Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 29

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 29
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 assurances in this regard.

As
a result of the Company’s implementation of cost-cutting measures and liquidity generated by the recent public equity offerings,
the Company has significantly improved its financial position. During the nine months ended September 30, 2025, the working capital deficit
improved significantly to $115,393 from $19,377,507 as of December 31, 2024, and stockholders’ equity increased to a positive $7,516,665
from a $9,013,430 deficit; the Company nonetheless recorded a net loss attributable to common stockholders of $1,303,597.

Based
on the uncertainties described above and the corrective actions implemented by management, the Company believes its business plan including
the implementation of corrective actions mitigates the existence of substantial doubt about its ability to continue as a going concern
within one year from the date of the issuance of these condensed consolidated financial statements. The accompanying condensed consolidated
financial statements do not include any adjustments related to the recoverability and classification of asset amounts or the classification
of liabilities that might be necessary should the Company be unable to continue as a going concern.

    12

NOTE
2. INVENTORIES

Inventories
consisted of the following at September 30, 2025 and December 31, 2024:

 SCHEDULE OF INVENTORIES

    September 30, 2025  
    December 31, 2024 
  
    Raw material and component parts– video solutions segment 
    $2,833,268  
    $2,589,804 
  
    Work-in-process– video solutions segment 
     49,400  
     4,906 
  
    Finished goods – video solutions segment 
     1,071,682  
     1,655,317 
  
    Finished goods – entertainment segment 
     435,077  
     505,694 
  
    Subtotal 
     4,389,427  
     4,755,721 
  
    Reserve for excess and obsolete inventory– video solutions segment 
     (1,659,289) 
     (2,037,252)
  
    Reserve for excess and obsolete inventory – entertainment segment 
     (107,596) 
     (132,403)
  
    Total inventories 
    $2,622,542  
    $2,586,066 

NOTE
3. PREPAID EXPENSES