Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 152

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 8
Chunk 152
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 with repayment due on demand. The Company
paid off the Company Related Party Notes in full during the three months ended March 31, 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 March 31, 2025 and December 31, 2024, respectively.

NOTE 14. GAIN ON EXTINGUISHMENT OF LIABILITIES

The Company
recorded gains on the extinguishment of liabilities for the three months ended March 31, 2025 and 2024 of $2,220,097,
and $682,345,
respectively. The gains reflect income related to the video solutions and entertainment segment’s ability to negotiate down
payables and other contract obligations during the three months ended March 31, 2025 utilizing funds generated by the closing of the
February 2025 public equity offering on February 13, 2025. The discount received was recognized as a gain on extinguishment of
liabilities in the condensed consolidated statement of operations for the three months ended March 31, 2024.

The gain on
extinguishment of liabilities was $682,345
for the three months ended March 31, 2024, reflects income related to the entertainment segment’s ability to negotiate down
payables and other contract obligations during the period. The Company utilized funds from the related party note payable to resolve
numerous outstanding payables at a discounted rate, the discount received was recognized as a gain on extinguishment of liabilities
in the condensed consolidated statement of operations for the three months ended March 31, 2024.

NOTE 15. NET INCOME (LOSS) PER SHARE

The calculation of the weighted
average number of shares outstanding and income (loss) per share outstanding for the three months ended March 31, 2025 and 2024 are as
follows:

 SCHEDULE OF WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING AND LOSS PER SHARE OUTSTANDING

    Three Months ended  March 31, 

    2025  
    2024 
  
    Numerator for basic and diluted income (loss) per share – Net loss attributable to common stockholders 
    $4