Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 9

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 1
Chunk 9
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73,894)

    Assets acquired in business acquisitions 
    $—  
    $605,000 

    Goodwill acquired in business acquisitions 
    $—  
    $225,959 

    Liabilities assumed in business acquisitions 
    $—  
    $288,000 

    Adjustments of accounts payable with the sale proceeds of property, plant and equipment 
    $—  
    $549,356 

    Fair value of warrants issued with sale of shares 
    $1,803  
    $— 

    Transition of warrant derivative liability to equity upon exercise of warrants 
    $1,993,600  
    $— 

    Reduction in proceeds from sale of building for loan, prepaid rent, and other accrued expenses 
    $—  
    $— 

    Issuance of common stock upon exercise of pre-funded warrants 
    $4,907  
     — 

See Notes to Unaudited Condensed
Consolidated Financial Statements.

6

DIGITAL ALLY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES

Nature of Business:

Digital Ally, Inc. was originally
incorporated in Nevada on December 13, 2000 as Vegas Petra, Inc. and had no operations until 2004. On November 30, 2004, Vegas Petra,
Inc. entered into a Plan of Merger with Digital Ally, Inc., at which time the merged entity was renamed Digital Ally, Inc. (such merged
entity, the “Predecessor Registrant”).

On August
23, 2022 (the “Effective Time”), the Predecessor Registrant merged with and into its wholly owned subsidiary, DGLY Subsidiary
Inc., a Nevada corporation (the “Registrant”), pursuant to an agreement and plan of merger, dated as of August 23, 2022 (the
“Merger Agreement”), between the Predecessor Registrant and the Registrant, with the Registrant as the surviving corporation
in the merger (such transaction, the “Merger”). At the Effective Time, Articles of Merger were filed with the Secretary of
State of the State of Nevada, pursuant to which the Registrant was renamed “Digital Ally, Inc.” and, by operation of law,
succeeded to