Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 33

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 1
Chunk 33
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 of all outstanding
principal, accrued and unpaid interest, if any, in addition to any and all other amounts due under the senior secured promissory notes,
without the requirement for any notice or demand or other action by the Purchaser or any other person.

If the Company engages in one
or more subsequent financings while the senior secured promissory notes are outstanding, the Company will be required to use at least
100% of 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