Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 148

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 148
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 and profitability, estimation
of the long-term rate of growth for our business, estimation of the useful life over which cash flows will occur, and determination of
our weighted average cost of capital, which is risk-adjusted to reflect the specific risk profile of the reporting unit being tested.
Under the market approach, we estimate the fair value based on multiples of comparable public companies and precedent transactions. Significant
estimates in the income and market approach include: future levels of revenue growth, gross profit margin, EBITDA as a percentage of
revenue, cash-free debt-free net working capital as a percentage of revenue, capital expenditures as a percentage of revenue, discount
rate, selection of guideline public companies and revenue market multiples.

Long-lived
and Other Intangible Assets - The Company periodically assesses potential impairments of its long-lived assets in accordance with
the provisions of ASC 360, Accounting for the Impairment or Disposal of Long-lived Assets. An impairment review is performed whenever
events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. The Company groups its assets
at the lowest level for which identifiable cash flows are largely independent of the cash flows of the other assets and liabilities.
The Company has determined that the lowest level for which identifiable cash flows are available is the operating segment level.

Factors
considered by the Company include, but are not limited to, significant underperformance relative to historical or projected operating
results; significant changes in the manner of use of the acquired assets or the strategy for the overall business; and significant negative
industry or economic trends. When the carrying value of a long-lived asset may not be recoverable based upon the existence of one or
more of the above indicators of impairment, the Company estimates the future undiscounted cash flows expected to result from the use
of the asset and its eventual disposition. If the sum of the expected future undiscounted cash flows and eventual disposition is less
than the carrying amount of the asset, the Company recognizes an impairment loss. An impairment loss is reflected as the amount by which
the carrying amount of the asset exceeds the fair value of the asset, based on the fair value if available, or discounted cash flows,
if fair value is not available. The Company assessed potential impairments of its long-lived assets as of an interim date of September
30, 2024 and concluded that there was an impairment which was recorded during the year ended December 31, 2024. After completing our
2023 annual impairment test