Company: DGLY
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001641172-25-024667
Chunk: 40

Company: DIGITAL ALLY, INC.
Filing Date: 2025-08-18
Form: 10-Q
Item: Part I, Item 1
Chunk 40
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 derivative liability to equity due to exercise of pre-funded warrant derivative liabilities in February 2025 public equity offering 
     (1,803)

    Transition of warrant derivative liability to equity due to exercise of Series B common stock purchase warrants issued in June 2024 Private Placement 
     (1,989,806)

    Transition of warrant derivative liability to equity due to exercise of Series B common stock purchase warrants issued in February 2025 Public Equity Offering 
     (5,406,320)

    Transition of warrant derivative liability to equity due to elimination of net cash settlement provisions relative to the Series A common stock purchase warrants issued in February 2025 Public Equity Offering 
     (530,101)

    Change in fair value of warrant derivative liabilities 
     (3,373,080)

    Balance, June 30, 2025 
    $1,955 

NOTE 7. ACCRUED EXPENSES

Accrued expenses consisted
of the following at June 30, 2025 and December 31, 2024:

 SCHEDULE OF ACCRUED EXPENSES

    June 30, 2025  
    December 31, 2024 
  
    Accrued warranty expense 
    $11,612  
    $11,615 
  
    Accrued payroll and related fringes 
     199,319  
     428,380 
  
    Accrued sales returns and allowances 
     93,170  
     93,170 
  
    Accrued sales taxes 
     89,423  
     104,404 
  
    Accrued interest - related party 
     —  
     492,177 
  
    Accrued board of directors’ fees 
     80,000  
     197,000 
  
    Customer deposits 
     1,200  
     165,779 
  
    Other 
     3,879  
     21,983 
  
    Total accrued expenses 
    $478,603  
    $1,514,508 

    22

NOTE 8. INCOME TAXES

The effective tax rate for
the three and six months ended June 30, 2025, and 2024 varied from the expected statutory rate due to the Company continuing to provide
a 100% valuation allowance on net deferred tax assets. The Company determined that it was appropriate to continue the