Company: DGLY
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001641172-25-024667
Chunk: 33

Company: DIGITAL ALLY, INC.
Filing Date: 2025-08-18
Form: 10-Q
Item: Part I, Item 1
Chunk 33
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2024, respectively, related to businesses within our entertainment segment. As a result of our September 30,
2024 interim impairment test, we concluded that the carrying amount of the revenue cycle management and the entertainment reporting
units exceeded its estimated fair values. Thus, we recorded a non-cash goodwill impairment charge of $4,322,000,
related to the goodwill carrying balance for the revenue cycle management segment, and a non-cash goodwill impairment charge of
$307,000,
related to the goodwill carrying balance for the entertainment segment, both of which was included in goodwill and intangible asset
impairment charge on our Condensed Consolidated Statements of Operations for the three months ended September 30, 2024. The goodwill
impairment was primarily driven by recent performance of the revenue cycle management and entertainment reporting units since our
annual impairment testing date, as well as a delay in the projected timing of recovery. The remaining balance for the goodwill
carrying balance related to businesses within our revenue cycle management segment was $1,158,966
and within the entertainment segment was $5,805,507, as of June 30, 2025 and December 31, 2024.

Indefinite-lived intangible assets

We held indefinite-lived trade
names/trademarks of $699,000 as of June 30, 2025 and December 31, 2024, respectively, related to businesses within our entertainment segment.

As a result of our interim
impairment test as of the last day of the fiscal third quarter of 2024 management concluded that the carrying amount of a trade name/trademark
related to the entertainment segment exceeded its estimated fair value and we recorded a non-cash impairment charge of $201,000, which
was included in goodwill and intangible asset impairment charge on our Condensed Consolidated Statements of Operations for the year ended
December 31, 2024. The charge was primarily driven by the split-off transaction not being completed when and as expected and our recent
revenue and operating performance of the related business given a decline in demand and overall economic uncertainty. The remaining balance
for this trade name/trademark was $699,000 as of June 30, 2025 and December 31, 2024.

NOTE 5. DEBT OBLIGATIONS

Debt obligations are comprised of the following:

 SCHEDULE OF DEBT OBLIGATIONS

    June 30, 2025  
    December