Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 38

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 38
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 included origination fees totaling $50,000 for net proceeds of $1,000,000. The advance is, for the most part, secured
by expected future sales transactions of the Company with expected payments on a weekly basis. The Company will repay an aggregate of
$1,512,000 to the lender. The loan bears interest at 2.9% per week.

During
the year ended December 31, 2024, the Company made repayments totaling $1,551,250 and received additional proceeds of $1,144,000 and
recorded additional discount of $980,000. The Company refinanced this loan in April 2024 resulting in the additional proceeds received
during the year ended December 31, 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 nine months ended September 30,
2025. The remaining balance is $-0- as of September 30, 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) 404 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