Digital Ally (DGLY) values ​​$15 million worth of redeemable convertible preferred stock


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Digital Ally, Inc. (NASDAQ: DGLY) (the “Company”), announced today that it has entered into a securities purchase agreement with certain institutional investors to purchase 1,400,000 Series A convertible redeemable preferred shares and 100,000 Series B convertible shares redeemable preferred shares. Each Series A and Series B Preferred Share has a purchase price of $9.50, representing an initial issue discount of 5% of the $10.00 stated value of each share. Each Series A and Series B Preferred Share is convertible into common shares of the Company at an initial conversion price of $1.00 per share. The Series A and Series B Preferred Shares are convertible at the option of the holder at any time after the Company has received shareholder approval of an amendment to the Company’s Articles to increase the number of common shares. that the company is authorized to issue. The Company and the holders of Series A and Series B Preferred Shares have also entered into a registration rights agreement to register the resale of the common shares issuable upon conversion of the Series A and Series B Preferred Shares The aggregate gross proceeds from the offerings, before discounts, placement agent fees and other estimated offering expenses, is $15.0 million.

The Series A and Series B Preferred Shares entitle their holders to vote with the common shareholders of the Company on proposals to effect an increase in the number of common shares that the Company is authorized to issue and a consolidation shares of the Company ordinary shares. The Series B Preferred Shares entitle the holder to cast 2,500 votes per Series B Preferred Share on such proposals, provided that such votes are cast in the same proportions as the common shares and Series A Preferred Shares are voted on. this proposition. proposal (excluding ordinary shares which are not voted on the proposal). Except as required by law or expressly provided for in the designation certificates, holders of Series A and Series B Preferred Shares will not be permitted to vote on any other matter. The holders of Series A and Series B Preferred Shares have agreed not to transfer, offer, sell, contract to sell, mortgage, pledge or otherwise assign their Preferred Shares prior to receipt of the shareholder approval of the increase in the authorized capital of the Company. ordinary actions. Holders of Series A and Series B Preferred Shares are entitled to require the Company to redeem their Preferred Shares for cash at 105% of the stated value of such shares during the period commencing on the earliest of the following dates : (i) the receipt of shareholder approval of the increase in the number of authorized common shares of the Company and the share consolidation and (ii) the date which is 60 days after the closing of the offer and ends 90 days after the closing of the offer. The Company has the option to redeem the Series A and Series B Preferred Shares for cash at 105% of the stated value commencing 90 days after the initial issuance of such class of shares, subject to the right of holders of convert the shares prior to redemption at the option of the Company.

The offering is expected to close on or about October 19, 2022, subject to the satisfaction of customary closing conditions. Additional information regarding the securities described above and the terms of the offering are included in a current report on Form 8-K on file with the United States Securities and Exchange Commission (“SEC”).

AGP/Alliance Global Partners is acting as exclusive placement agent for the offering.

The Series A and Series B Preferred Shares and the common shares into which such Preferred Shares are convertible are issued pursuant to the exemption from securities registration granted by Section 4(a)(2) of the Act Securities Act of 1933, as amended (the “1933 Act”) and/or Rule 506 of Regulation D as promulgated by the SEC under the 1933 Act.

This press release does not constitute an offer to sell or a solicitation of an offer to buy these securities, and there will be no sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

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