What changed in this filing

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Item 1. Business

2023-03-31 compared with 2022-04-15 · 265 added, 344 removed, 224 unchanged (73% of the section changed)

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From that date until November 30, 2004, when we entered into a

Plan of Merger with Digital Ally, Inc., a Nevada corporation which was formerly known as Trophy Tech Corporation (the “Acquired

Company”), we had not conducted any operations and were a closely-held company.

Plan of Merger with Digital Ally, Inc., a Nevada corporation which was formerly known as Trophy Tech Corporation (the “Predecessor Registrant”), we had not conducted any operations and were a closely-held company.

In conjunction with the merger, we were renamed

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Our website address is www.digitalallyinc.com.

The contents of, or information

accessible through, our website are not part of this Annual Report on Form 10-K.

We make our filings with the SEC, including our Annual

Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports, as well as beneficial

ownership filings available free of charge on our website as soon as reasonably practicable after we file such reports with, or furnish

such reports to, the SEC.

Acquired Company, which was incorporated on May 16, 2003, engaged in the design, development, marketing and sale of bow hunting-related

Its principal product was a digital video recording system for use in the bow hunting industry.

We changed its business plan

in 2004 to adapt its digital video recording system for use in the law enforcement and security markets.

We began shipments of our in-car

digital video rear view mirror in March 2006.

Over the years, the Company developed additional products and services that complemented

its core digital video recording systems and broadened the scope of products and services available to its customers including an expansion

beyond the traditional law enforcement channel to include commercial users.

Company has recently expanded beyond its legacy business digital video recording system for use in the law enforcement and security markets

to two new reportable operating segments.

Currently, the Company’s reportable operating segments are:

1) the Video Solutions Segment,

2) the Revenue Cycle Management Segment and 3) the Ticketing Segment.

The Video Solutions Segment is our legacy business that produces

digital video imaging, storage products, disinfectant and related safety products for use in law enforcement, security and commercial

applications.

This segment includes both service and product revenues through our subscription models offering cloud and warranty solutions,

and hardware sales for video and health safety solutions.

The Revenue Cycle Management Segment provides working capital and back-office

services to a variety of healthcare organizations throughout the country, as a monthly service fee.

The Ticketing Segment acts as an

intermediary between ticket buyers and sellers within our secondary ticketing platform, Ticketsmarter.com, and we also acquire tickets

from primary sellers to then sell through various platforms.

The following table sets forth the Company’s total revenue and the

revenue derived from each reportable operating segment:

contents of, or information accessible through, our website are not part of this Annual Report on Form 10-K.

We make our filings with

the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to

those reports, as well as beneficial ownership filings available free of charge on our website as soon as reasonably practicable after

we file such reports with, or furnish such reports to, the SEC.

Our filings with the SEC are available to the public through the SEC’s website at www.sec.gov.

August 23, 2022 (the “Effective Time”), the Predecessor Registrant merged with and into its wholly owned subsidiary, DGLY

Subsidiary Inc., a Nevada corporation (the “Registrant”), pursuant to an agreement and plan of merger, dated as of August

23, 2022 (the “Merger Agreement”), between the Predecessor Registrant and the Registrant, with the Registrant as the surviving

corporation in the merger (such transaction, the “Merger”).

At the Effective Time, Articles of Merger were filed with the

Secretary of State of the State of Nevada, pursuant to which the Registrant was renamed “Digital Ally, Inc.” and, by operation

of law, succeeded to the assets, continued the business and assumed the rights and obligations of the Predecessor Registrant immediately

prior to the Merger.

Under the Nevada Revised Statutes, shareholder approval was not required in connection with the Merger Agreement

or the transactions contemplated thereby.

the Effective Time, pursuant to the Merger Agreement, (i) each outstanding share of Predecessor Registrant’s common stock, par

value $0.001 per share (the “Predecessor Common Stock”) automatically converted into one share of common stock, par value

$0.001 per share, of the Registrant (“Registrant Common Stock”), (ii) each outstanding option, right or warrant to acquire

shares of Predecessor Common Stock converted into an option, right or warrant, as applicable, to acquire an equal number of shares of

Registrant Common Stock under the same terms and conditions as the original options, rights or warrants, and (iii) the directors and

executive officers of the Predecessor Registrant were appointed as directors and executive officers, as applicable, of the Registrant,

each to serve in the same capacity and for the same term as such person served with the Predecessor Registrant immediately before the

For the purposes of this Annual

Report on Form 10-K, unless the context otherwise requires, (i) the term “our,” or “us” refers to the Predecessor

Registrant and its subsidiaries with respect to the period prior to the Effective Time and to the Registrant and its subsidiaries with

respect to the period on and after the Effective Time;

(ii) as of any period prior to the Effective Time, references to the “directors”

mean the directors of the Predecessor Registrant, and, as of any period at and after the Effective Time, the directors of the Registrant,

(iii) as of any period prior to the Effective Time, references to “stockholders” mean the holders of Predecessor Common Stock,

and, as of any period at and after the Effective Time, the holders of Registrant Common Stock, and (iv) as of any period prior to the

Effective Time, references to “Common Stock” means the Predecessor Common Stock, and, as of any period at and after the Effective

Time, Registrant Common Stock.

business of the Registrant, Digital Ally, Inc.

(with its wholly-owned subsidiaries, Digital Ally International, Inc., Shield Products,

LLC, Digital Ally Healthcare, LLC, TicketSmarter, Inc., Worldwide Reinsurance, Ltd., Digital Connect, Inc., BirdVu Jets, Inc., Kustom

440, Inc., and its majority-owned subsidiary Nobility Healthcare, LLC, collectively, “Digital Ally,” “Digital,”

and the “Company”), is divided into three reportable operating segments:

1) the Video Solutions Segment, 2) the Revenue Cycle

Management Segment and 3) the Entertainment Segment.

