Company: DGLY
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001641172-25-024667
Chunk: 58

Company: DIGITAL ALLY, INC.
Filing Date: 2025-08-18
Form: 10-Q
Item: Part I, Item 1
Chunk 58
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001 
  
    Common stock issuable under the warrants 
     238,339  
     189,689 

During the year ended December
31, 2024, prefunded warrants to purchase 28,650 shares of Common Stock were fully exercised. No pre-funded warrants were exercised during
the three months ended June 30, 2025. In conjunction with the exercise of the Series B warrants, the Company transitioned the related
warrant derivative liability totaling $584,955 to equity as of their exercise date in 2024. The warrant derivative liability related to
the remaining unexercised Series B warrants was $1,989,806 as of December 31, 2024. The change in fair value of the Series B warrant derivative
liability from their issuance date through December 31, 2024 totaled $290,965 which was included as a loss in the condensed consolidated
statement of operations for the year ended December 31, 2024.

    31

During the six months ended
June 30, 2025, Series B warrants to purchase 1,897 shares of Common Stock were fully exercised. In conjunction with the exercise of the
Series B warrants, the Company transitioned the related warrant derivative liability totaling $1,989,806 to equity as of their exercise
date. The warrant derivative liability related to the Series B warrants was $-0- as of June 30, 2025, as they are now fully exercised.

The Company has utilized the
following assumptions in its Black-Scholes option valuation model to calculate the estimated fair value of the derivative liability relative
to the prefunded warrants and Series A warrants as of their date of issuance and as of December 31, 2024 and June 30, 2025:

    Issuance date assumptions  
    December 31, 2024  assumptions  
    June 30, 2025  assumptions 
  
    Volatility – range 
     72.1
- 101.1 %  
     105.7% 
     154.65%
  
    Risk-free rate 
     4.25 – 5.46 %  
     4.38% 
     3.83%
  
    Dividend 
     —% 
     —% 
     —%
  
    Remaining contractual term 
     0.1-5.0
years  
     4.5