Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 124

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 8
Chunk 124
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 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 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 March 31, 2025 and December 31, 2024.

Indefinite-lived intangible assets

We held indefinite-lived trade
names/trademarks of $699,000 as of March 31, 2025 and December 31, 2024, respectively, related to businesses within our entertainment
segment.

As a result of our interim impairment
test as of the last day of the fiscal third quarter of 2024 management 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 year ended December
31, 2024. The charge was primarily driven by the split-off transaction not being completed when and as expected and our recent revenue
and operating performance of the related business given a decline in demand and overall economic uncertainty. The remaining balance for
this trade name/trademark was $699,000 as of March 31, 2025 and December 31, 2024.

    19

NOTE 5. DEBT OBLIGATIONS

Debt obligations is comprised of the following:

 SCHEDULE OF DEBT OBLIGATIONS

    March 31,
                                                                                2025  
    December 31,
                                                                                2024 
  
    Economic injury disaster loan (EIDL) 
    $143,654  
    $144,495 
  
    Unsecured Promissory note – Entertainment Segment 
     600,000