Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 55

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 1
Chunk 55
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 to Nobility, LLC totaling $271,487 and $245,716 as of March 31, 2025 and December 31, 2024, respectively. Total management
fees accrued and payable in accordance with the operating agreement totaled $9,321 and $38,625 as of March 31, 2025 and December 31, 2024,
respectively. The company recorded management fee expense of $9,321 and $12,379 for the three months ended March 31, 2025 and 2024, respectively.

Transactions with Related Party of TicketSmarter

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. 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, the entire TicketSmarter Related
Party note balance totaled $2,700,000, and is classified as current, with an accrued interest balance of $488,711, respectively. 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.

    34

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. No payments have been made to date in 2025.

On March 20, 2025, the parties
agreed to a second modification of the TicketSmarter Related Party Note. The modification eliminated all accrued interest totaling $582,203
as