Company: DGLY
Filing Date: 2025-05-02
Form Type: 424B3
Source: 0001641172-25-008437
Chunk: 160

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-02
Form: 424B3
Chunk 160
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, 2024. The Company recognized the full Series B warrant derivative liability value of $2,865,727 as of the date of Stockholder Approval when it became effective and exercisable of which $454,150 was recorded in equity and $2,411,577 was charged as a loss in the statement of operations for the year ended December 31, 2024. The following are the assumptions used in calculating the estimated fair value of the detachable Series B warrants to purchase common stock which became effective and exercisable upon Stockholder Approval on December 17, 2024 and on December 31, 2024:

SCHEDULE OF WARRANT MODIFICATION

|                                          |     | Series                              
 B issuance date - December 17, 2024 
 assumptions                         |           |   |     |   |                Series 
 B - December 31, 2024 
           assumptions |   |
|:-----------------------------------------|:----|:------------------------------------|----------:|:--|:----|:--|----------------------:|:--|
| Volatility – range                       |     |                                     |     105.5 | % |     |   |                 105.7 | % |
| Risk-free rate                           |     |                                     |      4.26 | % |     |   |                  4.38 | % |
| Dividend                                 |     |                                     |         — | % |     |   |                     — | % |
| Remaining contractual term               |     |                                     |       4.5 
     years |   |     |   |            4.48 years |   |
| Exercise price                           |     | $                                   |     0.001 |   |     | $ |                 0.001 |   |
| Common stock issuable under the warrants |     |                                     | 4,766,777 |   |     |   |             3,793,777 |   |

During the year ended December 31, 2024, Series B warrants to purchase 973,000 shares of common stock were fully exercised. In conjunction with the exercise of the Series B warrants, the Company transitioned the related warrant derivative liability totaling $584,955 to equity as of their exercise date. The warrant derivative liability related to the Series B warrants was $1,989,806 as of December 31, 2024. The change in fair value of the Series B warrant derivative liability from their issuance date through December 31, 2024 totaled