Company: DGLY
Filing Date: 2025-05-02
Form Type: 424B3
Source: 0001641172-25-008437
Chunk: 48

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-02
Form: 424B3
Chunk 48
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 of credits, issued senior promissory notes with commitment shares resulting in $2,669,250 in net cash proceeds and issued common stock    
 with detachable warrants resulting in $2,194,745 in net cash proceeds. The cash proceeds were partially offset by payments on outstanding 
 loans including the payments on merchant advances.                                                                                        |

The net result of these activities was a decrease in cash of $323,835 to $454,314 for the year ended December 31, 2024.

Commitments:

We had $454,314 of cash and cash equivalents and net negative working capital
of $19,377,507 as of December 31, 2024. Accounts receivable and other receivables balances represented $5,446,098 of our net working capital
at December 31, 2024. We intend to collect our outstanding receivables on a timely basis and reduce the overall level during 2025, which
would help to provide positive cash flow to support our operations during 2025. Inventory represents $2,586,066 of our net working capital
at December 31, 2024. We are actively managing the level of inventory and our goal is to reduce such level during 2025 by our sales activities,
the decrease of which should provide additional cash flow to help support our operations during 2025.

Capital Expenditures:

We had the following material commitments for capital expenditures at December 31, 2024:

Lease commitments.Total lease expense under the Company’s operating leases was approximately $627,212 during the year ended December 31, 2024.

The following sets forth the operating
lease right of use assets and liabilities as of December 31, 2024:

| Assets:                                          |     |   |         |
|:-------------------------------------------------|:----|:--|--------:|
| Operating lease right of use assets              |     | $ | 718,509 |
| Liabilities:                                     |     |   |         |
| Operating lease obligations-current portion      |     |   | 158,304 |
| Operating lease obligations-less current portion |     |   | 560,205 |
| Total operating lease obligations                |     | $ | 718,509 |

Following are the minimum lease
payments for each year and in total.

| Year ending December 31:                         
 2025                                             |     |   |  210,086 |   |
|:-------------------------------------------------|:----|:--|---------:|