Company: DGLY
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001641172-25-024667
Chunk: 146

Company: DIGITAL ALLY, INC.
Filing Date: 2025-08-18
Form: 10-Q
Item: Part I, Item 8
Chunk 146
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, although it can offer no 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 six months ended June 30, 2025, the Company incurred a net loss of $222,122, improved its working capital position to a positive balance of $119,506 and improved its stockholders’ equity to a
positive balance of $8,151,705. These represent improvements from the negative working capital position of $19,377,507 and
stockholders’ deficit balance of $9,013,430 reported at December 31, 2024.

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.

NOTE 2. INVENTORIES

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

 SCHEDULE OF INVENTORIES

    June 30, 2025  
    December 31, 2024 
  
    Raw material and component parts– video solutions segment 
    $2,641,465  
    $2,589,804 
  
    Work-in-process– video solutions segment 
     61,831  
     4,906 
  
    Finished goods – video solutions segment 
     1,125,339  
     1,655,317 
  
    Finished goods – entertainment segment 
     299,165  
     505,694 
  
    Subtotal 
     4,127,800  
     4,755,721 
  
    Reserve for excess and obsolete inventory– video solutions segment 
     (1,559,160) 
     (2,037,252)
  
    Reserve for excess and obsolete inventory – entertainment segment 
     (102,534) 
     (132,403)
  
    Total inventories 
    $2,466,106  
    $2,586,066