The Video Solutions Segment is our legacy business that produces digital video imaging,

storage products, disinfectant and related safety products for use in law enforcement, security and commercial applications.

includes both service and product revenues through our subscription models offering cloud and warranty solutions, and hardware sales

for video and health safety solutions.

The Revenue Cycle Management Segment provides working capital and back-office services to a variety

of healthcare organizations throughout the country, as a monthly service fee.

The Entertainment Segment acts as an intermediary between

ticket buyers and sellers within our secondary ticketing platform, ticketsmarter.com, and we also acquire tickets from primary sellers

to then sell through various platforms.

The accounting guidance on Segment Reporting establishes standards for reporting information

regarding operating segments in annual financial statements and requires selected information of those segments to be presented in financial

The following table sets forth the Company’s total revenue and the revenue derived from each reportable operating segment:

Years Ended December 31,

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Revenue Cycle Management

Entertainment

Total Net Revenues

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Solutions Operating Segment

Within the Video Solutions

reportable operating segment we supply technology-based products utilizing our portable digital video and audio recording capabilities

our video solutions operating segment we supply technology-based products utilizing our portable digital video and audio recording capabilities

for the law enforcement and security industries and for the commercial fleet and mass transit markets.

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Our products include:

the EVO-HD, DVM-800 and DVM-800 Lite, which are in-car digital video systems for law enforcement and

commercial markets;

the EVO-HD, DVM-800 and DVM-800 Lite, which are in-car digital video systems for law enforcement and commercial

the FirstVu body-worn camera line, consisting of the FirstVu Pro, FirstVu II, and the FirstVu HD;

our patented and revolutionary VuLink product, which integrates our body-worn cameras with our in-car systems by

providing hands-free automatic activation for both law enforcement and commercial markets;

the FLT-250, DVM-250, and DVM-250 Plus,

which are our commercial line of digital video mirrors that serve as “event recorders” for the commercial fleet and mass

transit markets;

FleetVu, EVO Web, and VuVault are our cloud-based evidence management systems.

We further diversified

and broadened our product offerings in 2020, by introducing two new lines of branded products:

(1) the ThermoVu®

which is a line of self-contained temperature monitoring stations that provides alerts and controls facility access when an individual’s

temperature exceeds a pre-set threshold and (2) our Shield™ disinfectants and cleansers which are for use against viruses and bacteria.

We began offering our Shield™ disinfectants and cleansers to our law enforcement and commercial customers late in the second quarter

our patented and revolutionary

VuLink product which integrates our body-worn cameras with our in-car systems by providing hands-free automatic activation for both law

enforcement and commercial markets;

the FLT-250, DVM-250, and DVM-250 Plus, which are our commercial line of digital video mirrors that

serve as “event recorders” for the commercial fleet and mass transit markets;

and FleetVu and VuLink, which are our cloud-based

evidence management systems.

We further diversified and broadened our product offerings in 2020, by introducing two new lines of branded

(1) the ThermoVu® which is a line of self-contained temperature monitoring stations that provides alerts and controls facility

access when an individual’s temperature exceeds a pre-set threshold and (2) our Shield™ disinfectants and cleansers which

are for use against viruses and bacteria.

video solutions segment revenue encompasses video recording products and services for our law enforcement and commercial customers and

the sale of Shield TM disinfectant and personal protective products.

This segment generates revenues through our subscription

models offering cloud and warranty solutions, and hardware sales for video and personal protective safety products and solutions.

for product sales are recognized upon delivery of the product, and revenues from our cloud and warranty subscription plans are deferred

over the term of the subscription, typically 3 or 5 years.

Cycle Management Operating Segment

entered the revenue cycle management operating segment late in the second quarter of 2021 with the formation of our wholly owned

subsidiary, Digital Ally Healthcare, Inc.

and its majority-owned subsidiary Nobility Healthcare, LLC (“Nobility Healthcare”).

Nobility Healthcare completed its first acquisition on June 30, 2021, when it acquired a private medical billing company, and a second

acquisition on August 31, 2021 upon the completion of its acquisition of another private medical billing company, in which we will assist

in providing working capital and back-office services to healthcare organizations throughout the country.

Our assistance consists of

insurance and benefit verification, medical treatment documentation and coding, and collections.

Through our expertise and experience

in this field, we maximize our customers’ service revenues collected, leading to substantial improvements in their operating

margins and cash flows.

plan to continue growing our revenue cycle management operating segment primarily through a roll-up strategy.

Our revenue cycle management

operating segment’s acquisition targets include the approximate 6,000 medical billing companies in the United States, most of which

are relatively small and closely-held private concerns.

Each year a portion of these company owners sell because they want to retire

or exit the business for other pursuits.

The revenue cycle management market is quite fragmented with the largest companies having less

than an estimated 5% of the total market.

The Company formed the revenue cycle management operating segment and will provide the capital

to make acquisitions and pursue the revenue cycle management company roll-up strategy.

completion of the acquisitions our revenue cycle management operating segment processes and submits the medical reimbursement claims

of its physician clients to commercial health insurance companies and Medicare/Medicaid for the services the physicians have rendered

to their patients so they can receive payments.

Our revenue cycle management operating segment receives a percentage of the cash collected

for its service fees.

The revenue cycle management agreements with physician clients generally renew automatically on an annual basis.

