Company: DGLY
Filing Date: 2025-05-20
Form Type: 10-Q
Source: 0001641172-25-011765
Chunk: 48

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-20
Form: 10-Q
Item: Part I, Item 1
Chunk 48
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5 years  
     4.48 years 
  
    Exercise price 
    $0.001  
    $0.001 
  
    Common stock issuable under the warrants 
     238,339  
     189,689 

    30

During the year ended December
31, 2024, prefunded warrants to purchase 28,650 shares of Common Stock were fully exercised. No pre-funded warrants were exercised during
the three months ended March 31, 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 three months ended
March 31, 2025, Series B warrants to purchase 189,689 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 March 31, 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 March 31, 2025:

    Issuance date assumptions  
    December 31, 2024  assumptions  
    March 31, 2025  assumptions 
  
    Volatility – range 
     72.1 - 101.1% 
     105.7% 
     105.5%
  
    Risk-free rate 
     4.25 – 5.46% 
     4.38% 
     4.26%
  
    Dividend 
     —% 
     —%