Company: DGLY
Filing Date: 2025-05-02
Form Type: 424B3
Source: 0001641172-25-008437
Chunk: 130

Company: DIGITAL ALLY, INC.
Filing Date: 2025-05-02
Form: 424B3
Chunk 130
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 through November 30, 2022 (the “August Measurement Period”) measured on a quarterly basis and annualized
as of the relevant period. If the August Measurement Period Revenue is less than the August Projected Revenue, such amount will be subtracted
from the principal balance of this August Contingent Payment Note on a dollar-for-dollar basis. If the August Measurement Period Revenue
is more than the August Projected Revenue, such amount will be added to the principal balance of this August Contingent Payment Note
on a dollar-for-dollar basis. In no event will the principal balance of this August Contingent Payment Note become a negative number.
The maximum downward earn-out adjustment to the principal balance will be to zero. There are no limits to the increases to the principal
balance of the August Contingent Payment Note as a result of the earn-out adjustments.

| F-24 |

The August Contingent Payment Note is considered to be additional purchase price, therefore the estimated fair value of the contingent liability is recorded as a liability at the acquisition date and the fair value is considered part of the consideration paid for the acquisition. Management has recorded the contingent consideration promissory note at its estimated fair value of $650,000 at the acquisition date. Principal payments, since its inception, on this contingent consideration promissory note totalled $681,907. The estimated fair value of the August Contingent Note at December 31, 2024 is $-0-, representing a decrease in its estimated fair value of $129,651 as compared to is estimated fair value as of December 31, 2023. This reduction only relates to the principal payments made for the year ended December 31, 2024. Therefore, the Company recorded no gain or loss in the Consolidated Statements of Operations for the year ended December 31, 2024.

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. The January Contingent
Payment Note has a two-and-a-half-year term and bears interest at a rate of 3.00% per annum. Quarterly principal and interest
payments are deferred for seven months and is due in equal quarterly installments on the tenth business day of each quarter. The principal
amount of the January Contingent Payment Note is subject to