Company: DGLY
Filing Date: 2025-02-11
Form Type: S-1/A
Source: 0001493152-25-005949
Chunk: 219

Company: DIGITAL ALLY, INC.
Filing Date: 2025-02-11
Form: S-1/A
Chunk 219
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 extended the expiration date of the February Warrants to September 18, 2026. The Exchange Warrants provide for an initial exercise price of $ 65.00per share, subject to customary adjustments thereunder, and are immediately exercisable upon issuance for cash and on a cashless basis. On the date of the exchange, the Company calculated the fair value, using the Black-Scholes method, of the cancelled February Warrants and the newly issued Exchange Warrants, the difference in fair value measurement of the respective warrants was attributed to warrant modification expense in the consolidated statement of operations.

| F-36 |

On August 23, 2022, the Company entered into Warrant Exchange Agreements (the “Warrant Exchange Agreements”) with certain investors (the “Investors”), pursuant to which the Company agreed to issue to the Investors an aggregate of 303,750shares of Common Stock in exchange for the cancellation by the Investors of the January Warrants, the Exchange Warrants and the Replacement Originals Warrants. On the date of the exchange, the Company calculated the fair value of the issuance of shares of common stock pursuant to the Warrant Exchange Agreements, attributing that value to common stock and additional paid in capital. The remaining value of the warrant derivative liability was attributed to an income from change in fair market value of warrant derivative liabilities and gain on extinguishment of warrant derivative liabilities in the consolidated statement of operations. On the date of the Warrant Exchange Agreement, using the Black-Scholes method, the fair value of the warrant derivative liability was $ 8.1million, compared to $ 9.3million at June 30, 2022, resulting in income from change in fair market value of warrant derivative liabilities of $ 1.2million during the year ended December 31, 2022. Further, the value of the issued shares of Common Stock was $ 4.5million, applied to additional paid in capital, resulting in a gain on the extinguishment of warrant derivative liabilities of $ 3.6million during the year ended December 31, 2022.

SCHEDULE OF WARRANT MODIFICATION

|                                          |     | Terms at        
 August 23, 2022 |                 |   |
|:-----------------------------------------|:----|:----------------|----------------:|:--|
| Volatility - range                       |     |                 |           103.7 | % |
| Risk-free rate                           |     |                 |     3.17 - 3.