Financial Data and Key Metrics Changes - The company reported an operating loss of $6.2 million for Q1 2023, which is an improvement compared to 2022 [5] - Total revenue for Q1 2023 was $7.7 million, down from the previous year but still relatively high compared to two years ago [61] - Deferred revenue increased from $5 million in Q1 2022 to $9 million in Q1 2023, indicating growth in subscriptions [6] Business Line Data and Key Metrics Changes - The Video Solutions division generated approximately $1.9 million in revenue, while Medical Billing revenue cycle management brought in $1.8 million, and the Entertainment segment contributed $4 million [63] - The majority of recurring revenue (over 95%) comes from the law enforcement side, with the commercial side starting to gain traction [12][13] Market Data and Key Metrics Changes - The company has established a strong foothold in the law enforcement market and is now expanding into the commercial sector with the new EVO system [10] - The recent Kustom 440 concert sold nearly 7,500 tickets, exceeding expectations and indicating strong market interest [9] Company Strategy and Development Direction - The company is considering a potential spinout of its Entertainment division to enhance clarity and valuation [3][8] - The long-term strategy includes rolling up smaller entities in a fragmented market to improve profitability and efficiency [32][33] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential in the Video Solutions division and the success of recent events [10][9] - The company aims to address the disparity between its stockholder equity of $30 million and a market cap of $10 million, which is viewed as unacceptable [36][55] Other Important Information - The company completed a reverse stock split of 20-for-1 on February 6, 2023, to improve its stock price [62] - The company is actively pursuing additional concerts and events to drive revenue growth in the Entertainment segment [96] Q&A Session Summary Question: What is the timeline for the spin-off of TicketSmarter? - Management indicated that the timeline is dependent on SEC reviews and the completion of necessary audits, with hopes for a quick resolution [54][72] Question: How does the company plan to break out profitability between Kustom 440 and TicketSmarter? - Management confirmed that they plan to separate the financials of Kustom 440 and TicketSmarter in future filings, especially after the spin-off [27][28] Question: What is the strategy for acquiring new companies in the medical billing sector? - The focus is on acquiring companies with growth potential and positive earnings, integrating them into existing systems to improve margins [32][101]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023. Commission File Number: 001-33899 Digital Ally, Inc. (Exact name of registrant as specified in its charter) Nevada 20-0064269 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 14001 Marshall Drive, Lenexa, KS 66215 (Address of principal execut ...

Financial Data and Key Metrics Changes - The company reported a revenue of $8.3 million for the Video Solutions segment, down approximately 9% year-over-year, attributed to the subscription model and larger sales in 2021 compared to 2022 [6] - The Revenue Cycle Management segment saw a significant increase of 393%, reaching nearly $8 million, primarily due to a full year of operations from acquisitions made in early 2022 [7] - The entertainment segment generated $20.9 million in revenue, a 95% increase from 2021, benefiting from a full year of operations for TicketSmarter [21] - The company reported $3.5 million in cash and $11.4 million in positive working capital, with minimal interest-bearing debt obligations of $900,000 [9] Business Line Data and Key Metrics Changes - Video Solutions segment had a deferred revenue increase from $4.3 million at the end of 2021 to $8 million at the end of 2022 [6] - Revenue Cycle Management achieved a gross margin of $3.3 million, indicating strong profitability [22] - The entertainment division had a gross profit of approximately $300,000, with efforts underway to enhance profitability [22] Market Data and Key Metrics Changes - The ticketing platform, TicketSmarter, generated approximately $21 million in revenue, with potential for growth as the company plans to conduct more live events [11][29] - The company anticipates a strong performance in the entertainment sector, with Live Nation predicting record years, indicating a positive market environment [29][44] Company Strategy and Development Direction - The company is considering a spin-off of the entertainment side of the business, allowing Medical Billing and Video Solutions to remain under Digital Ally [3] - The focus is on maximizing profitability and operational synergies from recent acquisitions, with no new acquisitions since February 2022 [8][19] - The company aims to enhance its ticketing and entertainment division, leveraging existing relationships with municipalities and law enforcement agencies to drive growth [34][55] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the potential for growth in the entertainment sector and the