Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 196

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 196
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 accrued reimbursable expenses payable to Nobility, LLC totaling $42,082 and $245,716 as of September 30, 2025 and December 31,
2024, respectively. Total management fees accrued and payable in accordance with the operating agreement totaled $20,933 and $38,625
as of September 30, 2025 and December 31, 2024, respectively. The company recorded management fee expense of $30,255 and $22,403 for
the nine months ended September 30, 2025 and 2024, respectively.

Transactions
with Related Party of TicketSmarter

On
September 22, 2023, a trust, the beneficiaries of which are an officer of TicketSmarter’s and his spouse, made a loan in the amount
of $2,325,000 to TicketSmarter to support TicketSmarter’s operations. On October 2, 2023 an additional $375,000 was advanced to
Ticketsmarter. The transaction was recorded as a related party note payable (the “TicketSmarter Related Party Note”). The
TicketSmarter Related Party Note bears interest of 13.25% per annum with repayment beginning January 2, 2024. As of December 31, 2024
the entire TicketSmarter Related Party note balance totaled $2,700,000, and was classified as current, with an accrued interest balance
of $488,711. The use of proceeds of the TicketSmarter Related Party Note was to resolve numerous outstanding payables at a discounted
rate, the discount received to resolve such outstanding payables is recognized as a gain on extinguishment of liabilities on the condensed
consolidated statement of operations. Additionally, these negotiations relieved TicketSmarter of numerous future obligations following
fiscal year 2023.

On
August 19, 2024, the parties agreed to amend the note whereby the repayment dates were extended to begin on January 2, 2025 and continue
at $54,000 for 50 consecutive weeks plus interest. The parties did not change any other provisions or terms of the note. The amendment
was determined to be a modification of the note rather than an extinguishment and reissuance of a new note. Payments totaling $22,000
have been made through September 30, 2025.

On
March 20, 2025, the parties agreed to a second modification of the TicketSmarter Related Party Note. The