Company: DGLY
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001641172-25-024667
Chunk: 284

Company: DIGITAL ALLY, INC.
Filing Date: 2025-08-18
Form: 10-Q
Item: Part I, Item 2
Chunk 284
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 ended June 30, 2025 and 2024,
respectively, an improvement of $9,175,941 (102.5%).

Income Tax Benefit

We recorded an income tax
benefit of $-0- for the six months ended June 30, 2025 and 2024, respectively. The effective tax rate for both 2025 and 2024 varied from
the expected statutory rate due to our continuing to provide a 100% valuation allowance on net deferred tax assets. We determined that
it was appropriate to continue the full valuation allowance on net deferred tax assets as of June 30, 2025 and December 31, 2024 primarily
because of the recurring operating losses.

59

We have further determined
to continue providing a full valuation reserve on our net deferred tax assets as of June 30, 2025.

We had approximately $156,019,000
of federal net operating loss carryforwards and $1,742,000 of research and development tax credit carryforwards as of June 30, 2025 and
December 31, 2024 available to offset future net taxable income.

Net Loss

As a result of the above,
we reported net income (loss) of $(222,122) and $(8,953,819) for the six months ended June 30, 2025 and 2024, respectively, an improvement
of $8,731,697 (97.5%).

Net Income Attributable to Noncontrolling Interests
of Consolidated Subsidiary

The Company has a 51% equity
interest in its consolidated subsidiary, Nobility Healthcare. As a result, the noncontrolling shareholders or minority interest is allocated
49% of the income/loss of Nobility Healthcare which is reflected in the condensed consolidated statement of income (loss) as “net
income (loss) attributable to noncontrolling interests of consolidated subsidiary”. We reported net income attributable to noncontrolling
interests of consolidated subsidiary of $59,608 and $61,063 for the six months ended June 30, 2025 and 2024, respectively.

Net Loss Attributable to Common Stockholders

As a result of the above,
we reported a net loss of $(281,730) and $(9,014,882) for the six months ended June 30, 2025 and 2024, respectively, an improvement
of $8,733,152 (96.9