positive reception of new products in the law enforcement market [13][39] - The anticipated spin-off is expected to clarify the company's structure and enhance shareholder value [43][48] - The company is on track to complete necessary audits for the spin-off by mid-2023, with a potential separation date around July 1 [28] Other Important Information - The company regained NASDAQ compliance on February 6, 2023, and extinguished most of its outstanding warrants, resulting in a $3.6 million gain [18][19] - The Video Solutions segment faced challenges with a negative gross margin of $1.25 million due to inventory reserves related to PPE products [41] Q&A Session Summary Question: Potential of the entertainment ticketing side of the business - Management highlighted the unique opportunities in the entertainment division, leveraging relationships with municipalities and the ability to host events in various venues [31][34] Question: Future concert events and revenue generation - Management expressed excitement about upcoming concerts and the potential to generate significant additional revenue through ticket sales and production [35][55]

Revenue Performance - Total net revenues for 2022 reached $37,009,895, a significant increase from $21,413,434 in 2021, representing a growth of approximately 73%[109] - Total revenue for the year ended December 31, 2022, was $37,009,895, representing a 72.8% increase from $21,413,434 in 2021[125] - Revenue Cycle Management segment generated $7,886,107 in revenues for 2022, a substantial increase from $1,630,048 in 2021, reflecting a growth of approximately 384%[109] - Entertainment segment revenues surged to $20,871,500 in 2022, compared to $10,709,760 in 2021, marking an increase of around 95%[109] - Product revenues increased by 19.8% to $10,999,892 in 2022, driven by a 100.9% increase in entertainment segment revenues[119] - Service and other revenues surged by 112.6% to $26,010,003 in 2022, compared to $12,233,147 in 2021[119] - Revenue cycle management segment revenues increased by 384.0% to $7,886,107 in 2022, compared to $1,630,048 in 2021[119] Segment Performance - Video Solutions segment reported revenues of $8,252,288 in 2022, down from $9,073,626 in 2021, indicating a decline of about 9%[109] - Video Solutions segment incurred an operating loss of $9,278,721 in 2022, worsening from a loss of $4,497,196 in 2021[109] - Revenue Cycle Management segment achieved an operating income of $357,705 in 2022, up from $93,763 in 2021, showing improvement in profitability[109] - Entertainment segment reported an operating loss of $7,369,241 in 2022, compared to a profit of $235,432 in 2021, indicating a significant decline in performance[109] Profitability and Loss - Total gross profit for 2022 was $2,321,941, down from $5,663,775 in 2021, indicating a decline of approximately 59%[109] - Gross profit margin for 2022 was 6%, down from 26% in 2021, indicating increased cost pressures[116] - Operating loss for the year ended December 31, 2022, was 80% of total revenues, compared to 69% in 2021[116] - Net loss attributable to common stockholders for 2022 was $8.50 per share, compared to a net income of $10.14 per share in 2021[116] - The company reported a net loss of ($18,873,758) for the year ended December 31, 2022, a decline of $44,404,719 (174%) compared to a net income of $25,530,961 in 2021[155] Cash Flow and Working Capital - Cash and cash equivalents decreased to $3,532,199 as of December 31, 2022, down from $32,007,792 in 2021, resulting in a net decrease of $28,475,593 during the year[168] - Net cash used in operating activities was $18,580,385 for the year ended December 31, 2022, a deterioration of $755,277 compared to $17,825,108 in 2021[168] - As of December 31, 2022, the company had $3,532,199 in cash and cash equivalents and net positive working capital of $11,447,313[171] - Accounts receivable and other receivable balances accounted for $6,120,578 of net working capital as of December 31, 2022, with plans to collect outstanding receivables timely[171] - Inventory represented $6,839,406 of net working capital as of December 31, 2022, with a goal to reduce inventory levels through increased sales activities in 2023[171] Expenses and Costs - Overall cost of product revenue sold rose to $14,372,115 in 2022, an increase of $5,737,068 (66%) from $8,635,047 in 2021, with the video solutions segment's cost of goods sold as a percentage of revenue increasing to 154%[127] - Selling, general and administrative expenses increased to $32,055,199 in 2022, an increase of $11,630,514 (57%) from $20,424,685 in 2021, largely due to recent acquisitions[135] - Research and development expenses rose to $2,290,293 in 2022, an increase of $359,509 (19%) from $1,930,784 in 2021, reflecting the company's focus on new product development[136] - Professional fees and expenses surged to $3,297,895 in 2022, up by $1,784,033 (118%) from $1,513,862 in 2021, driven by increased legal and due diligence costs related to strategic transactions[140] Inventory and Reserves - Total inventories as of December 31, 2022, were $6,839,406, down 29.0% from $9,659,536 in 2021, primarily