We entered the revenue cycle management

business late in the second quarter of 2021 with the formation of our wholly owned subsidiary, Digital Ally Healthcare, Inc.

and its majority-owned

subsidiary Nobility Healthcare, LLC (“Nobility Healthcare”).

Nobility Healthcare completed its first acquisition on June 30,

2021, when it acquired a private medical billing company, and has since completed three more acquisitions of private medical billing companies,

in which we assist in providing working capital and back-office services to healthcare organizations throughout the country.

Our assistance

consists of insurance and benefit verification, medical treatment documentation and coding, and collections.

Through our expertise and

experience in this field, we aim to maximize our customers’ service revenues collected, leading to substantial improvements in their

operating margins and cash flows.

revenue cycle management segment consists of our medical billing subsidiaries.

Revenues of this segment are recognized after we perform

the obligations of our revenue cycle management services.

Our revenue cycle management services are services, performed and charged monthly,

generally based on a contractual percentage of total customer collections, for which we recognize our net service fees.

Entertainment

Operating Segment

entered into the ticketing operating segment through the formation of our wholly owned subsidiary, TicketSmarter, Inc.

have also entered into live entertainment and events ticketing services through the formation of our wholly owned subsidiary, TicketSmarter, Inc.

(“TicketSmarter”)

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partnerships, and mainly, ticket resale services through its online ticketing marketplace for live events, TicketSmarter.com.

TicketSmarter offers tickets for over 125,000 live events through its platform, for a wide range of events, including concerts, sporting

events, theatres, and performing arts, throughout the country.

TicketSmarter

has grown rapidly since its launch in early 2019, and currently boasts more than 48 million tickets for sale over 125,000 live events,

primarily serving the North American market.

It has built its brand with a number of high-profile partnerships, which include being the

official ticket resale partner of Rose Bowl Stadium in California and the title sponsor of the TicketSmarter Birmingham Bowl.

the official ticket resale partner of more than 35 collegiate conferences and 250 individual universities.

Goody Tickets was launched

as a ticket brokerage nearly a decade earlier in Overland Park, Kansas, where it has remained.

Company plans to grow the Ticketing operating segment through organic growth of its existing business lines.

The Company will also provide

the working capital necessary to expand its sponsorships and partnerships with other sporting teams and other entertainment venues and

organizations,

– 19 Pandemic

COVID-19 pandemic represents a fluid situation that presents a wide range of potential impacts of varying durations for different global

geographies, including locations where the Company has offices, employees, customers, vendors and other suppliers and business partners.

most US-based businesses, the COVID-19 pandemic and efforts to mitigate the same began to have impacts on our business in March 2020.

Since that time, the COVID-19 pandemic has dramatically impacted the global health and economic environment, including millions of

confirmed cases, business slowdowns or shutdowns, labor shortages, supply chain challenges, changes in government spending and requirements,

regulatory challenges, inflationary pressures and market volatility.

We operate within the complex

integrated global supply chain for both vendors and customers.

As the COVID-19 pandemic dissipates at varying times and rates in different

regions around the world, there could be a prolonged negative impact on these global supply chains.

Our ability to continue operations

at specific facilities will be impacted by the interdependencies of the various participants of these global supply chains, which are

largely beyond our direct control.

A prolonged shut down of these global supply chains could have a material adverse effect on our business,

results of operations, cash flows and financial condition.

If our suppliers have increased

challenges with their workforce (including as a result of illness, absenteeism, reactions to health and safety or government requirements),

facility closures, timely access to necessary components, materials and other supplies at reasonable prices, access to capital, and access

to fundamental support services (such as shipping and transportation), they may be unable to provide the agreed-upon goods and services

in a timely, compliant and cost-effective manner.

We have incurred and may in the future incur additional costs and delays in our business

resulting from the COVID-19 pandemic, including as a result of higher prices, schedule delays or the need to identify and develop alternative

In some instances, we may be unable to identify and develop alternative suppliers, incurring additional liabilities under

our current contracts and hampering new ones.

Our customers have experienced, and may continue to experience, disruptions in their operations

and supply chains as a result of the COVID-19 pandemic, which can result in delayed, reduced, or canceled orders, or collection risks,

and which may adversely affect our results of operations.

Similarly, current, and future restrictions or disruptions of transportation,

such as reduced availability of air transport, port closures or delays, and increased border controls, delays or closures, can also impact

our ability to meet demand and could materially adversely affect us.

spread of COVID-19 caused us to modify our business practices (including employee travel, employee work locations, cancellation of physical

participation in meetings, events and conferences, and social distancing measures), and we may take further actions as may be required

by government authorities or that we determine are in the best interests of our employees, customers, partners, vendors, and suppliers.

Although we managed to continue most of our operations, the future course of the COVID-19 pandemic is uncertain and we cannot assure

that this global pandemic, including its economic impact, will not have a material adverse impact on our business, financial position,

results of operations and/or cash flows.

offers tickets for over 125,000 live events through its platform, for a wide range of events, including concerts, sporting events, theatres,

and performing arts, throughout the country.

entertainment operating segment consists of ticketing services provided through TicketSmarter and its online platform, TicketSmarter.com.

Revenues of this segment include ticketing service charges generally determined as a percentage of the face value of the underlying ticket

and ticket sales from our ticket inventory which are recognized when the underlying tickets are sold.

Ticketing direct expenses include

the cost of tickets purchased for resale by the Company and held as inventory, credit card fees, ticketing platform expenses, website

maintenance fees, along with other administrative costs.

