Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 198

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 198
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 on the March
20, 2025 modification and determined to treat it as a deemed contribution of capital rather than a gain recognized in the condensed consolidated
statement of operations. Therefore the $1,249,372 gain on the March 20, 2025 modification was reversed during the quarter ended June
30, 2025 and recorded as a deemed contribution of capital rather than a gain recognized in the condensed consolidated statement of operations.

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Company
Related Party Note

On
August 22, 2024, Digital Ally’s Chief Executive Officer, made a loan in the amount of $100,000 to the Company to support its operations.
In addition, on October 24, 2024, Digital Ally’s Chief Executive Officer, made an additional loan in the amount of $40,000 to the
Company to support its operations. These transactions were recorded as related party notes payable (the “Company Related Party
Notes”). The Company Related Party Notes bear interest at prime rate (8.00% as of September 30, 2025 and December 31, 2024) per
annum with repayment due on demand. The Company paid off the Company Related Party Notes in full during the nine months ended September
30, 2025. As of December 31, 2024, the entire Company Related Party note of $140,000, is classified as current, with an accrued interest
balance of $3,465. The Company Related Party Notes balance is $-0- and $140,000 and an accrued interest balance of $-0- and $3,465 as
of September 30, 2025 and December 31, 2024, respectively.

Master
Distribution Agreement

On
June 11, 2025 the Company entered into an exclusive global Master Distribution Agreement with Redwood Scientific Technologies, (“Redwood”)
granting the Company the rights to distribute Redwood’s nicotine cessation products, including TBX-Free and TBX Vape-Free. This
strategic partnership positions Digital Ally as the commercialization partner for products aimed at helping Americans overcome addiction
to cigarettes and vape devices. Redwood is preparing to validate the efficacy of these products as it prepares to submit its products
for clinical trials utilizing a double-blind, randomized scientific study to support the efficacy of such products No sales or marketing
of the product will occur until the clinical study concludes and the efficacy is evaluated and confirmed. There can be no assurance whether
and when the clinical study will