Digital Ally Fights Legal Battle Over Default Notice: Moving Sale Date

Digital Ally, Inc. (NASDAQ:DGLY) faced a recent legal development involving a Default Notice from Softforge Innovation, LLC, the administrative agent for a Senior Secured Promissory Note, as disclosed in a recent 8-K filing with the Securities and Exchange Commission. The Default Notice, received on October 22, 2024, highlighted several areas of concern. Firstly, it mentioned that Digital Ally failed to make a $100,000 payment due on October 10, 2024, resulting in a default under the Note. Secondly, it accelerated all principal and interest payments due under the Note. Lastly, it demanded the company and one of its subsidiaries, Kustom Entertainment, Inc., to enter into a lockbox control agreement within a specified timeframe. The outstanding obligation under the Note stands at approximately $1,600,000 as of the report date.

Additionally, Digital Ally received a Notice of UCC Article 9 Public Sale on October 24, 2024, announcing Softforge’s intention to conduct a public sale of the collateral securing the company’s obligations under the Note on November 5, 2024. However, a subsequent letter received on October 29, 2024, from Softforge’s counsel indicated a rescheduling of the public sale to November 7, 2024, without citing a reason for the change in dates.

In response, Digital Ally has expressed disagreement with the claims made in the Default Notice and the Sale Notice and has demanded the immediate rescission of the Sale Notice and cancellation of the public sale. The company intends to vigorously defend its rights, including seeking injunctive relief and damages against Softforge in this matter.

The regulatory filing also included the required signature from Stanton E. Ross, Chairman and Chief Executive Officer of Digital Ally, Inc., dated November 4, 2024, indicating the company’s compliance with the Securities Exchange Act of 1934.

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.

Digital Ally Company Profile

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.