Yield Point and Kluger Disclose 9.9% Economic Stake in DGLY
Rhea-AI Filing Summary
Digital Ally, Inc. received a joint Schedule 13G from Yield Point NY LLC and Yisroel Ari Kluger disclosing potential beneficial ownership of 191,722 shares of common stock, representing 9.9% of the 1,727,421 shares outstanding as of October 2, 2025. The reported position arises from a combination of 476,569 warrants and a senior secured convertible note with a principal of approximately $806,451, the economic interaction of which is limited by "Blocker" provisions that cap beneficial ownership at 9.99%.
The filing clarifies that Yield Point holds the instruments directly and Mr. Kluger, as director of Yield Point, has shared voting and disposition power over the 191,722 shares; Mr. Kluger does not directly own the shares. The Reporting Persons state the holdings were not acquired to change or influence control and have executed a joint filing agreement.
Positive
- Clear disclosure of instruments (warrants and convertible note) and the resulting capped beneficial ownership of 191,722 shares
- Blocker provisions limit ownership to under 9.99%, reducing chance of sudden control shift
Negative
- Potential dilution exists because warrants for 476,569 shares and the convertible note could convert/exercise subject to Blockers
- Shared voting power means influence is present but not unilateral, which can complicate coalition dynamics
Insights
Position is a near-10% capped economic stake via convertible instruments.
The disclosed stake of 191,722 shares equals 9.9% of the 1,727,421 share base, calculated from outstanding shares as of October 2, 2025. Ownership derives from warrants for 476,569 shares plus a convertible note (principal ~$806,451) whose combined exercise/conversion is constrained by 9.99% Blocker provisions.
Key dependencies are the issuer's outstanding share count and enforcement of the Blocker terms; monitor any changes in share count or amendments to the instruments which would alter the percent ownership near term.
Voting and disposition powers are shared, not sole, and tied to Yield Point governance.
The filing reports 0 shares of sole voting or dispositive power and 191,722 shares of shared voting/dispositive power for both Yield Point and Mr. Kluger, reflecting Yield Point's direct holding and Mr. Kluger's role as director. Mr. Kluger is therefore deemed a beneficial owner under Rule 13d-3 despite lacking direct ownership.
Certain governance implications follow if conversion/exercise occurs; investors should note that voting influence is collective rather than unilateral and any proxy contests or control-related actions would be affected by the 9.9% stake and the Reporting Persons' certification that the position is not intended to change control.
FAQ
What stake does Yield Point NY LLC report in Digital Ally (DGLY)?
Are the Reporting Persons planning to change or influence control of Digital Ally?
What limits future exercises or conversions by Yield Point in DGLY?