Company: DGLY
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001641172-25-024667
Chunk: 113

Company: DIGITAL ALLY, INC.
Filing Date: 2025-08-18
Form: 10-Q
Item: Part I, Item 1
Chunk 113
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30, 2024.

Gain on disposal of intangibles

Gain on disposal of intangibles
decreased to $-0- for the six months ended June 30, 2025, from $5,582 during the six months ended June 30, 2024.

Loss on Sale of Property, Plant and Equipment

The Company reported a loss
on sale of property, plant and equipment of $-0- and $41,661 during the six months ended June 30, 2025, and 2024, respectively.

Loss before Income Tax Benefit

As a result of the above,
we reported net loss before income tax benefit of $(222,122) and $(8,953,819) for the six months ended June 30, 2025 and 2024,
respectively, an improvement of $9,175,941 (102.5%).

Income Tax Benefit

We recorded an income tax
benefit of $-0- for the six months ended June 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 June 30, 2025 and December 31, 2024 primarily
because of the recurring operating losses.

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

We had approximately $156,019,000
of federal net operating loss carryforwards and $1,742,000 of research and development tax credit carryforwards as of June 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 $(222,122) and $(8,953,819) for the six months ended June 30, 2025 and 2024, respectively, an improvement
of $8,731,697 (97.5%).

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
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