Company: DGLY
Filing Date: 2025-08-18
Form Type: 10-Q
Source: 0001641172-25-024667
Chunk: 116

Company: DIGITAL ALLY, INC.
Filing Date: 2025-08-18
Form: 10-Q
Item: Part I, Item 1
Chunk 116
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 intend to collect our outstanding receivables on a timely basis
and reduce the overall level during 2025, which would help to provide positive cash flow to support our operations during 2025 and beyond.
Inventory represents $2,466,106 of our net working capital at June 30, 2025. We are actively managing the level of inventory, and our goal
is to reduce such level during 2025 by our sales activities, the decrease of which should provide additional cash flow to help support
our operations during 2025 and beyond.

Capital Expenditures:

We had the following material
commitments for capital expenditures at June 30, 2025:

Lease commitments. Total
lease expense under the Company’s operating leases was approximately $386,672 during the six months ended June 30, 2025.

The following sets forth the
operating lease right of use assets and liabilities as of June 30, 2025:

    Assets: 

    Operating lease right of use assets, net 
    $1,540,922 
  
    Prepayment of rent 
     203,800 

    Total operating lease right of use asset 
    $1,744,722 
  
    Liabilities: 

    Operating lease obligations-current portion 
     196,644 
  
    Operating lease obligations-less current portion 
     1,344,278 
  
    Total operating lease obligations 
    $1,540,922 

61

Following are the minimum
lease payments for each year and in total.

    Year ending December 31: 

    2025 (July 1, 2025 through December 31, 2025) 
    $105,412 
  
    2026 
     381,251 
  
    2027 
     448,051 
  
    2028 
     364,652 
  
    2029 and thereafter 
     489,231 
  
    Total undiscounted minimum future lease payments 
     1,788,597 
  
    Imputed interest 
     (247,675)
  
    Total operating lease liability 
    $1,540,922 

Debt obligations - We have the following
outstanding debt as of June 30, 2025 which require future principal payments:

    June 30, 2025 
  
    Economic injury disaster loan (EIDL) 
    $142,805 
  
    Unsecured Prom