Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 185

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 8
Chunk 185
---
 options and Common Stock purchase warrants were considered antidilutive and therefore excluded from the calculation
of diluted income (loss) per share for the three months ended March 31, 2025 and 2024 because all potentially dilutive securities were
excluded from the computation because of their exercise price being higher than the market value of our Common Stock in 2025 and the net
loss reported for 2024.

Liquidity and Capital Resources

Overall:

Management’s Liquidity
Plan. We have experienced net losses and cash outflows from operating activities since inception. Based upon our current operating
forecast, we anticipate that we will need to restore positive operating cash flows and/or raise additional capital in the short-term to
fund operations, meet our customary payment obligations and otherwise execute our business plan over the next 12 months. We are continuously
in discussions to raise additional capital, which may include a variety of equity and debt instruments; however, there can be no assurance
that our capital raising initiatives will be successful. Our recurring losses and level of cash used in operations, along with uncertainties
concerning our ability to raise additional capital, raise substantial doubt about our ability to continue as a going concern.

Cash, cash equivalents:
As of March 31, 2025, we had cash and cash equivalents with an aggregate balance of $3,762,608, an increase from a balance of $454,314
at December 31, 2024. Summarized immediately below and discussed in more detail in the subsequent subsections are the main elements of
the $3,308,294 net increase in cash during the three months ended March 31, 2025:

    ●
    Operating activities:
    Net cash used in operating activities was $5,754,761 and $918,545 for the three months ended March 31, 2025 and 2024, respectively, a deterioration of $4,836,216. The decrease is attributable to the repayment of accounts payable from proceeds of our February 2025 public equity offering, an increase in noncash gains from the change in fair value of warrant derivative liabilities, the extinguishment of liabilities and debt and cash used by the change in operating assets and liabilities during the three months ended March 31, 2025 compared to the same period in 2024.

    ●
    Investing activities:
    Net cash provided by (used in) investing activities was $(85,447) and $160,830 for the three months ended March