Company: DGLY
Filing Date: 2025-02-14
Form Type: 424B4
Source: 0001493152-25-006704
Chunk: 271

Company: DIGITAL ALLY, INC.
Filing Date: 2025-02-14
Form: 424B4
Chunk 271
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 cycle management segment and
entertainment segment was $1,158,966 and $5,805,507, respectively
as of September 30, 2024.

Indefinite-lived intangible assets

We held indefinite-lived trade names/trademarks of $900,000 and $600,000 as of September 30, 2024 and December 31, 2023, respectively,
related to businesses within our entertainment segment.

During the three
months ended September 30, 2024, we concluded that the carrying amount of a trade name/trademark related to the entertainment
segment exceeded its estimated fair value and we recorded a non-cash impairment charge of $201,000,
which was included in goodwill and intangible asset impairment charge on our Condensed Consolidated Statements of Operations for the
three and nine months ended September 30, 2024. The charge was primarily driven by the split-off transaction not being completed
when and as expected and our recent revenue and operating performance of the related business given a decline in demand and overall
economic uncertainty. The remaining balance for this trade name/trademark was $699,000
as of September 30, 2024.

NOTE 9. COMMITMENTS AND CONTINGENCIES

Litigation

From time to time, we are notified that we may be a party to a lawsuit or that a claim is being made against us. It is our policy to not disclose the specifics of any claim or threatened lawsuit until the summons and complaint are actually served on us. After carefully assessing the claim, and assuming we determine that we are not at fault or we disagree with the damages or relief demanded, we vigorously defend any lawsuit filed against us. We record a liability when losses are deemed probable and reasonably estimable. When losses are deemed reasonably possible but not probable, we determine whether it is possible to provide an estimate of the amount of the loss or range of possible losses for the claim, if material for disclosure. In evaluating matters for accrual and disclosure purposes, we take into consideration factors such as our historical experience with matters of a similar nature, the specific facts and circumstances asserted, the likelihood of our prevailing, the availability of insurance, and the severity of any potential loss. We reevaluate and update accruals as matters progress over time.

On May 31, 2022, the Company filed a lawsuit against Culp McAuley, Inc. (“Culp McAuley”) and four individuals (Brandon Culp, Campbell McAuley, Mark