Company: DGLY
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001493152-25-021680
Chunk: 62

Company: DIGITAL ALLY, INC.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 62
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    Exercise price 
    $0.00 
  
    Common stock issuable under the warrants 
     1,669,357 

    25

Of
the 1,669,357 total Series B warrants issued on May 6, 2025 a total of 1,669,320 warrants valued at $5,406,320 were immediately exercised
by their holders and transitioned to equity during the three and nine months ended September 30, 2025. There remain 37 Series B warrants
issued and outstanding at September 30, 2025 which were valued at $88.

2024
Purchase Warrants

On
June 25, 2024, the Company issued Series A and prefunded warrants to purchase a total of 88,411 shares of Common Stock along with the
sale of Common Stock. The Company also issued Series B Warrants that will be issuable and exercisable at any time or times on or after
the date that relevant stockholder approval is obtained in addition to the Series A warrants that are not included in outstanding warrants
until such time as relevant stockholder approval is obtained. Both the Series A and Series B warrants have reset provisions that are
activated upon the date relevant stockholder approval is obtained. The warrant terms provide for net cash settlement outside the control
of the Company under certain circumstances. As such, the Company is required to treat these warrants as derivative liabilities which
are valued at their estimated fair value at their issuance date and at each reporting date with any subsequent changes reported in the
condensed consolidated statements of operations as the change in fair value of warrant derivative liabilities. Furthermore, the Company
re-values the fair value of warrant derivative liability as of the date the warrant is exercised with the resulting warrant derivative
liability transitioned to change in fair value of warrant derivative liabilities 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