Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 118

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 118
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935,492 for the nine months ended September 30, 2025 and 2024,
respectively, an improvement of $8,743,957 (58.5%). Operating loss as a percentage of revenues improved to 42% in 2025 as compared to
98% in 2024.

49

Interest
Income

Interest
income increased to $95,808 for the nine months ended September 30, 2025, from $63,064 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 and the
net proceeds from our September 2025 senior convertible note issuance.

Interest
Expense

We
incurred interest expenses of $960,250 and $2,505,536 during the nine months ended September 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 $3.6 million
senior secured promissory notes that were paid off with proceeds from the February 2025 public equity offering.

Other
income (expense)

Other
income (expense) increased to $252,603 for the nine months ended September 30, 2025, from $66,966 during the nine months ended September
30, 2024, which reflects weather insurance proceeds that we received in 2025 related to the 2025 Country Stampede.

Loss
on Extinguishment of debt

On
March 1, 2024, the Company obtained a short-term merchant advance for its entertainment segment, which totaled $1,000,000, from a single
lender to fund operations. The Company modified/amended the underlying loan agreement twice during the nine months ended September 30,
2024. The modifications were both deemed to be extinguishments of debt resulting in a $310,505 total loss during the nine months ended
September 30, 2024.

During
the nine months ended September 30, 2024, the Company refinanced its merchant advance loan for its video segment and determined the refinancing
of the debt should be treated as a debt extinguishment. As a result, the Company recorded a loss of $68,827 on the extinguishment during
the nine months ended September 30, 2024.

Change
in Fair