Video Operating Segment Products and Services

our video operating segment we supply technology-based products utilizing our portable digital video and audio recording

capabilities for the law enforcement and security industries and for the commercial fleet and mass transit markets.

ability to integrate electronic, radio, computer, mechanical, and multi-media technologies to create positive solutions to our

customers’ requests.

our video operating segment we supply technology-based products utilizing our portable digital video and audio recording capabilities

for the law enforcement and security industries and for the commercial fleet and mass transit markets.

We have the ability to integrate

electronic, radio, computer, mechanical, and multi-media technologies to create positive solutions to our customers’ requests.

Our products include:

the EVO-HD, DVM-800 and DVM-800 Lite, which are in-car digital video systems for

law enforcement and commercial markets;

the FirstVu body-worn camera line, consisting of the FirstVu Pro, FirstVu, and the FirstVu

our patented and revolutionary VuLink product integrates our body-worn cameras with our in-car systems by providing hands-free

automatic activation for both law enforcement and commercial markets;

the FLT-250, DVM-250, and DVM-250 Plus, which are our

commercial line of digital video mirrors that serve as “event recorders” for the commercial fleet and mass transit

and FleetVu and VuLink, which are our cloud-based evidence management systems.

We further diversified and broadened our

product offerings in 2020, by introducing two new lines of branded products:

(1) the ThermoVu® which is a line of self-contained

temperature monitoring stations that provides alerts and controls facility access when an individual’s temperature exceeds a

pre-set threshold and (2) our Shield™ disinfectants and cleansers which are for use against viruses and bacteria.

offering our Shield™ disinfectants and cleansers to our law enforcement and commercial customers late in the second quarter of

We have recently entered the revenue

cycle management business late in the second quarter of 2021 with the formation of our wholly owned subsidiary,

Digital Ally Healthcare, Inc.

and its majority-owned subsidiary Nobility Healthcare.

Nobility Healthcare completed its first acquisition on June 30, 2021, when it acquired a private medical billing company, and a

second acquisition on August 31, 2021, upon the completion of its acquisition of another private medical billing company, in which

we will assist in providing working capital and back-office services to healthcare organizations throughout the country.

Additionally, through the formation of our wholly owned subsidiary, TicketSmarter and its

completed acquisitions of Goody Tickets, LLC and TicketSmarter, LLC, on September 1, 2021, we have entered into the online ticketing

marketplace for live events, through the online platform TicketSmarter.com.

the EVO-HD, DVM-800 and DVM-800 Lite, which are in-car digital video systems for law enforcement and commercial

the FirstVu body-worn camera line, consisting of the FirstVu Pro, FirstVu, and the FirstVu HD;

our patented and revolutionary

VuLink product integrates our body-worn cameras with our in-car systems by providing hands-free automatic activation for both law enforcement

and commercial markets;

the FLT-250, DVM-250, and DVM-250 Plus, which are our commercial line of digital video mirrors that serve as

“event recorders” for the commercial fleet and mass transit markets;

and FleetVu and VuLink, which are our cloud-based evidence

management systems.

We further diversified and broadened our product offerings in 2020, by introducing two new lines of branded products:

(1) the ThermoVu® which is a line of self-contained temperature monitoring stations that provides alerts and controls facility access

when an individual’s temperature exceeds a pre-set threshold and (2) our Shield™ disinfectants and cleansers which are for

use against viruses and bacteria.

Digital Video Mirror System for Law Enforcement – EVO-HD, DVM-800 and DVM-800 Lite

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in-car system that delivers versatility and reliability for law enforcement.

With built-in, patented auto-activation technology, EVO-HD

captures multiple recording angles in sync from a FirstVu PRO or FirstVu HD body-worn camera and up to four HD in-car cameras –

all from a single trigger.

The EVO-HD maximizes space and offers top-end reliability when paired with remote service capabilities.

An internal cell modem will allow for connectivity to the VuVault.net cloud, powered by Amazon Web Services (“AWS”) and real

time metadata when in the field.

Company offers the DVM-800, a continuation in the

family of highly successful digital video mirrored (DVM) systems developed by the Company.

The DVM-800 is a time-tested, compact,

powerful and easy-to-use solution designed for law enforcement.

The DVM-800 system has built-in road and driver facing

cameras and can record up to two external HD cameras.

The DVM-800 is compatible with the patented VuLink® auto-activation technology

and can be paired with a FirstVu HD body-worn camera.

Company also offers the DVM-800 Lite, an entry level system is a self-contained video recorder, microphone and digital storage

system that is integrated into a rear-view mirror and is designed for law enforcement.

built-in, patented auto-activation technology, EVO-HD captures multiple recording angles in sync from a FirstVu PRO or FirstVu HD body-worn

camera and up to four HD in-car cameras – all from a single trigger.

The EVO-HD maximizes space and offers top-end reliability

when paired with remote service capabilities.

An internal cell modem will allow for connectivity to the VuVault.net cloud, powered by

Amazon Web Services (“AWS”) and real time metadata when in the field.

Company offers the DVM-800, a continuation in the family of highly successful digital video mirrored (DVM) systems developed by the Company.

The DVM-800 is a time-tested, compact, powerful and easy-to-use solution designed for law enforcement.

The DVM-800 system has built-in

road and driver facing cameras and can record up to two external HD cameras.

The DVM-800 is compatible with the patented VuLink®

auto-activation technology and can be paired with a FirstVu HD body-worn camera.

Company also offers the DVM-800 Lite, an entry level system is a self-contained video recorder, microphone and digital storage system

that is integrated into a rear-view mirror and is designed for law enforcement.

The system can record up to two internal HD cameras.

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application and inherent risks.

