Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 144

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 8
Chunk 144
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 three months ended
March 31, 2025, Series B warrants to purchase 189,689 shares of Common Stock were fully exercised. In conjunction with the exercise
of the Series B warrants, the Company transitioned the related warrant derivative liability totaling $1,989,806 to equity as of their
exercise date. The warrant derivative liability related to the Series B warrants was $-0- as of March 31, 2025, as they are now fully
exercised.

The Company has utilized the following
assumptions in its Black-Scholes option valuation model to calculate the estimated fair value of the derivative liability relative to
the prefunded warrants and Series A warrants as of their date of issuance and as of December 31, 2024 and March 31, 2025:

    Issuance date assumptions  
    December 31, 2024  assumptions  
    March 31, 2025  assumptions 
  
    Volatility – range 
     72.1 - 101.1% 
     105.7% 
     105.5%
  
    Risk-free rate 
     4.25 – 5.46% 
     4.38% 
     4.26%
  
    Dividend 
     —% 
     —% 
     —%
  
    Remaining contractual term 
     0.1-5.0 years  
     4.5 years  
     4.2 years 
  
    Exercise price 
    $50.20  
    $10.04  
     10.04 
  
    Common stock issuable under the warrants 
     88,411  
     298,844  
     298,844 

The Company recognized the fair
value of the Series A warrants of $1,998,074 as a warrant derivative liability as of the date of issuance. There have been no Series A
warrants exercised through March 31, 2025. The fair value of the warrant derivative liability related to the Series A warrants was $48,457
and $2,408,598 as of March 31, 2025 and December 31, 2024, respectively. The change in fair value of the Series A warrant derivative liability
from December 31, 2024 to March 31, 2025 totaled $2,360,141 which was included as a gain in the condensed consolidated statements