Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 184

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 184
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 detachable common stock purchase warrants to purchase 476,569 shares of the Company’s common stock at an exercise price of
$2.124 per share. The detachable common stock purchase warrants have a term of 5 years from the date of issuance.

February
2025 Purchase Warrants

On
February 13, 2025, the Company issued pre-funded units, each consisting of one-prefunded warrant (to purchase a total of 49,075 shares
of Common Stock), one Series A warrant and one Series B warrant along with the sale of units, each consisting of one share of Common
Stock, one Series A warrant and one Series B warrant. The Series A and Series B warrants were exercisable only upon receipt of stockholder
approval to approve each of (i) certain terms in the Series A warrants and Series B warrants and the issuance of the shares of Common
Stock issuable upon the exercise of such warrants, as may be required by the applicable rules and regulations of The Nasdaq Stock Market
LLC and (ii) if necessary, a proposal to amend the Company’s Articles of Incorporation, as amended, to increase the authorized
share capital of the Company to an amount sufficient to cover the shares of Common Stock issuable upon the exercise of the Series A warrants
and Series B warrants. The Series A Warrants were exercisable commencing upon the date of public notice of the Stockholder Approval (the
“Warrant Stockholder Approval Date”) until five years after the Warrant Stockholder Approval Date, and the Series B Warrants
were exercisable commencing upon the Warrant Stockholder Approval Date until two and one-half years after the Warrant Stockholder Approval
Date. Both the Series A and Series B warrants contain reset provisions that are activated upon the date Stockholder Approval is obtained.
The Company’s Shareholders approved the issuance of the Series A and B warrants at a Special Meeting of Shareholders on May 6,
2025 which serves as the Warrant Stockholder Approval Date. The Series A and B warrant terms provide for net cash settlement outside
the control of the Company under certain circumstances. As such, the Company is required to treat the Series A and B warrants as derivative
liabilities until such time as the circumstances which allow for settlement outside the control of the Company are terminated or no longer
applicable. Warrant derivative liabilities treatment of the Series A and B warrants to be valued at their estimated fair value at their
issuance/activation date and at