Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 118

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 8
Chunk 118
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 beginning after December 15, 2024, with
early adoption permitted. The guidance is required to be applied on a prospective basis with the option to apply retrospectively to all
prior periods presented in the consolidated financial statements. The Company is currently evaluating the impact to the Company’s
condensed consolidated financial statements.

ASU 2024-03, Disaggregation
of Income Statement Expenses, requires disaggregated disclosures in the notes to the consolidated financial statements of certain
categories of expenses that are included in expense line items on the Consolidated Statement of Income. This ASU is effective for annual
periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted.
The guidance is required to be applied on a prospective basis with the option to apply retrospectively to all prior periods presented
in the consolidated financial statements. The Company is currently evaluating the impact to the Company’s condensed consolidated
financial statements.

ASU 2024-04, Induced Conversions
of Convertible Debt Instruments, clarifies the requirement for determining whether certain settlements of convertible debt instruments
should be accounted for as induced conversions or extinguishments. This ASU is effective for annual periods beginning after December 15,
2025. Early adoption is permitted and can be applied either on a prospective basis or retrospective basis. The Company is currently evaluating
the impact of this ASU to the Company’s consolidated financial statements, however the Company does not anticipate this guidance
having a material impact to the condensed consolidated financial statements.

    14

The other recent accounting pronouncements
issued by the Financial Accounting Standards Board (“FASB”) are not expected to have a significant impact on the Company’s
consolidated financial statements and related disclosures.

Going Concern Matters and Management’s Plans

The accompanying condensed consolidated
financial statements have been prepared on a going-concern basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. The Company incurred substantial operating losses in the years ended December 31, 2024 and
2023 primarily due to reduced gross margins caused by a combination of competitors’ introduction of newer products with more advanced
features together with significant price cutting of their products and the recent acquisitions with much smaller margins than the video
solutions segment, historically. The Company incurred operating losses of approximately $15.2 million for the year ended December
31, 2024 and $974,680 during the three months ended March