Company: DGLY
Filing Date: 2025-02-06
Form Type: S-1/A
Source: 0001493152-25-005144
Chunk: 274

Company: DIGITAL ALLY, INC.
Filing Date: 2025-02-06
Form: S-1/A
Chunk 274
---
 unit’s carrying value at a 20%
premium or greater. Based on our most recent impairment test, the video solutions reporting unit’s fair value was substantially in
excess of its carrying value, while the revenue cycle management and entertainment segments were determined to be impaired.

We held goodwill
of $5,480,966
as of September 30, 2024 and December 31, 2023, related to businesses within our revenue cycle management segment. We held goodwill
of $6,112,507 and $5,886,548 as of September 30, 2024 and December 31, 2023, respectively, related to businesses within our
entertainment segment. As a result of our September 30, 2024 interim impairment test, we concluded that the carrying amount of the
revenue cycle management and the entertainment reporting units exceeded its estimated fair values. Thus, we recorded a non-cash
goodwill impairment charge of $4,322,000,
related to the goodwill carrying balance for the revenue cycle management segment, and a non-cash goodwill impairment charge of
$307,000, related to the goodwill carrying balance for the entertainment segment, both of 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 goodwill impairment was primarily driven by recent performance of the revenue cycle management and
entertainment reporting units since our annual impairment testing date, as well as a delay in the projected timing of recovery. The
remaining balance for the goodwill carrying balance related to businesses within our revenue 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, 202