Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 60

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 60
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in calculating the estimated fair value of the pre-funded warrants to purchase Common Stock which were effective and exercisable upon
issuance on February 13, 2025:

 SCHEDULE OF WARRANT MODIFICATION

    Pre funded warrants issuance date – February 13, 2025  assumptions 
  
    Volatility – range 
     110.1%
  
    Risk-free rate 
     4.27%
  
    Dividend 
     —%
  
    Remaining contractual term 
     0.03 years 
  
    Exercise price 
    $0.001 
  
    Common stock issuable under the warrants 
     49,075 

During
the nine months ended September 30, 2025, the pre-funded warrants to purchase 49,075 shares of Common Stock were fully exercised. In
conjunction with the exercise of the pre-funded warrants, the Company transitioned the related warrant derivative liability totaling
$1,803 to equity as of their exercise date. The warrant derivative liability related to the pre-funded warrants was $-0- as of September
30, 2025.

The
Series A warrants were issued/activated on Warrant Shareholder Approval Date of May 6, 2025 and their total fair value was estimated
to be $1,340,214 at the time of their issuance/activation. The following are the assumptions used in calculating the estimated fair value
of the Series A warrants to purchase Common Stock which were effective and exercisable upon the Warrant Shareholder Approval Date of
May 6, 2025:

    Series A warrants issuance/activation date – May 6, 2025  assumptions 
  
    Volatility – range 
     158.07%
  
    Risk-free rate 
     3.87%
  
    Dividend 
     —%
  
    Remaining contractual term 
     5.0 years 
  
    Exercise price 
    $62.00 
  
    Common stock issuable under the warrants 
     347,796 

On
June 27, 2025, the circumstances under which the Series A warrant terms allow for settlement outside the control of the Company were
terminated and no longer applicable. Therefore, the Company determined the fair value of the warrant liability as of that date ($530,101)
and transitioned that value to equity as the Series A warrants were no longer treated as warrant derivative liabilities. In conjunction
with change in warrant liability treatment of the Series A warrant on June