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, 2021. or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ t ...

Digital Ally, Inc. (NASDAQ:DGLY) Q3 2021 Earnings Conference Call November 17, 2021 11:15 AM ET Company Participants Stanton Ross - Chief Executive Officer Tom Heckman - Chief Financial Officer Conference Call Participants Rommel Dionisio - Aegis Capital Bryan Lubitz - Aegis Capital Patrick McGrady - Stonefish Capital Operator This conference call contains forward-looking statements within the meaning of Section 27E of the Securities Exchange Act of 1934 as amended relating to Digital Ally's future business ...

Financial Data and Key Metrics Changes - Total revenues increased by 44% year-over-year and 21% year-to-date [8] - Gross margins improved to 51% from 23% in the prior year [9] - SG&A expenses increased by 53% year-over-year and 32% year-to-date [9] Business Line Data and Key Metrics Changes - Product revenues rose by 63% year-over-year, with the EVO-HD system accounting for 25% of total revenues compared to 9% last year [10] - DVM-800 maintained a steady contribution of about 18% of revenues [11] - FirstVU body cameras contributed approximately 12% of total revenues, with a new version expected to launch soon [12] - DVM-250 commercial product dropped to about 2% of revenues due to COVID-19 impacts [13] - Service revenues increased by 14% year-over-year, while cloud revenues faced challenges [16] Market Data and Key Metrics Changes - Rental revenues increased significantly due to a sublease on a newly acquired building [17] - Overall gross margins increased primarily due to a shift towards higher-margin EVO products [18] Company Strategy and Development Direction - The company is pursuing a roll-up strategy in the medical billing industry, with the recent acquisition of Elite Medical [28] - Plans to close additional acquisitions in the medical billing sector and other areas by the end of Q3 [30] - The company aims to enhance EBITDA through strategic acquisitions and leverage existing relationships in law enforcement and commercial sectors [35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities as schools reopen and COVID-19 vaccinations progress [36] - The company anticipates continued demand for ThermoVu and Shield products in various sectors [36] Other Important Information - The company reported a strong balance sheet with $58 million in cash and minimal debt [27] - SG&A expenses were driven by professional fees related to acquisitions and increased insurance costs due to COVID-19 [19][24] Q&A Session Summary Question: Impact of FirstVU product on margins - Management confirmed that FirstVU is a high-margin product, typically sold on a subscription basis [37] Question: Opportunities for ThermoVu in large gatherings - Management acknowledged potential for ThermoVu in theaters and workplaces as they reopen [39] Question: Growth of recurring revenue - Recurring revenue has faced challenges due to commercial clients not ramping up post-COVID, but law enforcement side has continued to grow [45] Question: Medical billing acquisition's role in growth - The acquisition is expected to open doors for ThermoVu and Shield products in hospitals and clinics [48] Question: SG&A charges and future expectations - Management indicated that some SG&A increases are nonrecurring, but ongoing acquisitions will lead to continued professional fees [51] Question: Marketing efforts for product awareness - The company is increasing visibility through various marketing strategies, including branding in videos [53] Question: Future roadshows and investor outreach - Management confirmed plans for roadshows to increase awareness and communicate the company's story [69]

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 June 30, 2021. or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___ ...

Financial Data and Key Metrics Changes - Overall revenues increased by approximately $110,000 or 5% year-over-year [8] - Product revenues increased by 8% year-over-year, driven by the success of the subscription program [9] - Service revenues decreased by 5% year-over-year, primarily due to COVID-19 related travel restrictions [9] - Operating income dropped by $938,000 year-over-year, with a $450,000 drop in gross margins despite a 5% increase in revenues [15] - Net income was $21.7 million for the quarter, or $0.49 per share, compared to a loss of $2.3 million or $0.17 per share a year ago [19] - Cash balance improved significantly to $67.6 million from $4.3 million a year ago [21] Business Line Data and Key Metrics Changes - Service costs of sales remained steady at 26%, while product costs of sales increased from 56% to 82% year-over-year [10] - SG&A expenses increased by $485,000, attributed to higher insurance costs and inflationary wage increases [13] Market Data and Key Metrics Changes - The company is experiencing inflationary pressures affecting gross margins, particularly in shipping and component costs [11][12] - The demand for newer components in high demand across various industries is impacting the company's ability to pass on costs [36] Company Strategy and Development Direction - The company is looking to enhance core product lines and explore potential acquisitions to provide more value to investors [23][24] - A new office and warehouse building was acquired to support growth and expansion of product lines [22] - The company is focusing on organic growth through product improvements and exploring adjacent market opportunities [26][30] Management's Comments on Operating Environment and Future Outlook - Management noted that the inflationary trends in costs are expected to be transitory [11][12] - The law enforcement sector is anticipated to continue growing, with positive reception of new products like the Evo HD system and body cameras [30][31] - Management expressed optimism about the recovery from COVID-19 and the potential for increased market share due to unique product offerings [31][32] Other Important Information - The balance sheet has improved dramatically due to $66.5 million raised in public offerings [20] - The company is cautious about insurance costs and is exploring different ways to manage insurance programs [14] Q&A Session Summary Question: How do you plan to pass on inflationary cost increases? - Management indicated that inflationary pressures have been building and they are attempting to pass on costs, but competitive pressures limit their ability to do so effectively [36] Question: Update on foreign law enforcement agency opportunity? - Management confirmed that the deal is delayed but not canceled, as the agency is dealing with its own COVID-related priorities [40] Question: Are customers shifting to subscription models? - Management noted a significant shift towards subscription models, with 15% to 20% quarter-over-quarter growth in that area [48][49] Question: Interest in thermal systems for events? - Management reported an increase in inquiries for situational security products as events begin to reopen [51] Question: Is the current cash sufficient for future plans? - Management confirmed that the current cash position is sufficient for their needs [52] Question: Plans for marketing and product launches? - Management is focused on increasing visibility and marketing efforts, particularly in the commercial fleet market [76][78] Question: Discussion on poison pill strategy? - Management explained that the Blank Check Preferred is intended to protect against unsolicited takeover attempts, but achieving shareholder approval has been challenging [82][84]

