Company: DGLY
Filing Date: 2025-09-26
Form Type: DRS
Source: 0001493152-25-015027
Chunk: 39

Company: DIGITAL ALLY, INC.
Filing Date: 2025-09-26
Form: DRS
Chunk 39
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 Senior Secured
Convertible Notes in the aggregate original principal amount of $3,000,000 (the “2023 Notes”) and warrants (the “2023
Warrants”). The 2023 Purchase Agreement provided for ten percent (10%) original interest discount resulting in gross proceeds to
the Company of $2,700,000. No interest accrues under the Notes. The Warrants are exercisable for an aggregate 1,125,000 shares comprised
of 375,000 warrants at an exercise price of $5.50 per share of the Company’s common stock, 375,000 warrants at an exercise price
of $6.50 per share of common stock, and 375,000 warrants at an exercise price of $7.50 per share of common stock. Subject to certain
conditions, within 18 months from the effectiveness date and while the 2023 Notes remain outstanding, the 2023 Purchasers have the right
to require the Company to consummate a second closing of up to an additional $3,000,000 of 2023 Notes and 2023 Warrants on the same terms
and conditions as the First Closing, except that the 2023 Notes may be subordinate to a mortgage on the Company’s headquarters
building (the “Bank Mortgage”). The 2023 Notes are convertible into shares of common stock at the election of the 2023 Purchasers
at any time at a fixed conversion price of $5.00 (the “Conversion Price”) per share of common stock. The Conversion Price
is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment
in the event of any issuances of common stock, or securities convertible, exercisable or exchangeable for, common stock at a price below
the then-applicable Conversion Price (subject to certain exceptions). Subject to certain conditions, including certain equity conditions,
the Company may redeem some or all of the then outstanding principal amount of the 2023 Note for cash in an amount equal to 110% of the
outstanding principal amount of the 2023 Notes (the “Optional Redemption Amount”). In addition, the Purchasers may, at their
option, demand repayment at the Optional Redemption Amount upon five (5) business days’ written notice following (i) the closing
by the Company of the Bank Mortgage, or (ii) a sale by the Company of common stock or common stock equivalents.

On June 24, 202