Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 293

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 2
Chunk 293
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unds from the February 2025 public equity offering to ramp the supply chain which we believe will lead to improved product sales during
the remainder of 2025. Cost of product sold as a percentage of product revenues for the video solutions segment increased to 156% for
the nine months ended September 30, 2025 as compared to 116% for the nine months ended September 30, 2024.

The
increase in entertainment operating segment cost of product sold directly correlates to the increased revenues and costs associated with
our annual Country Stampede Music Festival. Cost of product sold related to the 2025 Country Stampede Music Festival totaled $2,992,052
as compared to $1,848,167 for the 2024 Festival. Total cost of product revenues for the entertainment operating segment was $4,357,017
and $3,620,853 for the nine months ended September 30, 2025 and 2024, an increase of $736,164 (20.3%). Cost of product sold as a percentage
of product revenues for the entertainment segment increased to 151% for the nine months ended September 30, 2025 as compared to 124%
for the nine months ended September 30, 2024.

Cost
of Service Revenue

Overall
cost of service revenue sold for the nine months ended September 30, 2025, and 2024 was $6,821,318 and $6,159,284, respectively, an increase
of $662,035 (10.7%). Overall cost of goods sold for services as a percentage of service revenues for the nine months ended September
30, 2025, and 2024 were 62% and 58%, respectively. Cost of service revenues by operating segment is as follows:

    Nine months ended September 30, 

    2025  
    2024 
  
    Cost of Service Revenues: 

    Video Solutions 
    $986,011  
    $964,412 
  
    Revenue Cycle Management 
     2,616,329  
     2,868,885 
  
    Entertainment 
     3,218,978  
     2,325,987 
  
    Total Cost of Service Revenues 
    $6,821,318  
    $6,159,284 

Cost
of service revenues for the video solutions segment increased slightly, reflecting higher service revenues for the nine months ended