 
  
    General and administrative expense 
     7,624,817  
     10,462,747 
  
    Goodwill and intangible asset impairment charge 
     —  
     4,830,000 

    Total 
    $8,531,984  
    $18,439,296 

Research
and development expense. Our research and development expenses totaled $405,983 and $1,244,060 for the nine months ended September
30, 2025 and 2024, respectively which represents a decrease of $838,077 (67.4%). The decrease in research and development expense reflects
a narrower project portfolio and a reallocation of resources toward sustaining engineering and targeted enhancements, including reductions
in engineering headcount and third-party development spend.

Selling,
advertising and promotional expenses. Selling, advertising and promotional expense totaled $501,184 and $1,902,489 for the nine
months ended September 30, 2025 and 2024, respectively, a decrease of $1,401,305 (73.7%). The decrease in selling, advertising and promotional
expenses is due to significant reductions in sales staffing and in promotional and advertising activities, undertaken to right-size these
expenses to current revenue levels. Additionally, the decline reflects fewer new sponsorship agreements at the Company and its subsidiary,
TicketSmarter.

General
and administrative expense. General and administrative expenses totaled $7,624,817 and $10,462,747 for the nine months ended
September 30, 2025 and 2024, respectively which represents a decrease of $2,837,930 (27.1%). The decrease in general and administrative
expenses in the nine months ended September 30