Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 40

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 40
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 the gross proceeds of such financing to redeem all or any portion of the senior secured promissory
notes outstanding. The Company may also prepay the senior secured promissory notes in whole or in part at any time or from time to time.
The senior secured promissory notes also contain customary representations and warranties and covenants of each of the parties. Subject
to certain exceptions, the senior secured promissory notes are secured by a first lien and continuing security interest in and to the
Collateral (as defined in the senior secured promissory notes).

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 ALLOCATED NET PROCEEDS FROM PRIVATE PLACEMENT OF SENIOR SECURED PROMISSORY NOTES AND COMMITMENT SHARES

    Amount 

    Allocated to the following: 

    Senior secured promissory notes 
    $2,129,795 

    Commitment shares 
     539,455 

    Total 
    $2,669,250 

The
Company paid the senior secured promissory notes off in full on February 13, 2025 with funds generated by the February 2025 public equity
offering (See Note 12). Following is an analysis of the senior secured promissory notes balance:

 SCHEDULE OF SENIOR SECURED PROMISSORY NOTES BALANCE

    Amount 

    Balance, as of December 31, 2023 
    $— 

    Issuance of senior secured promissory notes, at par 
     3,600,000 

    Discount recognized at issuance date 
     (1,470,205)

    Amortization of discount 
     805,486 

    Balance, as of December 31, 2024 
     2,935,281 

    Amortization of discount 
     664,719 

    Principal payment 
     (3,600,000)

    Balance, as of September 30, 2025 
    $— 

Senior
Secured Convertible Note and Committed Equity Financing

On
September 15, 2025, the Company