Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 127

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 8
Chunk 127
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2024. The refinancing was deemed to be an extinguishment of debt and a loss on extinguishment of debt was recorded during the year
ended December 31, 2024 of $68,827.

As of December 31, 2024 the outstanding
principal balance was $1,922,750 which was paid in full during the three months ended March 31, 2025. The remaining balance is $-0- as
of March 31, 2025.

Securities Purchase Agreement and Senior Secured
Promissory Notes

On November 6, 2024, the Company
entered into a Securities Purchase Agreement (the “SPA”) with certain institutional investors (the “Purchasers”),
pursuant to which the Company agreed to issue and sell to such Purchasers, in a private placement transaction, (i) senior secured promissory
notes in aggregate principal amount of $3,600,000 (the “Notes”), and (ii) 40,419 shares (the “Commitment Shares”)
of the Company’s Common Stock, for aggregate gross proceeds of approximately $3.0 million, before deducting placement agent fees
and other offering expenses payable by the Company. This private placement closed on November 7, 2024 (the “Closing Date”).

Pursuant to the SPA, the Company
is required to file within 30 days of the Closing Date a registration statement with the SEC for a public offering and use its reasonable
best efforts to pursue and consummate a follow-on financing transaction within 90 days of the Closing Date. The proceeds of the public
offering shall be first used for the repayment of the principal amounts of the Notes. The Company is also required to file within 30 days
of the Closing Date a registration statement on Form S-1 (or other appropriate form if the Company is not then S-1 eligible) providing
for the resale by the Purchasers of the Commitment Shares issued under the SPA. The Company is required to use commercially reasonable
efforts to cause such registration statement to become effective within 60 days following the filing thereof and to keep such registration
statement effective at all times until no Purchaser owns any Commitment Shares.

Furthermore, pursuant to the SPA,
the Company was required to complete the following: (i) the Company’s board of directors shall approve an amendment to the Company’s
bylaws setting the quorum required for a special meeting of stockholders to one-third of all stock