Financial Performance - Total revenue for Q1 2021 was $2,535,829, a decrease from $2,798,291 in Q4 2020, reflecting a decline of approximately 9.4%[153] - Gross profit for Q1 2021 was $811,882, resulting in a gross profit margin of 32.0%, down from 43.0% in Q4 2020[153] - The company reported an operating loss of $2,865,693 for Q1 2021, compared to a loss of $1,749,174 in Q4 2020, indicating a worsening of operating performance[153] - Net income for Q1 2021 was $21,721,858, a significant improvement from a net loss of $321,318 in Q4 2020[153] - Total revenues for Q1 2021 were $2,535,829, an increase of $110,084 (5%) compared to $2,425,745 in Q1 2020[176] - Product revenues for Q1 2021 were $1,912,577, up $146,041 (8%) from $1,766,536 in Q1 2020, driven by new product lines generating over $141,309 in revenue[176] - Cloud service revenue increased to $241,653 in Q1 2021, a rise of $14,529 (6%) from $227,124 in Q1 2020[172] - Extended warranty service revenues decreased by $78,676 (24%) to $254,692 in Q1 2021 from $333,368 in Q1 2020[173] - Gross profit for Q1 2021 was $811,882, down $453,146 (36%) from $1,265,028 in Q1 2020, primarily due to increased inbound freight costs[182] - Operating loss increased by $938,325 (49%) to $2,865,693, with operating loss as a percentage of revenues worsening to 113% from 80%[190] - Net income improved by $24,055,968 (1,031%) to $21,721,858 for the three months ended March 31, 2021[197] Expenses and Costs - Total selling, general, and administrative expenses for Q1 2021 were $3,677,575, representing 145% of total revenues, an increase from 132% in Q1 2020[158] - Selling, general and administrative expenses rose to $3,677,575 in Q1 2021, an increase of $485,179 (15%) from $3,192,396 in Q1 2020[183] - Research and development expenses totaled $448,965 in Q1 2021, a decrease of $36,783 (8%) from $485,748 in Q1 2020[183] - Cost of product revenue increased by $572,063 (58%) to $1,561,310 in Q1 2021 from $989,247 in Q1 2020, attributed to higher inbound freight costs[177] - Total cost of sales as a percentage of revenues was 68% in Q1 2021, compared to 48% in Q1 2020, indicating a decline in gross margins[179] - Other selling, general, and administrative expenses increased by $751,222 (78%) to $1,715,119, mainly due to increased travel costs and insurance expenses related to COVID-19[189] - Professional fees and expenses decreased by $107,015 (32%) to $232,577 for the three months ended March 31, 2021, primarily due to the termination of the Axon lawsuit[187] - Executive, sales, and administrative staff payroll expenses decreased by $36,619 (5%) to $684,159, attributed to a reduction in technical support staffing due to the COVID-19 pandemic[188] Cash and Debt Management - The company has no off-balance sheet debt and recently acquired a commercial office building for approximately $5.3 million to support future operations[155] - Interest income rose to $41,686 from $6,263, reflecting increased cash levels and net proceeds of approximately $66.4 million from registered direct offerings[191] - Interest expense decreased significantly to $1,427 from $307,560, due to the elimination of most interest-bearing debt using proceeds from registered direct offerings[192] - Cash and cash equivalents increased to $67,626,240, up from $4,361,758 at December 31, 2020, with a net increase of $63,264,482 during the three months[203] - The company has outstanding debt obligations totaling $160,000, with maturities spread across 2021 to 2026 and beyond[215] Inventory and Reserves - As of March 31, 2021, the company had a reserve for excess and obsolete inventory of $2,388,256, representing 21.2% of the gross inventory balance[232] - The company reported a decrease in warranty reserves to $9,243 as of March 31, 2021, down from $31,845 as of December 31, 2020[237] - The company’s finished goods inventory increased by 17% to $8,128,666 as of March 31, 2021, compared to $6,974,291 at December 31, 2020[232] - The company’s total raw materials and component parts decreased by 1% to $3,141,836 as of March 31, 2021[232] Future Outlook and Strategy - The introduction of the EVO-HD, ThermoVU™, and Shield™ product lines is expected to help diversify and increase revenues in the law enforcement and commercial markets[152] - The company aims to increase recurring cloud and service revenues as part of its growth strategy[150] - Total revenue for 2022 was $184,145, an increase from $133,260 in 2021, while revenue for 2023 is projected at $184,241[215] - The company expects to maintain a full valuation allowance on net deferred tax assets until it can demonstrate a sustainable level of profitability[244] - The realization of deferred income tax assets is contingent upon generating sufficient taxable income in future periods[247] Market and Economic Conditions - The COVID-19 pandemic negatively impacted revenues from legacy products, particularly the DVM-250 Plus and DVM-800, while positively affecting sales of the Shield disinfectant and ThermoVU product lines[162] - Inflation has not materially affected the company during the past fiscal year[248] - The company typically generates higher revenues in the second half of the calendar year compared to the first half[248]

