Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 111

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 111
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190 (21.3%),
due to the following factors:

    ●
    Revenues
    generated by the entertainment operating segment began with the Company’s September 2021 acquisition of TicketSmarter and the
    2024 acquisition of the Country Stampede Music Festival. The entertainment operating segment generated $2,880,210 in product revenues
    for the nine months ended September 30, 2025, compared to $2,929,019 for the nine months ended September 30, 2024. This product revenue
    relates to the 2025 Country Stampede music festival held by Kustom during 2025, as well as the resale of tickets purchased for live
    events, sporting events, concerts, and theatre, then sold through various platforms to customers. The decrease in revenues is attributable
    to a reduction in scope of primary ticket sales by Ticketsmarter as it focuses on higher margin events to improve its gross margins.

    ●
    The
    Company’s video segment operating segment generated revenues totaling $721,992 during the nine months ended September 30, 2025
    compared to $1,648,373 for the nine months ended September 30, 2024. In general, our video solutions operating segment has experienced
    pressure on its product revenues as our in-car and body-worn systems are facing increased competition because our competitors have
    released new products with advanced features. Additionally, our law enforcement revenues declined compared to the same period in
    2024 due to the Company not having inventory in–stock to fulfill existing backlog orders, price-cutting and competitive actions
    by our competitors and adverse marketplace effects related to our recent financial condition. During the first three quarters of
    2025, we restarted our product supply chain using proceeds from the February 2025 public equity offering. We expect improved product
    availability to support higher video solutions product sales in the fourth quarter of 2025.

    ●
    Our
    video solutions operating segment management has continued to focus on migrating commercial customers, from a hardware sale to a
    service fee model. Therefore, we expect a reduction in commercial hardware sales (principally DVM-250’s, FLT-250’s, and
    a portion of our body-worn camera line) as we convert these customers to a service model under which we provide the hardware as part
    of a monthly recurring service fee. In that respect, we introduced a monthly subscription agreement plan for