Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 248

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 248
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,330,482 for the nine months ended September 30, 2025 and 2024, respectively.
    During 2025, we completed several financing transactions: (i) a February 2025 public equity offering of common stock with detachable
    warrants generating $14,308,300 in net cash proceeds, (ii) issuance of an unsecured promissory note providing $600,000 in net cash
    proceeds, and (iii) issuance of a senior secured convertible note with detachable warrants providing $610,000 in net cash proceeds.
    These were partially offset by repayments on outstanding borrowings, including senior secured promissory notes and merchant cash
    advances.

51

The
net result of these activities was an increase in cash of $339,046 to $793,360 for the nine months ended September 30, 2025.

Commitments:

We
have $793,360 of cash and cash equivalents and net negative working capital of $115,393 as of September 30, 2025. Accounts receivable
and other receivables balances represented $4,796,447 of our net working capital at September 30, 2025. We intend to collect our outstanding
receivables on a timely basis and reduce the overall level during 2025, which would help to provide positive cash flow to support our
operations during 2025 and beyond. Inventory represents $2,622,542 of our net working capital at September 30, 2025. We are actively
managing the level of inventory, and our goal is to reduce such level during 2025 by our sales activities, the decrease of which should
provide additional cash flow to help support our operations during 2025 and beyond.

Capital
Expenditures:

We
had the following material commitments for capital expenditures at September 30, 2025:

Lease
commitments. Total lease expense under the Company’s operating leases was approximately $546,797 during the nine months
ended September 30, 2025.

The
following sets forth the operating lease right of use assets and liabilities as of September 30, 2025:

    Assets: 

    Operating lease right of use assets, net 
    $1,496,418 
  
    Prepayment of rent 
     138,843 

    Total operating lease right of use asset 
    $1,635,261 
  
    Liabilities: 

    Operating lease obligations-current