due to declining inventory for the new Shield product line and the entertainment segment[206] - The reserve for excess and obsolete inventory increased to $5,489,541 as of December 31, 2022, compared to $3,915,089 in 2021, representing a 40.2% increase[206] - Inventory reserves represented 44.5% of the gross inventory balance as of December 31, 2022, compared to 28.8% in 2021[206] - Warranty reserves increased to $15,694 as of December 31, 2022, from $13,742 in 2021, indicating a 14.2% increase[217] Acquisitions and Growth Strategy - The company completed its fourth medical billing asset acquisition for approximately $230,000 in cash, with a contingent consideration of $105,000[175] - The revenue cycle management segment completed its third medical billing company acquisition for approximately $1.2 million in cash, with a contingent consideration of $750,000[174] Future Outlook and Challenges - Management anticipates needing to restore positive operating cash flows and/or raise additional capital in the short term to fund operations over the next 12 months[165] - Inflation is expected to significantly impact all operating segments in 2023 and beyond, although it has not materially affected the company in the past fiscal year[226] - The company does not believe its business is seasonal, but generally generates higher revenues in the second half of the calendar year compared to the first half[226]

Digital Ally, Inc. (NASDAQ:DGLY) Q3 2022 Earnings Conference Call November 16, 2022 11:15 AM ET Company Participants Stanton Ross - Chief Executive Officer Tom Heckman - Chief Financial Officer Brody Green - Chief Accounting Officer Conference Call Participants Rommel Dionisio - Aegis Capital Michael Albanese - EF Hutton Operator Good morning, ladies and gentlemen, and welcome to the Digital Ally, Inc. 2022 Third Quarter Operating Results Conference Call. This conference call may contain forward-looking st ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbol(s) Name of exchange on which registered Common stock, $0.001 par value per share DGLY The Nasdaq Capital Market LLC FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022. or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ t ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022. or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to __________. Commission File Number: 001-33899 Digital Ally, Inc. (Exact name of registrant as specified in its charter) Nevada 20-0064269 (State or other ...

Digital Ally, Inc. (NASDAQ:DGLY) Q1 2022 Earnings Conference Call May 24, 2022 11:15 AM ET Company Participants Stan Ross - Chief Executive Officer Tom Heckman - Chief Financial Officer Conference Call Participants Rommel Dionisio - Aegis Capital Bryan Lubitz - Aegis Capital Mike Albanese - EF Hutton Operator Ladies and gentlemen, thank you for standing by, and welcome to Digital Ally’s 2022 First Quarter Operating Results Call. At this time, all participants lines are in a listen-only mode. After the speak ...

Revenue Performance - Total net revenues for the three months ended March 31, 2022, were $10,294,781, a significant increase from $2,535,829 in the same period of 2021, representing a growth of approximately 305%[201]. - Total revenues for the three months ended March 31, 2022, increased by $7,758,952 (306%) to $10,294,781 from $2,535,829 in the same period of 2021[228]. - Ticketing segment revenue reached $6,380,775, indicating a strong performance since its establishment[201]. - Revenue Cycle Management segment generated $1,903,957 in revenue, reflecting the company's recent entry into this market[201]. - Video Solutions segment revenue decreased to $2,010,049 from $2,535,829 year-over-year, a decline of about 21%[201]. - Product revenues for the three months ended March 31, 2022, were $2,410,060, an increase of $497,483 (26%) compared to $1,912,577 in the same period of 2021[219]. - Service and other revenues surged to $7,884,721 for the three months ended March 31, 2022, an increase of $7,261,469 (1,165%) from $623,252 in the same period of 2021[224]. - The new ticketing operating segment generated $5,306,945 in service revenues for the three months ended March 31, 2022, compared to $0 in the same period of 2021, marking a 100% increase[226]. - The revenue cycle management operating segment generated $1,903,957 in service revenues for the three months ended March 31, 2022, also a 100% increase from $0 in the same period of 2021[227]. Profitability and Loss - The company reported a net loss of $6,698,242 on revenues of $10,294,781 for the first quarter of 2022, compared to a net income of $21,721,858 in the same quarter of 2021[204]. - Operating loss for the first quarter of 2022 was $6,803,338, compared to a loss of $2,865,693 in the same period of 2021[201]. - The company experienced a gross profit margin decrease to 19% in Q1 2022 from 32% in Q1 2021, attributed to increased cost of revenue[207]. - Operating loss for Q1 2022 was (66)% of total revenues, an improvement from (113)% in the same quarter of 2021[207]. - Gross profit for Q1 2022 was $1,939,619, an increase of $1,127,737 (138.9%) compared to Q1 2021[237]. - Selling, general