Company: DGLY
Filing Date: 2025-05-02
Form Type: 424B3
Source: 0001641172-25-008437
Chunk: 131

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-02
Form: 424B3
Chunk 131
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 an earn-out adjustment, being the difference between $3,500,000 (the
“January Projected Revenue”) and the cash basis revenue (the “January Measurement Period Revenue”) collected
by the January Sellers in its normal course of business from the clients existing on January 1, 2022, during the period from April 1,
2022 through March 31, 2023 (the “January Measurement Period”) measured on a quarterly basis and annualized as of the relevant
period. If the January Measurement Period Revenue is less than the January Projected Revenue, such amount will be subtracted from the
principal balance of this January Contingent Payment Note on a dollar-for-dollar basis. If the January Measurement Period Revenue is
more than the January Projected Revenue, such amount will be added to the principal balance of this January Contingent Payment Note on
a dollar-for-dollar basis. In no event will the principal balance of this January Contingent Payment Note become a negative number. The
maximum downward earn-out adjustment to the principal balance will be a reduction to zero. There are no limits to the increases to the
principal balance of the January Contingent Payment Note as a result of the earn-out adjustments.

On January 1,
2022, Nobility Healthcare issued another contingent consideration promissory note (the “January Contingent Payment Note”)
in connection with a stock purchase agreement between Nobility Healthcare and a private company (the “January Sellers”) of
$750,000. Principal payments, since its inception, on this contingent consideration promissory note totalled $153,769. The estimated
fair value of the January Contingent Note at December 31, 2023 is $-0-, representing a decrease in its estimated fair value of $208,083 as
compared to its estimated fair value as of December 31, 2022, of which $32,936 represents payments made during the year ended December
31, 2023. Therefore, the Company recorded a gain of $175,146 in the Consolidated Statements of Operations for the year ended December
31, 2023.

On February 1, 2022,
Nobility Healthcare issued another contingent consideration promissory note (the “February Contingent Payment Note”) in connection
with an asset purchase agreement between Nobility Healthcare and a private company (the “February Sellers”) of $105,000.
The February Contingent Payment Note has a three-year3