Digital Ally, Inc. Faces Default Notice and Potential Collateral Sale

Digital Ally, Inc. (NASDAQ: DGLY) recently found itself in a challenging financial situation as it received a Default and Reservation Letter on October 22, 2024. The company was notified by counsel for Softforge Innovation, LLC, the administrative agent for the Note, that it has defaulted under the terms of the agreement, particularly for failing to make a $100,000 payment due on October 10, 2024. The Default Notice also highlighted the acceleration of all principal and interest payments under the Note and demanded that the company enter into a lockbox control agreement within ten business days.

The total outstanding obligation of Digital Ally under the Note as of the report date is approximately $1,600,000. Subsequently, on October 24, 2024, the company received a Notice of UCC Article 9 Public Sale from Softforge’s counsel, indicating their intention to conduct a public sale of the collateral securing Digital Ally’s obligations under the Note and Security Agreement on November 5, 2024, at 11:00 a.m. ET.

In response to the Default Notice and Sale Notice, Digital Ally expressed its disagreement with the claims made by Softforge and promptly demanded the rescission of the Sale Notice, advocating for the cancellation of the impending public sale. The company affirmed its intent to vehemently defend its rights, including pursuing injunctive relief and damages against Softforge.

Digital Ally, Inc. has taken a firm stance against the Default Notice and the proposed collateral sale, opting to challenge the claims and actions put forth by Softforge. The company’s Chairman and Chief Executive Officer, Stanton E. Ross, indicated the company’s commitment to defending its position by signing the report on October 28, 2024.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Digital Ally’s 8K filing here.

About Digital Ally

Digital Ally, Inc produces and sells digital video imaging, storage, and disinfectant and related safety products for use in law enforcement, security, and commercial applications in the United States. It operates through three segments: Video Solutions, Revenue Cycle Management, and Entertainment. The company offers in-car digital video mirror systems for law enforcement; in-car digital video event recorder systems for commercial fleets; a suite of data management web-based tools to assist fleet managers in the organization, archival, and management of videos and telematics information; body-worn digital video systems for law enforcement and private security; and VuLink ecosystem that provides intuitive auto-activation functionality as well as coordination between multiple recording devices.