DVM-250 Plus is a part of the DVM family and is designed for commercial fleets featuring built-in digital audio

and video recording technology and other features to provide commercial fleet managers unmatched driver and asset management –

all while delivering the return on investment that matters most:

DVM-250 Plus is a part of the DVM family and is designed for commercial fleets featuring built-in digital audio and video recording technology

and other features to provide commercial fleet managers unmatched driver and asset management – all while aiming to deliver the return

on investment that matters most:

the safety and security of drivers and passengers.

The DVM-250 Plus

is designed to capture events, such as wrecks and erratic driving or other abnormal occurrences, for evidentiary or training purposes.

The commercial fleet markets may find our units attractive from both a feature and a cost perspective compared to other providers.

to our marketing efforts, commercial fleets are beginning to adopt this technology, and in particular, the ambulance and taxi-cab

The DVM-250 Plus is designed to capture events, such

as wrecks and erratic driving or other abnormal occurrences, for evidentiary or training purposes.

The commercial fleet markets may find

our units attractive from both a feature and a cost perspective compared to other providers.

Due to our marketing efforts, commercial

fleets are beginning to adopt this technology, and in particular, the ambulance and taxi-cab markets.

the first quarter of 2021, Digital Ally released the FLT-250, offering the same great features of the DVM-250 Plus in a new compact,

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We believe that, due to

non-mirror-based aspect of this product, the FLT-250 will become more attractive for our potential customers, as it

is a much simpler plug and play option compared to mirror-based products.

non-mirror-based aspect of this product, the FLT-250 will become more attractive for our potential customers, as it is a much simpler

plug and play option compared to mirror-based products.

Ally offers a suite of data management web-based tools to assist fleet managers in the organization, archival, and management of videos

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serve as training tools for teams on safety, and, ultimately, generate a significant return on investment for the organization.

Company’s management expects EVO-HD to become the platform for a new family of in-car video solution products for the commercial

The innovative EVO-HD technology is expected to replace the current in-car mirror-based systems with a miniaturized system that

can be custom-mounted in the vehicle, while offering numerous hardware configurations to meet the varied needs and requirements of the

Company’s commercial customers.

In its commercial market application, the EVO-HD can support up to four HD cameras, with two cameras

having pre-event and ECA capabilities to allow customers to review entire shifts.

An internal cell modem will allow for connectivity

to the FleetVu Manager cloud-based system for commercial fleet tracking and monitoring, which is powered by AWS and real time metadata

when in the field.

Body-Worn Digital Video System – FirstVu Pro, FirstVu II, and FirstVu HD for Law Enforcement and Private Security

2021, Digital Ally launched two next generation body-worn cameras and docking stations, refreshing the Company’s complete

ecosystem of evidence recording devices.

The latest body worn camera launched by the Company is the FirstVu Pro, the Company’s

flagship product in its family of next generation of technology.

The light weight, one-piece unit captures full HD video and audio, while

offering industry leading features such as live streaming, a full-color touchscreen display, an advanced image sensor with IR

LEDs, proprietary image distortion reduction, IP67 rated resisting dust & wind and is water submersible for 30 minutes at a depth

It is also MIL-STD-810G compliant capable of handling drops, shock, and vibration;

and will function flawlessly

in a wide temperature range.

We expect the EVO-HD to become

the platform for a new family of in-car video solution products for the commercial markets.

The innovative EVO-HD technology is expected

to replace the current in-car mirror-based systems with a miniaturized system that can be custom-mounted in the vehicle, while offering

numerous hardware configurations to meet the varied needs and requirements of our commercial customers.

In its commercial market application,

the EVO-HD can support up to four HD cameras, with two cameras having pre-event and ECA capabilities to allow customers to review entire

An internal cell modem will allow for connectivity to the FleetVu Manager cloud-based system for commercial fleet tracking and

monitoring, which is powered by AWS and real time metadata when in the field.

Digital Video System – FirstVu Pro, FirstVu II, and FirstVu HD for Law Enforcement and Private Security

2021, Digital Ally launched two next generation body-worn cameras and docking stations, refreshing the Company’s complete ecosystem

of evidence recording devices.

The latest body worn camera launched by the Company is the FirstVu Pro, the Company’s flagship product

in its family of next generation of technology.

The light weight, one-piece unit captures full HD video and audio, while offering industry

leading features such as live streaming, a full-color touchscreen display, an advanced image sensor with IR LEDs, proprietary image distortion

reduction, IP67 rated resisting dust and wind and is water submersible for 30 minutes at a depth of 3 feet.

It is also MIL-STD-810G

compliant capable of handling drops, shock, and vibration, and will function flawlessly in a wide temperature range.

addition to the FirstVu Pro, Digital Ally also added the FirstVu II to its family of next generation technology.

II is a one-piece device offering industry leading technology such as an articulating camera head, a full-color display, an advanced

image sensor, and GPS.

The FirstVu II is a

one-piece device offering industry leading technology such as an articulating camera head, a full-color display, an advanced image sensor,

It can be used in law enforcement, private and event security and commercial segments.

Ally still carries the FirstVu HD, the two-piece body-worn camera which allows for multiple mounting options while minimizing

space and weight.

Ally still carries the FirstVu HD, the two-piece body-worn camera which allows for multiple mounting options while minimizing space and

It can be used in law enforcement, private and event security and commercial segments.

This system is also a

derivative of our in-car video systems, but is much smaller and lighter and more rugged and water-resistant to handle a hostile outdoor

The FirstVu HD can be used in many applications in addition to law enforcement and private security and is

designed specifically to be clipped to an individual’s pocket or other outer clothing.

The unit is self-contained and requires

no external battery or storage devices.

Our FirstVU HD integrates with our in-car video systems through our patented VuLink system allowing

for automatic activation of both systems.

