Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 119

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 119
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 Value of Derivative Liabilities

The
change in fair value of the warrant derivative liabilities for the nine months ended September 30, 2025 and 2024, respectively totaled
a gain of $3,373,919 during the nine months ended September 30, 2025 as compared to a gain of $2,178,965 during the nine months ended
September 30, 2024. The Company has issued various detachable warrants in connection with capital raises during 2024 and 2025 that were
required to be treated as warrant derivative liabilities. Warrant derivative liabilities are required to be marked-to-market at each
balance sheet date with the change in fair value recorded as a gain or loss in the Condensed Statement of Operations. The gain recorded
in the nine months ended September 30, 2025 reflects the large decline in the closing market value of our common stock at September 30,
2025 when compared to December 31, 2024 closing market values.

Gain
on Extinguishment of Liabilities

The
Company recorded a gain on the extinguishment of liabilities for the nine months ended September 30, 2025 and 2024 of $2,243,991, and
$691,730, respectively. The gains reflect income related to the video solutions and entertainment segment’s ability to negotiate
down payables and other contract obligations during the nine months ended September 30, 2025 utilizing funds generated by the closing
of the February 2025 public equity offering on February 13, 2025.

The
gain on extinguishment of liabilities was $691,730 for the nine months ended September 30, 2024, which reflects income related to the
entertainment segment’s ability to negotiate down payables and other contract obligations during the period. The Company utilized
funds from the related party note payable to resolve numerous outstanding payables at a discounted rate, the discount received was recognized
as a gain on extinguishment of liabilities in the condensed consolidated statement of operations for the nine months ended September
30, 2024.

Gain
on disposal of intangibles

Gain
on disposal of intangibles decreased to $-0- for the nine months ended September 30, 2025, from $5,582 during the nine months ended September
30, 2024.

Gain
on Sale of Property, Plant and Equipment

The
Company reported a gain on sale of property, plant and equipment of $-