KUST 8-K
Kustom Entertainment, Inc. (KUST)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
CURRENT REPORT
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Item 2.04. Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under and Off-Balance Sheet Arrangement.
As previously disclosed, on October 22, 2024, Digital Ally, Inc. (the “Company”) received a Default and Reservation Letter (the “Default Notice”) from counsel for Softforge Innovation, LLC (“Softforge”), the administrative agent for a Senior Secured Promissory Note (the “Original Note”), as modified pursuant to that Letter Agreement dated July 13, 2024, as further modified pursuant to that Letter Agreement dated September 12, 2024, as further modified pursuant to that Amended and Restated Promissory Note, dated September 25, 2024 (the “Amended Note”, and together with the Original Note, the “Note”), (i) notifying the Company that it is in default under the Note for, among other reasons, failing to make a $100,000 payment that was due on October 10, 2024, (ii) accelerating all principal and interest payments due under the Note, and (iii) demanding the Company and Kustom Entertainment, Inc., a Nevada corporation and wholly-owned subsidiary of the Company, enter into a lockbox control agreement within ten (10) business days of the date of the Default Notice. As of the date of this report, the outstanding obligation of the Company under the Note is approximately $1,600,000.
Also as previously disclosed, on October 24, 2024, the Company received a Notice of UCC Article 9 Public Sale (the “Sale Notice”) from counsel to Softforge notifying the Company that it intends to conduct a public sale of the collateral securing the Company’s obligations under the Note and Security Agreement at 11:00 a.m. ET on November 5, 2024.
On October 29, 2024, the Company received a letter from counsel to Softforge notifying the Company that the contemplated public sale will be moved from 11:00 a.m. ET on November 5, 2024 to 11:00 am ET on November 7, 2024.
The Company has notified Softforge that it disputes the claims made in the Default Notice and the Sale Notice and demanded that Softforge immediately rescind the Sale Notice and cancel the public sale. The Company intends to vigorously defend its rights, including by seeking injunctive relief and damages against Softforge.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: November 4, 2024
| Digital Ally, Inc. | ||
| By: | /s/ Stanton E. Ross | |
| Name: | Stanton E. Ross | |
| Title: | Chairman and Chief Executive Officer | |