This system is also a derivative of our

in-car video systems, but is much smaller and lighter and more rugged and water-resistant to handle a hostile outdoor environment.

FirstVu HD can be used in many applications in addition to law enforcement and private security and is designed specifically to be clipped

to an individual’s pocket or other outer clothing.

The unit is self-contained and requires no external battery or storage devices.

Our FirstVU HD integrates with our in-car video systems through our patented VuLink system allowing for automatic activation of both

the newly introduced body-worn cameras, Digital Ally also introduced two new QuickVu docking stations compatible with the FirstVu PRO

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touchscreen display, and is available in eight or twenty-four individual docking bays.

For docking with the FirstVu HD body-worn

cameras, Digital Ally offers a 12-bay docking station and Mini-Docks.

The 12-bay docking station includes a 1TB local memory hard

drive which simultaneously upload 4 hours of video from 12 FirstVu HD cameras within a 15-minute shift change and push configuration

The Mini-Dock is a single unit, portable smart dock that uploads video evidence to VuVault from a FirstVu HD body camera.

For docking with the FirstVu HD body-worn cameras,

Digital Ally offers a 12-bay docking station and Mini-Docks.

The 12-bay docking station includes a 1TB local memory hard drive which

simultaneously upload 4 hours of video from 12 FirstVu HD cameras within a 15-minute shift change and push configuration updates.

Mini-Dock is a single unit, portable smart dock that uploads video evidence to VuVault from a FirstVu HD body camera.

Auto-activation

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(the “USPTO”) has recognized these pioneering efforts by granting us multiple patents with claims covering a variety of triggers,

incuding emergency lights and sirens, extreme acceleration or braking, g-force or any 12-volt relay.

including emergency lights and sirens, extreme acceleration or braking, g-force or any 12-volt relay.

Additionally, the awarded patent

claims cover automatic coordination between multiple recording devices.

Prior to our VuLink ecosystem, officers had to

manually activate each device while responding to emergency scenarios, a requirement that both decreased the usefulness of the existing

camera systems and diverted officers’ attention during critical moments.

Prior to our VuLink ecosystem, officers had to manually activate

each device while responding to emergency scenarios, a requirement that both decreased the usefulness of the existing camera systems

and diverted officers’ attention during critical moments.

Web and FleetVu Manager

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unit configuration and management, running customizable reports and maintaining a chain of custody logs.

AWS is the most

secure cloud platform on the market with features that go beyond simply storing and reviewing video evidence.

AWS GovCloud platform

is trusted by the Department of Justice, Defense Digital Services for the US Air Force, U.S.

Department of Treasury, U.S.

of Homeland Security.

AWS is the most secure

cloud platform on the market with features that go beyond simply storing and reviewing video evidence.

AWS GovCloud platform is

trusted by the Department of Justice, Defense Digital Services for the US Air Force, U.S.

Department of Treasury, and U.S.

Department of Homeland Security.

Our products that are compatible with EVO Web include:

FirstVu Pro, FirstVu II, FirstVu HD, QuickVu,

EVO-HD, DVM-800 and DVM-800 Lite.

FirstVu Pro, FirstVu II, FirstVu HD,

QuickVu, EVO-HD, DVM-800 and DVM-800 Lite.

Manager is a web-based software that provides commercial fleet managers with the tools to increase driver safety, track assets in real-time

and minimize their companies’ liability risks.

FleetVu Manager is able to generate driver reports, identify at risk

behaviors before an incident takes place, and enable commercial fleet managers to manage the entire fleet through a single, easy

to use platform.

Our products compatible with FleetVu Manager include:

FleetVu Manager is able to generate driver reports, identify at risk behaviors before

an incident takes place, and enable commercial fleet managers to manage the entire fleet through a single, easy to use platform.

products compatible with FleetVu Manager include:

DVM-250 and FLT-250.

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Shield Electrostatic Sprayer, Shied Disinfectant, and a variety of personal protection equipment including masks, gloves and sanitizer

Cleansers is a full line of safe and effective hypochlorous acid (HOCl) based products - and is free of toxic bleach, ammonia,

methanol, ethanol, and alcohol ingredients.

Shield Disinfectant is EPA approved and has shown effectiveness against SARS-COV-2, the virus

that causes the novel COVID-19 disease.

Other products in the Shield brand include animal wellness products, wound care, and household

cleaning solutions.

Cleansers is a full line of safe and effective hypochlorous acid (HOCl) based products - and is free of toxic bleach, ammonia, methanol,

ethanol, and alcohol ingredients.

Shield Disinfectant is EPA approved and has shown effectiveness against SARS-COV-2, the virus that

causes the novel COVID-19 disease.

Other products in the Shield brand include animal wellness products, wound care, and household cleaning

is a non-contact temperature-screening instrument that measures temperature through the wrist and controls entry to facilities when temperature

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each other and affix to surfaces more evenly, eliminating large droplets for better disinfecting coverage.

It is ideal for use

in office buildings, schools, and other populated areas.

Company has been distributing other personal protective equipment and supplies, since the second quarter of 2021, such

as masks and gloves to supplement its Shield brand of products to health care workers as well as other consumers, consisting of vinyl

and nitrile gloves, level 3 and N95 NIOSH certified face masks, and disposable wipes.

It is ideal for use in office

buildings, schools, and other populated areas.

Company has been distributing other personal protective equipment and supplies, since the second quarter of 2021, such as masks and gloves

to supplement its Shield brand of products to health care workers as well as other consumers, consisting of vinyl and nitrile gloves,

level 3 and N95 NIOSH certified face masks, and disposable wipes.

