Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 19

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 1
Chunk 19
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 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. Subsequent to completing our 2023 annual impairment test, no events or changes
in circumstances were noted that required an interim goodwill impairment test until the fiscal third quarter of 2024, when events occurred
that we considered triggering events.

    12

During the third fiscal quarter
of 2024, management determined that triggering events had occurred resulting from the additional decline in demand for our services, prolonged
economic uncertainty, the split-off transaction did not occur when and as expected and a further decrease in our stock price. Therefore,
we performed an interim impairment test as of September 30, 2024. Refer to Note 4. Goodwill and Other Intangible Assets for additional
details on the interim impairment test, valuation methodologies, and inputs used in the fair value measurements. The Company also assessed
potential impairments of its long-lived assets as of December 31, 2024 and concluded that there was no additional impairment as compared
to its September 30, 2024 interim assessment. Subsequent to completing our annual impairment test as of December 31, 2024, no events or
changes in circumstances were noted that triggered the requirement for an interim goodwill impairment test for the fiscal