Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 154

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 8
Chunk 154
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, to the extent a refund is sought after Closing, to provide such refund, if appropriate, to the customer requesting a refund,
and shall indemnify and hold harmless JC Entertainment from any and all claims, liabilities, costs, suits, or the like relating to such
refund request.

The Company accounts for business
combinations using the acquisition method and that the Company has early adopted the amendments of Regulation S-X dated May 21, 2020 and
has concluded that this acquisition was not significant. Accordingly, the presentation of the assets acquired, historical financial statements
under Rule 3-05 and related pro forma information under Article 11 of Regulation S-X, respectively, are not required to be presented.
Under the acquisition method, the purchase price of the Country Stampede Acquisition has been allocated to the acquired tangible and identifiable
intangible assets and assumed liabilities based on their estimated fair values at the time of the Country Stampede Acquisition. This allocation
involves a number of assumptions, estimates, and judgments that could materially affect the timing or amounts recognized in our condensed
consolidated financial statements. The Country Stampede Acquisition was structured as an asset purchase; however the parties agreed to
coordinate the election to invoke IRS Section 338(h)(10) relative to this transaction for tax purposes. Therefore, the excess purchase
price over the fair value of net tangible assets acquired was recorded as goodwill, which will be amortized over 15 years for income tax
filing purposes. Likewise, the other acquired assets were stepped up to fair value and is deductible for income tax purposes. The results
of operations of acquired businesses are included in the condensed consolidated statement of operations from the acquisition date.

The purchase price of the Country
Stampede Acquisition was allocated to tangible assets, goodwill, identifiable intangible assets, and assumed liabilities based on their
preliminary estimated fair values at the time of the acquisition. The Company retained the services of an independent valuation firm to
determine the fair value of these identifiable intangible assets. The Company has finalized the estimated fair value of assets acquired,
and liabilities assumed in the Country Stampede Acquisition which are as follows:

 SCHEDULE OF PRELIMINARY FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ACQUISITION

    As allocated (Final) 
  
    Description 
    March 1, 2024 
  
    Assets acquired (provisional): 

    Tangible assets acquired 
    $305,000 
  
    Identifiable intangible assets acquired (