and administrative expenses for Q1 2022 were $8,742,957, an increase of $5,065,382 (137.7%) compared to Q1 2021[238]. - Operating loss for Q1 2022 was $6,803,338, an increase of $3,937,645 (137.4%) compared to Q1 2021[242]. - The company reported an income/(loss) before income tax benefit of ($6,698,242) for Q1 2022, a decrease of $28,420,100 (130.8%) compared to Q1 2021[249]. - Net income for the three months ended March 31, 2022, was reported at a loss of $6,698,242, a decrease of $28,420,100 (130.8%) compared to the same period in 2021[252]. - Net loss attributable to common stockholders for the three months ended March 31, 2022, was ($6,600,148), a deterioration of $28,322,006 (130.4%) from $21,721,858 in 2021[254]. - Basic and diluted loss per share was ($0.13) for the three months ended March 31, 2022, compared to $0.49 in 2021[255]. Assets and Liabilities - Total identifiable assets as of March 31, 2022, were $79,026,018, down from $82,989,197 at the end of 2021[201]. - Cash and cash equivalents decreased to $20,561,116 as of March 31, 2022, from $32,007,792 at December 31, 2021, reflecting a net decrease of $11,446,676[260]. - The company had approximately $81.4 million of net operating loss carryforwards available as of March 31, 2022[250]. - Total outstanding debt obligations amounted to $1,912,064 as of March 31, 2022, with long-term debt obligations at $1,249,347[266]. - The company had $19,483,613 in net positive working capital as of March 31, 2022, with accounts receivable representing $5,602,094 of this amount[263]. Cash Flow - Net cash used in operating activities was $6,055,672 for the three months ended March 31, 2022, an increase of $2,848,828 compared to $3,206,844 in 2021[260]. - Cash used in investing activities was $3,195,346 for the three months ended March 31, 2022, compared to $99,274 in 2021[261]. - Cash used in financing activities was $2,195,658 for the three months ended March 31, 2022, down from cash provided of $66,570,600 in 2021[262]. Inventory and Reserves - Total inventories as of March 31, 2022, amounted to $9,405,920, a decrease from $9,659,536 as of December 31, 2021[286]. - The reserve for obsolete and excess inventories was $3,896,460 as of March 31, 2022, representing 29.3% of the gross inventory balance[288]. - Raw materials and component parts increased by $777,750 (25%) from $3,062,046 as of December 31, 2021, to $3,839,796 as of March 31, 2022[288]. - Finished goods decreased by $1,050,051 (10%) from $10,512,579 as of December 31, 2021, to $9,462,528 as of March 31, 2022[288]. - Warranty reserves decreased to $10,582 as of March 31, 2022, compared to $13,742 as of December 31, 2021[298]. New Products and Market Strategy - The company has introduced new product lines, including ThermoVu® temperature monitoring stations and Shield™ disinfectants, to diversify its offerings[191]. - The company introduced new products, including the FirstVu Pro and FirstVu II body-worn cameras, which are expected to gain traction in the market[221]. - The company is transitioning customers from hardware sales to a service fee model, which is anticipated to reduce product revenues but increase recurring service revenues over the next three to five years[222]. - The Ticketing Segment is expected to generate higher revenues in the second half of the calendar year compared to the first half[307]. Tax and Valuation - The company has fully reserved all deferred tax assets as of March 31, 2022, with a valuation allowance of $16,980,000[304]. - The company expects to maintain a full valuation allowance until it can demonstrate a sustainable level of profitability[304]. - The company has generated substantial deferred income tax assets primarily from stock options, tax credit carryforwards, and net operating loss carryforwards[306]. - The realization of deferred income tax assets is contingent on generating sufficient taxable income in future periods[306]. - As of March 31, 2022, the company has no recorded liability representing uncertain tax positions[305]. Interest and Financial Instruments - Interest income increased to $71,362 in Q1 2022 from $41,686 in Q1 2021[243]. - Interest expense for Q1 2022 was $17,009, an increase from $1,428 in Q1 2021[245]. - The company recorded a net loss of $56,050 related to changes in fair value of contingent consideration promissory notes in Q1 2022[247]. - The company issued warrants to purchase a total of 42,550,000 shares of Common Stock, which are treated as derivative liabilities[299]. - The fair value of warrant derivative liabilities was calculated using a volatility range of 106.6% to 166.6% at issuance and 104.1% as of March 31, 2022[300]. Cost Structure - Overall cost of product revenue for Q1 2022 was $2,822,051, an increase of $1,260,741 (81%) compared to Q1 2021[230]. - Cost of service revenue for Q1 2022 was $5,553,111, an increase of $5,370,474 (3,302%) compared to Q1 2021[233].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Nevada 20-0064269 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) Form 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to __________. Commission file number: 001-3389 ...