Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 114

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 8
Chunk 114
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methodology to each reporting unit based on discounted cash flows. This analysis requires significant judgments, including estimation
of future cash flows, which is dependent on internally-developed forecasts of revenue and profitability, estimation of the long-term rate
of growth for our business, estimation of the useful life over which cash flows will occur, and determination of our weighted average
cost of capital, which is risk-adjusted to reflect the specific risk profile of the reporting unit being tested. Under the market approach,
we estimate the fair value based on multiples of comparable public companies and precedent transactions. Significant estimates in the
income and market approach include: future levels of revenue growth, gross profit margin, EBITDA as a percentage of revenue, cash-free
debt-free net working capital as a percentage of revenue, capital expenditures as a percentage of revenue, discount rate, selection of
guideline public companies and revenue market multiples.

Long-lived and Other Intangible
Assets - The Company periodically assesses potential impairments of its long-lived assets in accordance with the provisions of ASC
360, Accounting for the Impairment or Disposal of Long-lived Assets. An impairment review is performed whenever events or changes in circumstances
indicate that the carrying value of the assets may not be recoverable. The Company groups its assets at the lowest level for which identifiable
cash flows are largely independent of 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