Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 32

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 1
Chunk 32
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 SPA, the Company
is required to file within 30 days of the Closing Date a registration statement with the SEC for a public offering and use its reasonable
best efforts to pursue and consummate a follow-on financing transaction within 90 days of the Closing Date. The proceeds of the public
offering shall be first used for the repayment of the principal amounts of the Notes. The Company is also required to file within 30 days
of the Closing Date a registration statement on Form S-1 (or other appropriate form if the Company is not then S-1 eligible) providing
for the resale by the Purchasers of the Commitment Shares issued under the SPA. The Company is required to use commercially reasonable
efforts to cause such registration statement to become effective within 60 days following the filing thereof and to keep such registration
statement effective at all times until no Purchaser owns any Commitment Shares.

Furthermore, pursuant to the SPA,
the Company was required to complete the following: (i) the Company’s board of directors shall approve an amendment to the Company’s
bylaws setting the quorum required for a special meeting of stockholders to one-third of all stockholders entitled to vote at such special
meeting and (ii) the Company shall file with the SEC a preliminary proxy statement on Schedule 14A announcing a meeting of stockholders
for the purpose of approving the Series A and Series B warrants issued by the Company on June 25, 2024.

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The senior secured promissory
notes mature ninety (90) days following their issuance date (the “Maturity Date”) and shall accrue no interest unless and
until an Event of Default (as defined in the senior secured promissory notes) has occurred, in which case interest shall accrue at a rate
of 14% per annum during the pendency of such Event of Default. In addition, upon customary Events of Default, the Purchasers may require
the Company to redeem all or any portion of the senior secured promissory notes in cash with a 125% redemption premium. The Purchasers
may also require the Company to redeem all or any portion of the senior secured promissory notes in cash upon a Change of Control, as
defined in the senior secured promissory notes, at the prices set forth therein. Upon a Bankruptcy Event of Default (as defined in the
senior secured promissory notes), the Company shall immediately pay to the Purchasers an amount in cash representing 100%