Revenue Management Operating Segment Products and Services

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of the service revenues collected by our customers.

Ticketing Operating Segment Products and Services

our ticketing segment, we provide customers with access to the online live event ticketing marketplace through our

online platform - TicketSmarter.com .

Offering over 48 million tickets for sale for over 125,000 live events TicketSmarter is a

national ticket marketplace offering tickets for live events featuring sports, concerts and theatre.

TicketSmarter is the official ticket

resale partner of more than 35 collegiate conferences, over 300 universities, and hundreds of events and venues.

ticketing operating segment primarily receives compensation for its services generally determined as a percentage of the face-value of

the tickets being purchased.

Our ticketing operating segment also provides customers with access to tickets which it has purchased or

received in return for its sponsorship or partnership from the venue, event or owner.

Entertainment Operating Segment Products and Services

our entertainment segment, we provide customers with access to the online live event ticketing marketplace through our online platform

- TicketSmarter.com .

Offering over 48 million tickets for sale for over 125,000 live events, TicketSmarter is a national ticket

marketplace offering tickets for live events featuring sports, concerts and theatre.

TicketSmarter is the official ticket resale partner

of more than 35 collegiate conferences, over 300 universities, and hundreds of events and venues.

entertainment operating segment primarily receives compensation for its services generally determined as a percentage of the face-value

of the tickets being purchased.

Our entertainment operating segment also provides customers with access to tickets which it has purchased

or received in return for its sponsorship or partnership from the venue, event or owner.

and Industry Overview – Video Solutions Operating Segment

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FleetVu Manager can become a significant revenue producer for us.

Additionally, our body-worn cameras have applications

in law enforcement, along with private and event security, as well as commercial segments.

With the recent acquisitions we completed

in 2021, we hope to utilize the connections we now have to live events, stadiums, and arenas, as well as new medical connections.

Additionally, our body-worn cameras have applications in law enforcement,

along with private and event security, as well as commercial segments.

With the recent acquisitions we completed in 2021, we hope to

utilize the connections we now have to live events, stadiums, and arenas, as well as new medical connections.

and Industry Overview – Revenue Cycle Management Operating Segment

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Our current market includes many diverse specialties,

including radiology, oncology, orthopedics, pediatrics, internal medicine, and cariology.

We continue to investigate

ways to expand our market reach, although can make no assurances in that regard.

and Industry Overview – Ticketing Operating Segment

ticketing segment refers to the sale of event tickets primarily through our online and mobile platforms.

We will buy inventory of event

ticket to then sell tickets through various platforms, including our own.

Our resale services refer to the sale of tickets by a holder,

who originally obtained the tickets directly from a venue or entity, through our platform in which we then collect services fees on the

including radiology, oncology, orthopedics, pediatrics, internal medicine, and cardiology.

We continue to investigate ways to expand our

market reach, although can make no assurances in that regard.

and Industry Overview – Entertainment Operating Segment

entertainment segment refers to the sale of event tickets primarily through our online and mobile platforms.

We will buy inventory of

event ticket to then sell tickets through various platforms, including our own.

Our resale services refer to the sale of tickets by a

holder, who originally obtained the tickets directly from a venue or entity, through our platform in which we then collect services fees

on the transaction.

This is commonly referred to as secondary ticketing.

We work directly with consumers looking to buy or sell event tickets

for particular shows, concerts, games, and other events, allowing a simple and effective platform to move tickets.

We work directly with consumers looking to buy or sell event

tickets for particular shows, concerts, games, and other events, allowing a simple and effective platform to move tickets.

We also currently

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We face similar and intense competitive factors for our

event recorders in the commercial fleet and private security markets as we do in the law enforcement and security surveillance

event recorders in the commercial fleet and private security markets as we do in the law enforcement and security surveillance markets.

There can be no assurance that we will be able to compete successfully in these markets.

Further, there can be no assurance

that new and existing companies will not enter the law enforcement and security surveillance markets in the future.

The commercial fleet

security and surveillance markets likewise are also very competitive.

There are direct competitors for our FLT-250 and DVM-250

Plus “event recorders,” which may have greater financial, technical marketing, and manufacturing resources than we do.

primary competitors in the commercial fleet sector include Lytx, Inc.

Further, there can be no assurance that new

and existing companies will not enter the law enforcement and security surveillance markets in the future.

The commercial fleet security

and surveillance markets likewise are also very competitive.

There are direct competitors for our FLT-250 and DVM-250 Plus “event

recorders,” which may have greater financial, technical marketing, and manufacturing resources than we do.

Our primary competitors

in the commercial fleet sector include Lytx, Inc.

(previously DriveCam, Inc.) and SmartDrive Systems, among others.

Competition – Revenue Cycle Management

Operating Segment

– Revenue Cycle Management Operating Segment

revenue cycle management segment is a highly competitive market that is only intensifying as the market continues to grow.

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providers exist and offer similar services through software vendors, traditional consultants, and information technology sources.

Competition – Ticketing Operating

ticketing segment faces robust competition from several sources throughout the industry.

As the online and mobile ticketing market continues

to increase, it has allowed for more technology-based companies to offer ticketing services and systems.

The online environment consists

of numerous other websites and platforms for all markets.

With the market continuing to grow, resale marketplaces and websites can reach

a vastly larger audience with more convenient access to tickets for a wide variety of events.

We continue to build our brand and recognition,

through the numerous partnerships and sponsorships throughout the country, in attempt to become a preferred platform for consumers.

– Entertainment Operating Segment

entertainment segment faces robust competition from several sources throughout the industry.

