Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 189

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 189
---
 fully exercised. No pre-funded warrants
were exercised during the three months ended September 30, 2025. In conjunction with the exercise of the Series B warrants, the Company
transitioned the related warrant derivative liability totaling $584,955 to equity as of their exercise date in 2024. The warrant derivative
liability related to the remaining unexercised Series B warrants was $1,989,806 as of December 31, 2024. The change in fair value of
the Series B warrant derivative liability from their issuance date through December 31, 2024 totaled $290,965 which was included as a
loss in the condensed consolidated statement of operations for the year ended December 31, 2024.

During
the nine months ended September 30, 2025, Series B warrants to purchase 1,897 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 September 30, 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 September 30, 2025:

    Issuance date assumptions  
    December 31, 2024  assumptions  
    September 30, 2025  assumptions 
  
    Volatility – range 
     72.1 - 101.1% 
     105.7% 
     151.59%
  
    Risk-free rate 
     4.25 – 5.46% 
     4.38% 
     3.68%
  
    Dividend 
     —% 
     —% 
     —%
  
    Remaining contractual term 
     0.1-5.0 years  
     4.5 years  
     3.7 years 
  
    Exercise price 
    $5,020.00  
    $1,004.00  
     1,004.00 
  
    Common stock issuable under the warrants 
     884  
     2