Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 188

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 188
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 through the condensed consolidated statement of operations.

The
Series B warrants issued in this transaction become issuable and exercisable on the date that relevant stockholder approval is obtained,
if ever. Relevant stockholder approval was obtained on December 17, 2024 which activated the Series A and B warrants. Both the Series
A and Series B warrants also contain price and warrant reset provisions that were activated upon the date of relevant stockholder approval.
The reset provisions increased the number of common shares issuable under the Series A warrant from 59,761 to 298,805 shares and the
exercise price per Series A warrant was reduced from $50.20 to $10.04 per share effective December 17, 2024. In addition, the Series
B warrants became effective and exercisable upon relevant stockholder approval on December 17, 2024 which resulted in 238,339 common
shares issuable under the Series B warrants with an exercise price of $0.001 per share effective December 17, 2024. The Company recognized
the full Series B warrant derivative liability value of $2,865,727 as of the date of relevant stockholder approval when it became effective
and exercisable of which $454,150 was recorded in equity and $2,411,577 was charged as a loss in the consolidated statement of operations
for the year ended December 31, 2024. The following are the assumptions used in calculating the estimated fair value of the detachable
Series B warrants to purchase Common Stock which became effective and exercisable upon relevant stockholder approval on December 17,
2024 and on December 31, 2024:

    Series B issuance date - December 17, 2024  assumptions  
    Series B - December 31, 2024 assumptions 
  
    Volatility – range 
     105.5% 
     105.7%
  
    Risk-free rate 
     4.26% 
     4.38%
  
    Dividend 
     —% 
     —%
  
    Remaining contractual term 
     4.5 years  
     4.48 years 
  
    Exercise price 
    $0.001  
    $0.001 
  
    Common stock issuable under the warrants 
     238,339  
     189,689 

During
the year ended December 31, 2024, prefunded warrants to purchase 28,650 shares of Common Stock were