Digital Ally(DGLY) - 2024 Q3 - Quarterly Report

Revenue Performance - Total net revenues for Q3 2024 were $4,051,711, a decrease of 36% compared to $6,337,699 in Q3 2023[442] - Video Solutions segment revenue decreased to $1,196,362 in Q3 2024 from $1,797,348 in Q3 2023, representing a decline of 33.5%[442] - Revenue Cycle Management segment revenue slightly decreased to $1,601,792 in Q3 2024 from $1,636,543 in Q3 2023, a decline of 2.1%[442] - Entertainment segment revenue decreased significantly to $1,253,557 in Q3 2024 from $2,903,808 in Q3 2023, a decline of 56.7%[442] - Total revenue for the three months ended September 30, 2024, was $4,051,711, a decrease from $6,337,699 in the same period of 2023, representing a decline of approximately 36%[451] Profitability and Loss - Total gross profit for Q3 2024 was $1,739,974, compared to $1,226,149 in Q3 2023, an increase of 42%[442] - The company reported an operating loss of $7,382,299 for Q3 2024, compared to an operating loss of $5,148,043 in Q3 2023[442] - The company experienced a net loss of $5,470,712 on revenues of $4,051,711 for Q3 2024[445] - Gross profit for the same period was $1,739,974, with a gross profit margin of 42.9%, significantly up from 19.3% in September 2023[451] - Operating loss for the three months ended September 30, 2024, was $(7,382,299), compared to $(5,148,043) in the same period of 2023, reflecting a worsening of approximately 43%[451] - Net loss attributable to common stockholders for the three months ended September 30, 2024, was $(5,470,712), compared to $(3,679,043) in September 2023, indicating an increase in loss of approximately 49%[451] Expenses - Total selling, general, and administrative expenses increased to $9,122,273, compared to $6,374,192 in September 2023, marking an increase of approximately 43%[451] - Research and development expenses accounted for 5% of total revenue in September 2024, down from 9% in September 2023[453] - Selling, advertising, and promotional expenses were 10% of total revenue in September 2024, a decrease from 30% in the same period of 2023[453] Asset and Liabilities - Identifiable assets as of September 30, 2024, were $32,263,169, down from $47,028,809 as of December 31, 2023[444] - The company has no off-balance sheet debt or significant relationships with unconsolidated entities that may materially affect financial conditions[446] Impairments and Derivatives - The company reported a significant goodwill and intangible asset impairment charge of 119% of total revenue for the three months ended September 30, 2024[453] - The change in fair value of derivative liabilities was reported at 62% of total revenue for the three months ended September 30, 2024[453] Product Development - The company has diversified its product offerings with the introduction of ThermoVu™ and Shield™ lines in 2020[435] - The revenue cycle management segment has completed four acquisitions since its formation in 2021, enhancing its service capabilities[438]