Company: DGLY
Filing Date: 2025-05-02
Form Type: 424B3
Source: 0001641172-25-008437
Chunk: 20

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-02
Form: 424B3
Chunk 20
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 as well as each individual’s        
 contribution to the results achieved. The emphasis on overall Company performance is intended to align the employee’s financial               
 interests with the interests of shareholders. Digital Ally also seeks fairness in total compensation, with reference to external comparisons, 
 internal comparisons and the relationship between management and non-management remuneration. The structure of our compensation programs      
 balances incentive earnings for both short-term and long-term performance. Specifically:                                                      |

| ● | We provide employee wages                                                                                                 
 that are competitive and consistent with employee positions, skill levels, experience, knowledge and geographic location. |
| ● | We align our executives’                                                                                                  
 long-term equity compensation with our shareholders’ interests by linking realizable pay with stock performance.          |

| 10 |

| ● | Annual increases and incentive                                                                                                         
 compensation are based on merit, which is communicated to employees at the time of hiring and documented through our talent management 
 process as part of our annual review procedures and upon internal transfer and/or promotion.                                           |
| ● | All employees are eligible                                                                                                             
 for health insurance, paid and unpaid leaves, short-term disability, worker’s compensation, long-term disability, a retirement         
 plan and life and disability/accident coverage. We also offer a variety of voluntary benefits that allow employees to select the       
 options that meet their needs.                                                                                                         |

SOURCES AND AVAILABILITY OF RAW MATERIAL

The Company purchases its raw materials from multiple suppliers and has a minimum of two suppliers for most of its material requirements. The largest supplier in the fiscal year ended December 31, 2024 and 2023 represented less than 5% of total purchases. Because of a diminishing number of sources for components and packages in particular, and the increase in the prices of semiconductor and other components, the Company has been obliged to pay higher prices, which results in higher costs of goods sold.

Recent Developments

Potential Business Combination-In June 2023, the Company, entered into an Agreement and Plan of Merger (the “Proposed Merger Agreement”) with Clover Leaf Capital Corp., a Delaware corporation (Nasdaq: CLOE) (“Clover Leaf”), CL Merger Sub, Inc., a Nevada corporation and a wholly owned subsidiary of Clover Leaf (“Merger Sub”), Yntegra Capital Investments LLC, a Delaware limited liability company, in the capacity as the representative from and after the Effective Time (as defined in the Proposed Merger Agreement) for the stockholders of Clover Leaf in accordance with the terms and conditions of the Merger