As the online and mobile ticketing market

continues to increase, it has allowed for more technology-based companies to offer ticketing services and systems.

The online environment

consists of numerous other websites and platforms for all markets.

With the market continuing to grow, resale marketplaces and websites

can reach a vastly larger audience with more convenient access to tickets for a wide variety of events.

We continue to build our brand

and recognition, through the numerous partnerships and sponsorships throughout the country, in attempt to become a preferred platform

for consumers.

Reinsurance Ltd.

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Property – Video Solutions Operating Segment

video solutions operating segment’s ability to compete effectively will depend on our success in protecting our proprietary

technology, both in the United States and abroad.

We have filed for patent protection in the United States and certain other countries

to cover certain design aspects of our products.

video solutions operating segment’s ability to compete effectively will depend on our success in protecting our proprietary technology,

both in the United States and abroad.

We have filed for patent protection in the United States and certain other countries to cover certain

design aspects of our products.

of our patent applications are still under review by the USPTO and, therefore, we have not yet been issued all the patents that we applied

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know-how and does not depend heavily on any proprietary technology or patents.

Property – Ticketing Operating Segment

ticketing operating segment’s ability to compete effectively primarily depends on our trade secrets and know-how and does not depend

heavily on any proprietary technology or patents.

of December 31, 2021, Digital Ally, and its subsidiaries, had approximately full-time 146 employees spread throughout the country, representing

the core values and objectives of the Company.

These employees are spread amongst our operating segments as follows:

Property – Entertainment Operating Segment

entertainment operating segment’s ability to compete effectively primarily depends on our trade secrets and know-how and does not

depend heavily on any proprietary technology or patents.

of December 31, 2022, Digital Ally, and its subsidiaries, had approximately 201 full-time employees spread throughout the

country, representing the core values and objectives of the Company.

These employees are spread amongst our operating segments as

Employee headcount:

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Revenue Cycle Management [1]

Entertainment

Total Employee Headcount

Our revenue cycle management operating segment has no direct employees.

Nobility Healthcare, LLC, our minority interest partner provides

Nobility Healthcare, our minority interest partner provides

all human capital resources to manage and operate the Company’s revenue cycle management operating segment.

Our employees are our most important assets and they set the foundation for our ability

to achieve our strategic objectives.

All of our employees contribute to Digital Ally’s success and, in particular, the employees

in our manufacturing, sales, research and development, and quality assurance departments are instrumental in driving operational execution

and strong financial performance, advancing innovation and maintaining a strong quality and compliance program.

employees are our most important assets and they set the foundation for our ability to achieve our strategic objectives.

All of our employees

contribute to Digital Ally’s success and, in particular, the employees in our manufacturing, sales, research and development, and

quality assurance departments are instrumental in driving operational execution and strong financial performance, advancing innovation

and maintaining a strong quality and compliance program.

employees are not covered by any collective bargaining agreement, and we have never experienced a work stoppage.

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employees to select the options that meet their needs.

Health and Safety:

the health and safety of our employees are top priorities, which was emphasized this year amidst the global COVID-19

Digital Ally is committed to operating in a safe, secure and responsible manner for the benefit of its employees, customers

and communities Digital Ally serves.

Our safety focus is evident in our response to the COVID-19 pandemic:

work from home flexibility;

regular communication regarding impacts of the COVID-19 pandemic, including health and safety protocols and procedures;

temperature screening of employees at the majority of our manufacturing facilities;

cleaning protocols across all locations;

additional personal protective equipment and cleaning supplies;

protocols to address actual and suspected COVID-19 cases and potential exposure;

by-laws require that a quorum, generally consisting of a majority of the outstanding shares of voting stock, be represented in person,

by telephone or by proxy in order to transact business at a meeting of our stockholders.

Failure to meet a quorum or obtain stockholder

approval can prevent us from taking certain actions that may be in the best interest of the Company and our stockholders.

substantial majority of our shares of Common Stock are held by retail investors, and it may be difficult to communicate with the beneficial

holders of those shares to obtain votes.

In 2021, we were unable to obtain a quorum at four scheduled special meetings and annual meetings,

which we believe hindered our ability to elect directors and increase the number of authorized shares.

Obtaining a quorum at future stockholder

meetings and obtaining necessary stockholder approvals will depend in part upon the willingness of an extensive number of smaller stockholders

to continue participating in such meetings, and we cannot be assured that participation in the past will continue in the future.

result, we may be unable to obtain a quorum at future annual or special meetings of stockholders or obtain stockholder approval of proposals

if we obtain a quorum at our stockholder meetings, we may not obtain enough votes to approve matters to be resolved upon at those meetings.

For example, a proposal to ratify our selection of RBSM, LLP as the Company’s independent registered public accountants for the

fiscal year ending December 31, 2021, failed to receive sufficient votes to pass at the 2021 annual meeting of our stockholders.

broker-dealers may only vote shares absent direction from the beneficial owner on certain specified “routine” matters, such

as the ratification of our auditors.

If our stockholders do not instruct their brokers on how to vote their shares on “non-routine”

matters, then we may not obtain the necessary number of votes for approval.

Any future revisions to SEC or Nasdaq rules that further

limit matters for which broker discretionary voting is allowed may further harm our ability to obtain a quorum and stockholder approval

of certain matters.

Therefore, it is possible that even if we are able to obtain a quorum for our meetings of stockholders, we still

may not receive enough votes to approve proxy proposals presented at such meetings and, depending on the proposal in question, including

if a proposal is submitted to our stockholders to increase the number of authorized shares of Common Stock or Preferred Stock, such failure

could have a material adverse effect on us.

Staff Comments.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business