agreement
with two investors,
closed a registered direct offering (the “Offering”) of
(i) 3,250,000 shares of common stock (the “Shares”), par value $0.001 per share of the Company (“Common
Stock”); (ii) pre-funded warrants to purchase up to 11,050,000 shares of Common Stock at an exercise price of $0.01 per
share (the “Pre-Funded Warrant Shares”), issuable to investors whose purchase of shares of Common Stock would otherwise
result in such investor, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at
the election of the holder, 9.99%) of the Company’s outstanding Common Stock immediately following the consummation of the
Offering (the “Pre-Funded Warrants”); and (iii) common stock purchase warrants (the “W
arrants”) to purchase
up to an aggregate of 14,300,000 shares of Common Stock (the “Warrant Shares”), which are exercisable for a period
of five years after issuance at an initial exercise price $3.25 per share, subject to certain adjustments, as provided in the
Warrants. The Company received gross proceeds
of approximately $40,040,000, before deducting
discounts, commissions and other offering expenses.
Kingswood Capital Markets, division of Benchmark Investments, Inc.
acted as the exclusive placement agent in connection with the Offering pursuant to a placement agency agreement.
As
previously disclosed in the Company’s Current Report on Form 8-K filed on January 28, 2021 with the U.S. Securities and
Exchange Commission (the “SEC”), the Shares, the Pre-Funded Warrants, the Pre-Funded Warrant Shares, the Warrants
and the Warrant Shares were registered under the Securities Act of 1933, as amended, pursuant to a prospectus supplement to the
Company’s currently effective shelf registration statement, which was initially filed with the SEC on June
25,
2020, and was declared effective on July 2, 2020, and the related base prospectus included in the Registration Statement, as supplemented
by the prospectus supplement dated January 27, 2021
.
The
Company intends to use the net proceeds from the Offering for working capital, product development, potential acquisitions, order
fulfillment and for general corporate purposes. The Company may use a portion of the net proceeds for the acquisition of businesses,
products, technologies or licenses that are complementary to its business.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date:
February 3, 2021
Digital
Ally, Inc.
By:
/s/
Stanton E. Ross
Name:
Stanton
E. Ross
Title:
Chairman,
President and Chief Executive Officer
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