Financial Data and Key Metrics Changes - The company reported a net loss improvement of $7.3 million year-over-year, representing a 74% improvement from 2019 to 2020 [17] - Cash balance at the end of 2020 was $4 million compared to $350,000 in 2019, and stockholders' equity increased to $14 million from a deficit of $6 million, marking a $20 million turnaround year-over-year [18] - Gross margin increased by 26% year-over-year due to reduced cost of sales and improved product mix [16] Business Line Data and Key Metrics Changes - Product revenues increased by approximately $300,000 or roughly 4% year-over-year, largely driven by the new Shield product line, which contributed about $1.6 million in 2020 [14] - Service revenues declined due to a decrease in extended warranty revenues as the company shifted to a subscription model [14] - Installation revenues also decreased due to travel restrictions imposed by the COVID-19 pandemic [15] Market Data and Key Metrics Changes - The company experienced a significant impact from COVID-19 on its commercial business, particularly in sectors like tourism and transportation, but has started to see a revival in these areas [30][31] - The demand for the Shield product line is expected to continue growing, with plans to expand into larger distribution channels [33] Company Strategy and Development Direction - The company plans to invest in both organic growth and acquisitions, with a focus on expanding the Shield product line and exploring new PPE offerings [19][21] - There is an emphasis on strategic acquisitions that complement the current product line, with ongoing discussions with multiple candidates [20] - The company aims to leverage its improved cash position to enhance its market presence and shareholder value [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's stronger position entering 2021, despite the challenges faced in 2020 [22] - The company is looking forward to potential national funding for law enforcement, which could drive growth in that segment [26] - Management is excited about the upcoming launch of a new version of body cameras, which will feature advanced capabilities [27][62] Other Important Information - The company raised approximately $22 million in cash through various offerings in 2020, which helped address NASDAQ listing deficiencies and improve liquidity [9] - The company successfully terminated a litigation financing obligation, resulting in a $5 million gain during 2020 [12] Q&A Session Summary Question: Impact of COVID on commercial business - Management acknowledged significant impacts from COVID-19 but noted signs of recovery in the commercial sector, including taxi services and cruise lines [30][31] Question: Demand for Shield products - Management confirmed that initial sales filled immediate demand, and they are now focusing on expanding sales channels to meet growing demand [33] Question: Cash position and market cap - Management clarified that the company has approximately $66 million in cash after recent capital raises, expressing confusion over the market cap being close to cash levels [39][41] Question: Acquisitions and stock usage - Management is open to various deal structures for acquisitions but is cautious about using stock due to current valuations [59] Question: ThermoVu product demand - Management reported strong ongoing demand for the ThermoVu product, which is expected to remain relevant beyond the pandemic [46] Question: Police Reform Act and growth potential - Management believes the Police Reform Act will drive growth in the law enforcement segment, with anticipated funding for body cameras [52]

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 [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 [ ] TRANSITION REPORT UNDER 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 na ...

Digital Ally, Inc. (NASDAQ:DGLY) Q3 2020 Earnings Conference Call November 12, 2020 11:15 AM ET Company Participants Stan Ross - Chief Executive Officer Tom Heckman - Chief Financial Officer Conference Call Participants Bryan Lubitz - Aegis Capital Rommel Dionisio - Aegis Capital Operator Ladies and gentlemen, thank you for standing by and welcome to the 2020 Third Quarter Operating Results Conference Call. At this time all participants are in a listen-only mode. After the speakers’ presentation, there will ...

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 DGLY the Nasdaq Capital Market, LLC FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020. or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___ ...