Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 120

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 120
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0- and $389,522 during the nine months ended September 30, 2025,
and 2024, respectively.

During
the nine months ended September 30, 2024, the Company sold its building for $5,900,000 less closing costs of $7,194. The carrying amount
of the building on the date of sale was $5,461,623. As a result of the sale the Company recorded a gain of $431,183 in the Consolidated
Statement of Operation during the nine months ended September 30, 2024. This amount was offset by a separate loss on sale of fixed assets
of $41,661 for the nine months ended September 30, 2024

Loss
before Income Tax Benefit

As
a result of the above, we reported net loss before income tax benefit 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%).

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