Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 299

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 2
Chunk 299
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14,424,531) for the nine months ended September
30, 2025 and 2024, respectively, an improvement of $13,239,067 (91.8%).

50

Income
Tax Benefit

We
recorded an income tax benefit of $-0- for the nine months ended September 30, 2025 and 2024, respectively. The effective tax rate for
both 2025 and 2024 varied from the expected statutory rate due to our continuing to provide a 100% valuation allowance on net deferred
tax assets. We determined that it was appropriate to continue the full valuation allowance on net deferred tax assets as of September
30, 2025 and December 31, 2024 primarily because of the recurring operating losses.

We
have further determined to continue providing a full valuation reserve on our net deferred tax assets as of September 30, 2025.

We
had approximately $159,965,000 of federal net operating loss carryforwards and $1,796,111 of research and development tax credit carryforwards
as of September 30, 2025 and December 31, 2024 available to offset future net taxable income.

Net
Loss

As
a result of the above, we reported net income (loss) of $(1,185,464) and $(14,424,531) for the nine months ended September 30, 2025 and
2024, respectively, an improvement of $13,239,067 (91.8%).

Net
Income Attributable to Noncontrolling Interests of Consolidated Subsidiary

The
Company has a 51% equity interest in its consolidated subsidiary, Nobility Healthcare. As a result, the noncontrolling shareholders or
minority interest is allocated 49% of the income/loss of Nobility Healthcare which is reflected in the condensed consolidated statement
of income (loss) as “net income (loss) attributable to noncontrolling interests of consolidated subsidiary”. We reported
net income attributable to noncontrolling interests of consolidated subsidiary of $118,133 and a net loss of $1,939,143 for the nine
months ended September 30, 2025 and 2024, respectively.

Net
Loss Attributable to Common Stockholders

As
a result of the above, we reported a net loss of $(1,303,597) and $(12,485,388) for the nine months ended September 30,