Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 126

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 8
Chunk 126
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 a continuing interest in and to any and all collateral,
including but not limited to tangible and intangible personal property.

Unsecured Promissory Note

On February 1, 2025, the Company’s
Entertainment Segment entered into a $600,000 unsecured promissory note with a third party. The promissory note bears an interest rate
of 10.0% per annum, compounded monthly. Payments of principal and interest were originally due on May 5, 2025. The parties agreed to extend
the term for payments of principal and interest until June 4, 2025.

    20

2024 Commercial Extension of Credit

On January 22, 2024, the Company’s
Entertainment segment entered into an extension of credit in the form of a loan to use in marketing and operating its business in accordance
with the Ticket Solution Agreement. The Lender, Ticket Evolution, Inc., agreed to extend, subject to the conditions hereof, and Borrower
agreed to take, an advance for a sum of $75,000 with monthly advances of $100,000.

The advances made are recoupable
from client service fees with no more than $25,000 being recouped in any one week. The Company paid the remaining balance in full during
the three months ended March 31, 2025. The outstanding balance as of March 31, 2025 and December 31, 2024 was $-0- and $100,000, respectively.

Merchant Cash Advances – Video Solutions
Segment

In November 2023, the Company
obtained a short-term merchant advance, which totaled $1,050,000, from a single lender to fund operations. These advances included origination
fees totaling $50,000 for net proceeds of $1,000,000. The advance is, for the most part, secured by expected future sales transactions
of the Company with expected payments on a weekly basis. The Company will repay an aggregate of $1,512,000 to the lender. The loan bears
interest at 2.9% per week.

During the year ended December
31, 2024, the Company made repayments totaling $1,551,250 and received additional proceeds of $1,144,000 and recorded additional discount
of $980,000. The Company refinanced this loan in April 2024 resulting in the additional proceeds received during the year ended December
31,