Company: DGLY
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001641172-25-024667
Chunk: 139

Company: DIGITAL ALLY, INC.
Filing Date: 2025-08-18
Form: 10-Q
Item: Part I, Item 8
Chunk 139
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5  
    June 30,  2024 
  
    Cash and cash equivalents 
    $622,820  
    $517,113 
  
    Long-term restricted cash included in other assets 
     —  
     97,600 
  
    Total cash, cash equivalents and restricted cash in the statements of cash flows 
    $622,820  
    $614,713 

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 and profitability