Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 147

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 147
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30, 2025  
    September
30, 2024 
  
    Cash and cash equivalents 
    $793,360  
    $415,131 
  
    Long-term restricted cash included in other assets 
     —  
     — 
  
    Total cash, cash equivalents and restricted cash in the statements of cash flows 
    $793,360  
    $415,131 

Goodwill
and Other Intangibles:

Goodwill
- In connection with acquisitions, the Company applies the provisions of ASC 805, Business Combinations, using the acquisition method
of accounting. The excess purchase price over the fair value of net tangible assets and identifiable intangible assets acquired is recorded
as goodwill. In accordance with ASC 350, Intangibles - Goodwill and Other, the Company assesses goodwill for impairment annually as of
December 31st, and more frequently if events and circumstances indicate that goodwill might be impaired.

Goodwill
impairment testing is performed at the reporting unit level. Goodwill is assigned to reporting units at the date the goodwill is initially
recorded. Once goodwill has been assigned to reporting units, it no longer retains its association with a particular acquisition, and
all of the activities within a reporting unit, whether acquired or internally generated, are available to support the value of the goodwill.

Traditionally,
goodwill impairment testing is a two-step process. Step one involves comparing the fair value of the reporting units to its carrying
amount. If the carrying amount of a reporting unit is greater than zero and its fair value is greater than its carrying amount, there
is no impairment. If the reporting unit’s carrying amount is greater than the fair value, the second step must be completed to
measure the amount of impairment, if any. Step two involves calculating an implied fair value of goodwill. The Company has adopted ASU
2017-04 which simplifies subsequent goodwill measurement by eliminating step two from the goodwill impairment test. As a result, the
Company compares the fair value of a reporting unit with its respective carrying value and recognizes an impairment charge for the amount
by which the carrying amount exceeded the reporting unit’s fair value.

The
Company determines the fair value of its reporting units using a weighting of the income and market valuation approaches. The income
approach applies a fair value methodology to each reporting unit based on discounted cash flows. This analysis requires significant judgments,
including estimation of future cash flows, which is dependent on internally-developed forecasts of revenue