Company: DGLY
Filing Date: 2025-06-17
Form Type: POS AM
Source: 0001641172-25-015434
Chunk: 29

Company: DIGITAL ALLY, INC.
Filing Date: 2025-06-17
Form: POS AM
Chunk 29
---
 to acquire the common stock and pay an exercise price of $375.00 per share (125% of the assumed offering price per Unit), subject to adjustment, from time to time, until the 5 year anniversary from the date of the Warrant Stockholder Approval, after which date any unexercised Series A Warrants expire and have no further value; and commencing upon Warrant Stockholder Approval, holders of Series B Warrants may exercise their right to acquire the common stock and pay an exercise price of $600.00 per share (200% of the assumed offering price per Unit), subject to adjustment, from time to time, until the two and one half year anniversary from the date of Warrant Stockholder Approval, after which date any unexercised Series B Warrants expire and have no further value.

| 16 |

Since the Warrants are executory contracts, they may have no value in a bankruptcy or reorganization proceeding.

In the event a bankruptcy or reorganization proceeding is commenced by or against us, a bankruptcy court may hold that any unexercised Warrants are executory contracts that are subject to rejection by us with the approval of the bankruptcy court. As a result, holders of the Warrants may, even if we have sufficient funds, not be entitled to receive any consideration for their Warrants or may receive an amount less than they would be entitled to if they had exercised their Warrants prior to the commencement of any such bankruptcy or reorganization proceeding.

If the holders of the Series B Warrants elect to exercise such warrants using the zero exercise price option, stockholders will suffer substantial dilution.

The Series B Warrants contain
a zero exercise price provision which provides the holders the right, at their option, to receive a number of shares equal to the product
of (x) the aggregate number of shares of common stock that would be issuable upon a cash exercise of the Series B Warrant and (y) three
(3.0). As a result of this feature, we do not expect to receive any cash proceeds from the exercise of the Series B Warrants in these
circumstances because it is highly unlikely that a Series B Warrant holder will elect to pay an exercise price in cash to receive one
share of common stock at a time when they could elect the zero exercise price option to receive more shares of common stock than they
would receive if they did pay an exercise price. An exercising holder of a Series B Warrant using the “zero exercise price”
option