Material Agreement Form 8 K

Item 1.01 Entry Into a Material Definitive Agreement.

Secured Subsidiary Guarantee

As previously reported on the Current Report on Form 8-K filed on November 7, 2024 (the "SPA 8-K"), on November 6, 2024, Digital Ally, Inc. (the "Company") entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with certain institutional investors (the "Purchasers"), pursuant to which the Company has agreed to issue and sell to such Purchasers, in a private placement transaction, (i) senior secured promissory notes in aggregate principal amount of $3,600,000 (the "Notes"), and (ii) 808,377 shares (the "Shares") of the Company's common stock, par value $0.001 per share (the "Common Stock"), for aggregate gross proceeds of approximately $3.0 million, before deducting placement agent fees and other offering expenses payable by the Company (such transaction, the "Private Placement").

Furthermore, as previously reported in the amendment to the SPA 8-K filed on November 8, 2024, in order to secure the Company's obligations under the Notes, the Securities Purchase Agreement provides that the Company shall cause its wholly owned subsidiaries, to the extent permitted under such subsidiaries' existing obligations, to guarantee the payment of and performance of obligations under the Notes.

In connection therewith, on November 13, 2024, the Company entered into that certain Secured Subsidiary Guarantee (the "Guarantee"), by and among the Company, TicketSmarter, Inc., a Nevada corporation ("TicketSmarter"), Kustom 440 Inc., a Nevada corporation ("Kustom 440"), and Kustom Entertainment Inc., a Nevada corporation ("Kustom", each of TicketSmarter, Kustom 440 and Kustom a "Guarantor" and together, the "Guarantors").

Pursuant to the Guarantee, the Guarantors guarantee to the Purchasers the prompt and complete payment and performance when due of the Obligations (as defined in the Guarantee).

The foregoing description of the Guarantee does not purport to be complete and is qualified in its entirety by reference to the full text of the Guarantee, which is attached to this Current Report on Form 8-K (the "Report") as Exhibit 4.1and is incorporated herein by reference.