Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 31

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 1
Chunk 31
---
31, 2025. The outstanding balance as of March 31, 2025 and December 31, 2024 was $-0- and $100,000, respectively.

Merchant Cash Advances – Video Solutions
Segment

In November 2023, the Company
obtained a short-term merchant advance, which totaled $1,050,000, from a single lender to fund operations. These advances included origination
fees totaling $50,000 for net proceeds of $1,000,000. The advance is, for the most part, secured by expected future sales transactions
of the Company with expected payments on a weekly basis. The Company will repay an aggregate of $1,512,000 to the lender. The loan bears
interest at 2.9% per week.

During the year ended December
31, 2024, the Company made repayments totaling $1,551,250 and received additional proceeds of $1,144,000 and recorded additional discount
of $980,000. The Company refinanced this loan in April 2024 resulting in the additional proceeds received during the year ended December
31, 2024. The refinancing was deemed to be an extinguishment of debt and a loss on extinguishment of debt was recorded during the year
ended December 31, 2024 of $68,827.

As of December 31, 2024 the outstanding
principal balance was $1,922,750 which was paid in full during the three months ended March 31, 2025. The remaining balance is $-0- as
of March 31, 2025.

Securities Purchase Agreement and Senior Secured
Promissory Notes

On November 6, 2024, the Company
entered into a Securities Purchase Agreement (the “SPA”) with certain institutional investors (the “Purchasers”),
pursuant to which the Company agreed to issue and sell to such Purchasers, in a private placement transaction, (i) senior secured promissory
notes in aggregate principal amount of $3,600,000 (the “Notes”), and (ii) 40,419 shares (the “Commitment Shares”)
of the Company’s Common Stock, for aggregate gross proceeds of approximately $3.0 million, before deducting placement agent fees
and other offering expenses payable by the Company. This private placement closed on November 7, 2024 (the “Closing Date”).

Pursuant to the