Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 73

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 73
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In addition, on October 24, 2024, Digital Ally’s Chief Executive Officer, made an additional loan in the amount of $40,000 to the
Company to support its operations. These transactions were recorded as related party notes payable (the “Company Related Party
Notes”). The Company Related Party Notes bear interest at prime rate (8.00% as of September 30, 2025 and December 31, 2024) per
annum with repayment due on demand. The Company paid off the Company Related Party Notes in full during the nine months ended September
30, 2025. As of December 31, 2024, the entire Company Related Party note of $140,000, is classified as current, with an accrued interest
balance of $3,465. The Company Related Party Notes balance is $-0- and $140,000 and an accrued interest balance of $-0- and $3,465 as
of September 30, 2025 and December 31, 2024, respectively.

Master
Distribution Agreement

On
June 11, 2025 the Company entered into an exclusive global Master Distribution Agreement with Redwood Scientific Technologies, (“Redwood”)
granting the Company the rights to distribute Redwood’s nicotine cessation products, including TBX-Free and TBX Vape-Free. This
strategic partnership positions Digital Ally as the commercialization partner for products aimed at helping Americans overcome addiction
to cigarettes and vape devices. Redwood is preparing to validate the efficacy of these products as it prepares to submit its products
for clinical trials utilizing a double-blind, randomized scientific study to support the efficacy of such products No sales or marketing
of the product will occur until the clinical study concludes and the efficacy is evaluated and confirmed. There can be no assurance whether
and when the clinical study will be concluded and what the ultimate results will be.

The
agreement provides the Company with comprehensive rights to Redwood’s technologies, brands, trademarks, manufacturing processes,
vendor relationships, and additional assets. The two key products, TBX-Free and TBX Vape-Free, are designed to address significant health
concerns. TBX-Free targets traditional cigarette smokers, while TBX Vape-Free is the first-of-its-kind oral thin-film solution specifically
designed for vape users, addressing a critical gap in addiction treatment options.

The
Company paid $50,000 on July 8, 2025 to enter into the global Master Distribution Agreement with