Company: DGLY
Filing Date: 2025-02-21
Form Type: PRE 14A
Source: 0001493152-25-007922
Chunk: 31

Company: DIGITAL ALLY, INC.
Filing Date: 2025-02-21
Form: PRE 14A
Chunk 31
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 our shares of Common Stock, including any voting rights, until the holder exercises the Warrant.

Fundamental Transaction. In the event of a fundamental transaction, as described in the Warrants and the Pre-Funded Warrants, and generally including, with certain exceptions, any reorganization, recapitalization or reclassification of our shares of common stock, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding shares of common stock, or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding shares of common stock, the holders of the Warrants and the Pre-Funded Warrants will be entitled to receive upon exercise thereof the kind and amount of securities, cash or other property that the holders would have received had they exercised the warrants immediately prior to such fundamental transaction. In addition, in the event of a fundamental transaction, as described in the Warrants and the Pre-Funded Warrants, the Company shall, at the option of the holders of the Warrants and the Pre-Funded Warrants, exercisable at any time concurrently with, or within 30 trading days after, the consummation of the fundamental transaction (or, if later, the date of the public announcement of the applicable fundamental transaction), purchase the Warrants and the Pre-Funded Warrants from the holders of the Warrants and the Pre-Funded Warrants by paying to the holders of the Warrants and the Pre-Funded Warrants an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of the Warrants and the Pre-Funded Warrants on the date of the consummation of such fundamental transaction.

Variable Rate Transaction. As described in the Warrants, the Company, at any time until the three (3) month anniversary of the initial exercise date, shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its subsidiaries of common stock or common stock equivalents (or a combination of units thereof) involving a Variable Rate Transaction (as defined in the Warrants).

Purpose of the Warrant Stockholder Approval

Since the exercise price of the Series A Warrant is, and the exercise price of the Series B Warrant may be adjusted to a price that is less than 50% of the Nasdaq “Minimum Price,” the Offering may be categorized as a private placement instead of a public offering.