Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 53

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 1
Chunk 53
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 will be determined on the Reset Date and in accordance with the
terms therein (the “Series B Warrant”, and together with the Series A Warrant, the “Warrants”).

Securities Purchase Agreement and Senior Secured
Promissory Notes

On November 6, 2024, the Company
entered into a Securities Purchase Agreement (the “SPA”) with certain institutional investors, pursuant to which the Company
agreed to issue and sell to such investors, in a private placement transaction, (i) senior secured promissory notes in aggregate principal
amount of $3,600,000, and (ii) 40,419 shares (the “Commitment Shares”) of the Company’s Common Stock, for aggregate
gross proceeds of approximately $3.0 million, before deducting placement agent fees and other offering expenses payable by the Company.
This private placement closed on November 7, 2024.

The net proceeds of the private
placement on November 7, 2024 was $2,669,250 (after $330,750 deduction of costs of the offering). The Company allocated the net proceeds
from the private placement of the senior secured promissory notes and the commitment shares based upon their relative fair values as of
the date of issuance as follows:

 SCHEDULE OF NET PROCEEDS FROM THE PRIVATE PLACEMENT

    Amount 

    Allocated to the following: 

    Senior secured promissory notes 
    $2,129,795 

    Commitment shares 
     539,455 

    Total 
    $2,669,250 

    33

Cancellation of Restricted Stock

During the three months ended
March 31, 2025 and 2024, the Company cancelled -0- and 56 shares due to termination of employees, respectively.

Exercise of Prefunded Warrants

During the three months ended
March 31, 2025, prefunded warrants to purchase 4,907,500 shares of Common Stock that were issued in conjunction with the February 2025
public equity offering of Common Stock, were fully exercised at an exercise price of $0.001 per share.

During the three months ended
March 31, 2025, Series B warrants to purchase 189,689 shares of Common Stock that were issued in conjunction with the June 2024 public
equity offering of Common Stock, were fully exercised for total proceeds of $3,793. In conjunction with the exercise of the