Company: DGLY
Filing Date: 2025-02-11
Form Type: S-1/A
Source: 0001493152-25-005949
Chunk: 53

Company: DIGITAL ALLY, INC.
Filing Date: 2025-02-11
Form: S-1/A
Chunk 53
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3.

The decrease in entertainment operating segment cost of product sold was driven by the reduction in sponsored events and primary ticket sales as we selectively limited our events presented for the three months ended September 30, 2024 compared to September 30, 2023, resulting in cost of product revenue of $390,226 for the three months ended September 30, 2024, compared to $1,629,763 for the three months ended September 30, 2023. Cost of product sold as a percentage of product revenues for the entertainment segment was 78% for the three months ended September 30, 2024 as compared to 146% for the three months ended September 30, 2023.

Cost of Service Revenue

Overall cost of service revenue sold for the three months ended September 30, 2024, and 2023 was $1,764,175 and $2,523,800, respectively, a decrease of $759,625 (30%). Overall cost of goods sold for services as a percentage of service revenues for the three months ended September 30, 2024, and 2023 were 54% and 59%, respectively. Cost of service revenues by operating shipment is as follows:

| Cost of Service Revenues: |     | For                    
 the three months ended 
 September 30,          
 2024                   |           |     | 2023 |           |
|:--------------------------|:----|:-----------------------|----------:|:----|:-----|----------:|
| Video Solutions           |     | $                      |   269,962 |     | $    |   382,430 |
| Revenue Cycle Management  |     |                        |   935,070 |     |      | 1,011,429 |
| Entertainment             |     |                        |   559,143 |     |      | 1,129,941 |
| Total Cost of Service     
 Revenues                  |     | $                      | 1,764,175 |     | $    | 2,523,800 |

| 30 |

The decrease in cost of service revenues for our video solutions segment reflects our staffing reductions implemented during 2024 in order to right-size our operations commensurate with our service revenues in the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Cost of service revenues as a percentage of service revenues for the video solutions segment decreased to 30%