Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 301

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 2
Chunk 301
---
5 public equity offering), higher noncash gains from changes in the fair value of warrant derivative
    liabilities and from liability and debt extinguishments, which reduced noncash add-backs to operating cash flow, and unfavorable
    changes in operating assets and liabilities period over period.

    ●
    Investing
    activities:
    Net
    cash provided by (used in) investing activities was $(349,319) and $392,523 for the nine months ended September 30, 2025 and 2024,
    respectively. During the nine months ended September 30, 2025, we made expenditures for the purchase of property plant and equipment
    and also for patents. During the nine months ended September 30, 2024, we sold our building and collected $550,644 in net proceeds.

    ●
    Financing
    activities:
    Net
    cash provided by financing activities was $9,684,796 and $3,330,482 for the nine months ended September 30, 2025 and 2024, respectively.
    During 2025, we completed several financing transactions: (i) a February 2025 public equity offering of common stock with detachable
    warrants generating $14,308,300 in net cash proceeds, (ii) issuance of an unsecured promissory note providing $600,000 in net cash
    proceeds, and (iii) issuance of a senior secured convertible note with detachable warrants providing $610,000 in net cash proceeds.
    These were partially offset by repayments on outstanding borrowings, including senior secured promissory notes and merchant cash
    advances.

51

The
net result of these activities was an increase in cash of $339,046 to $793,360 for the nine months ended September 30, 2025.

Commitments:

We
have $793,360 of cash and cash equivalents and net negative working capital of $115,393 as of September 30, 2025. Accounts receivable
and other receivables balances represented $4,796,447 of our net working capital at September 30, 2025. We intend to collect our outstanding
receivables on a timely basis and reduce the overall level during 2025, which would help to provide positive cash flow to support our
operations during 2025 and beyond. Inventory represents $2,622,542 of our net working capital at September 30, 2025. We are actively
managing