Company: DGLY
Filing Date: 2025-02-14
Form Type: 424B4
Source: 0001493152-25-006704
Chunk: 194

Company: DIGITAL ALLY, INC.
Filing Date: 2025-02-14
Form: 424B4
Chunk 194
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 $               | 5.50 - 7.50 |   |
| Common stock issuable under the warrants |     |                 |   1,125,000 |   |

On June 2, 2023, the Purchasers elected to convert $ 125,000principal, at the fixed price of $ 5.00per share of common stock, 25,000shares valued at $ 119,750. The loss on conversion of convertible note into common shares, of $ 93,386, was recorded during the period.

On
October 26, 2023, the Company entered into a Revolving Loan Agreement of which a portion of the net proceeds were used to repay the principal
amount of the Convertible debt. The Company made an aggregate payment of $3,162,500 from the proceeds, inclusive of fees to retire the
convertible notes. In 2023, the Company amortized $2,169,545 in debt issuance costs associated with the convertible notes and expensed
the remaining balance of $731,819 upon extinguishment of the notes. As a result a loss on extinguishment of debt totaling $1,019,319
was recorded in our Consolidated Statements of Operations for the year ended December 31, 2023. The warrants associated with the convertible
debt remain outstanding.

Revolving Loan Agreement

On October 26, 2023, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) by and between the Company, Digital Ally Healthcare, Inc., a Nevada corporation and wholly-owned subsidiary of the Company (“Digital Ally Healthcare” and, together with the Company, the “Borrower”), and Kompass Kapital Funding, LLC, a Kansas limited liability company (“Kompass”). In connection with the Loan Agreement, on October 26, 2023, the Company entered into a Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing (the “Mortgage”) by and between the Company, as grantor, and Kompass, as grantee, and issued a Revolving Note (the “Revolving Note”) to Kompass. The gross proceeds to the Company are $ 4,880,000before repaying those certain Senior Secured Convertible Notes issued on April 5, 2023 in the aggregate amount of $ 3,162,500and paying customary fees and expenses.

| F-27 |

Pursuant to the Loan Agreement, Kompass