Company: DGLY
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001641172-25-024667
Chunk: 267

Company: DIGITAL ALLY, INC.
Filing Date: 2025-08-18
Form: 10-Q
Item: Part I, Item 2
Chunk 267
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 administrative salaries and reductions in headcount in order to right-size
our expenses across all operating segments with our revenues.

Operating Loss

For the reasons previously
stated, our operating loss was $4,095,073 and $3,914,221 for the three months ended June 30, 2025 and 2024, respectively, a slight deterioration
of $180,852 (4.6%). Operating loss as a percentage of revenues improved to 72.7% in 2025 as compared to 69.7% in 2024.

Interest Income

Interest income increased
to $45,946 for the three months ended June 30, 2025, from $29,933 in 2024, which reflects our overall increase in our cash and cash equivalent
levels in 2025 compared to 2024 due to funds generated in the February 2025 public equity offering.

Interest Expense

We incurred interest expenses
of $77,280 and $1,085,063 during the three months ended June 30, 2025 and 2024, respectively. The large decrease is attributable to the Company
paying off most of its interest-bearing debt in late 2024 and early 2025 including the senior secured promissory notes that were paid
off with proceeds from the February 2025 public equity offering.

Other income (expense)

Other income (expense) decreased
to $18,767 for the three months ended June 30, 2025, from $30,445 during the three months ended June 30, 2024, which reflects income related
to a warehouse sublease within the corporate headquarters during early 2024 which ceased upon the sale of the building which occurred
in 2024.

Loss on Extinguishment of Debt - related
party

On September 22, 2023, a trust,
the beneficiaries of which are TicketSmarter’s Chief Executive Officer and his spouse, made a loan in the amount of $2,325,000 to
TicketSmarter to support TicketSmarter’s operations. The Related Party Note bears interest of 13.25% per annum with repayment
beginning January 2, 2024. On October 2, 2023 an additional $375,000 was advanced to Ticketsmarter which increased the loan
balance to $2,700,000. The use of proceeds of the TicketSmarter Related Party Note was to resolve numerous outstanding payables at