Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 217

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 2
Chunk 217
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 the three months ended March 31, 2025 as compared to 2024, 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, EVO Fleet, FLT-250, DVM-250, DVM-250 Plus 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.

Selling, General and Administrative Expenses

Selling, general and administrative
expenses were $2,576,179 and $5,162,733 for the three months ended March 31, 2025 and 2024, respectively, a decrease of $2,586,554 (50%).
The decrease was primarily attributable to the reduction in new advertising sponsorships being entered into by the Company. Our selling,
general and administrative expenses as a percentage of sales increased to 58% for the three months ended March 31, 2025 compared to 93%
in the same period in 2024. The significant components of selling, general and administrative expenses are as follows:

    Three Months ended March 31, 

    2025  
    2024 
  
    Research and development expense 
    $84,417  
    $487,466 
  
    Selling, advertising and promotional expense 
     108,041  
     761,118 
  
    General and administrative expense 
     2,383,721  
     3,914,149 

    Total 
    $2,576,179  
    $5,162,733 

49

Research and development
expense. Our research and development expenses totaled $84,417 and $487,466 for the three months ended March 31, 2025 and 2024,
respectively which represents a decrease of $403,049 (83%). We have focused on controlling our expenditures on bringing new products to
market, including updates and improvements to current products in response to our decline in revenues. The decrease in research and