Deal also includes warrants; proceeds slated to fund working capital
By Devika Patel
Knoxville, Tenn., May 24 - Digital Ally Inc. increased its 8% one-year unsecured credit facility to $2.5 million from $1.5 million on Nov. 7, according to an 8-K filed Thursday with the Securities and Exchange Commission. The deal priced on May 24, and the principal is due May 30, 2013.
The Nov. 7 increase is represented by a unsecured subordinated promissory note, which is equal in payment priority to the principal borrowed in May.
The investor also received warrants for 300,000 common shares in the initial tranche and warrants for 150,000 shares in the November tranche. The warrants are each exercisable at $1.00, a 6.54% discount to the May 23 closing share price of $1.07, until Nov. 30, 2013.
Source Capital Group, Inc. was paid a fee in connection with the transaction.
Proceeds will be used for working capital purposes, including research and development of new products.
Based in Leawood, Kan., Digital Ally manufactures surveillance and other technologies used by law enforcement, homeland security and commercial security purposes.
| Issuer: | Digital Ally Inc.
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| Issue: | Unsecured credit facility
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| Amount: | $2.5 million
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| Maturity: | May 30, 2013
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| Coupon: | 8%
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| Warrants: | For 450,000 shares
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| Warrant expiration: | Nov. 30, 2013
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| Warrant strike price: | $1.00
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| Pricing date: | May 24
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| Upsized: | Nov. 7
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| Stock symbol: | Nasdaq: DGLY
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| Stock price: | $1.13 at close May 24
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| Market capitalization: | $12.76 million
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