Company: DGLY
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001641172-25-024667
Chunk: 288

Company: DIGITAL ALLY, INC.
Filing Date: 2025-08-18
Form: 10-Q
Item: Part I, Item 2
Chunk 288
---
    2029 and thereafter 
     128,294 

    Total 
    $742,805 

Litigation.

From time to time, we are
notified that we may be a party to a lawsuit or that a claim is being made against us. It is our policy to not disclose the specifics
of any claim or threatened lawsuit until the summons and complaint are actually served on us. After carefully assessing the claim, and
assuming we determine that we are not at fault or we disagree with the damages or relief demanded, we vigorously defend any lawsuit filed
against us. We record a liability when losses are deemed probable and reasonably estimable. When losses are deemed reasonably possible
but not probable, we determine whether it is possible to provide an estimate of the amount of the loss or range of possible losses for
the claim, if material for disclosure. In evaluating matters for accrual and disclosure purposes, we take into consideration factors such
as our historical experience with matters of a similar nature, the specific facts and circumstances asserted, the likelihood of our prevailing,
the availability of insurance, and the severity of any potential loss. We re-evaluate and update accruals as matters progress over time.

While the ultimate resolution
is unknown, we do not expect that these lawsuits will individually, or in the aggregate, have a material adverse effect to our results
of operations, financial condition or cash flows. However, the outcome of any litigation is inherently uncertain and there can be no assurance
that any expense, liability or damages that may ultimately result from the resolution of these matters will be covered by our insurance
or will not be in excess of amounts recognized or provided by insurance coverage and will not have a material adverse effect on our operating
results, financial condition or cash flows. See Note 9, “Commitments and Contingencies,” to the condensed consolidated financial
statements of this Quarterly Report on Form 10-Q for information on our litigation.

62

Critical Accounting Estimates

Our significant accounting
policies are summarized in Note 1, “Nature of Business and Summary of Significant Accounting Policies,” to our condensed
consolidated financial statements. While the selection and application of any accounting policy may involve some level of subjective judgments
and estimates, we believe the following accounting policies and estimates are the most critical to our financial statements, potentially
involve the most subjective judgments in their selection and application, and are the most susceptible to uncertainties and changing conditions:

    ●
    Revenue Recognition / Allowance for Doubtful Accounts