Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 165

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 8
Chunk 165
---
 prices set forth therein. Upon a Bankruptcy Event of Default
(as defined in the senior secured promissory notes), the Company shall immediately pay to the Purchasers an amount in cash representing
100% of all outstanding principal, accrued and unpaid interest, if any, in addition to any and all other amounts due under the senior
secured promissory notes, without the requirement for any notice or demand or other action by the Purchaser or any other person.

    16

If
the Company engages in one or more subsequent financings while the senior secured promissory notes are outstanding, the Company will
be required to use at least 100% of the gross proceeds of such financing to redeem all or any portion of the senior secured promissory
notes outstanding. The Company may also prepay the senior secured promissory notes in whole or in part at any time or from time to time.
The senior secured promissory notes also contain customary representations and warranties and covenants of each of the parties. Subject
to certain exceptions, the senior secured promissory notes are secured by a first lien and continuing security interest in and to the
Collateral (as defined in the senior secured promissory notes).

The
net proceeds of the private placement on November 7, 2024 was $2,669,250 (after $330,750 deduction of costs of the offering). The Company
allocated the net proceeds from the private placement of the senior secured promissory notes and the commitment shares based upon their
relative fair values as of the date of issuance as follows:

 SCHEDULE OF ALLOCATED NET PROCEEDS FROM PRIVATE PLACEMENT OF SENIOR SECURED PROMISSORY NOTES AND COMMITMENT SHARES

    Amount 

    Allocated to the following: 

    Senior secured promissory notes 
    $2,129,795 

    Commitment shares 
     539,455 

    Total 
    $2,669,250 

The
Company paid the senior secured promissory notes off in full on February 13, 2025 with funds generated by the February 2025 public equity
offering (See Note 12). Following is an analysis of the senior secured promissory notes balance:

 SCHEDULE OF SENIOR SECURED PROMISSORY NOTES BALANCE

    Amount 

    Balance, as of December 31, 2023 
    $— 

    Issuance of senior secured promissory notes,