Company: DGLY
Filing Date: 2025-02-14
Form Type: 424B4
Source: 0001493152-25-006704
Chunk: 196

Company: DIGITAL ALLY, INC.
Filing Date: 2025-02-14
Form: 424B4
Chunk 196
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 equal to the greater of (i) the Prime Rate plus four percent or (ii) eight percent, on the aggregate principal amount of all Revolving Loans outstanding from time to time as provided in the Loan Agreement.

The Company entered into the Mortgage to secure its obligations under the Loan Agreement. The property mortgaged under the Mortgage consists of the Mortgaged Property. The Mortgage contains customary covenants, representations and warranties by the Company. In addition, the Company recorded debt issuance costs of $ 188,255. During the year ended December 31, 2023, the Company amortized $ 16,997of debt discount under interest expense, compared to $- 0- for the year ended December 31, 2022.

Merchant Cash Advances

In November 2023, the Company obtained a short-term merchant advance, which totaled $ 1,050,000, from a single lender to fund operations. These advances included origination fees totaling $ 50,000for net proceeds of $ 1,000,000. The advance is, for the most part, is secured by expected future sales transactions of the Company with expected payments on a weekly basis. The Company will repay an aggregate of $ 1,512,000to the lender. During 2023, the Company made repayments totaling $ 162,000and $ 1,350,000remained outstanding, which is expected to be repaid in 2024.

During the year ended December 2023 the Company amortized $ 142,829of debt discount under interest expense, compared to $- 0- for year ended December 31, 2022.

| F-28 |

NOTE 11. FAIR VALUE MEASUREMENT

In accordance with ASC Topic 820 - Fair Value Measurements and Disclosures(“ASC 820”), the Company utilizes the market approach to measure fair value for its financial assets and liabilities. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities or a group of assets or liabilities, such as a business.

ASC 820 utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

| ● | Level                                                                                                                 
 1 - Quoted prices in active markets for identical assets and liabilities                                              |
| ● | Level                                                                                                                 
 2 - Other significant observable inputs (including quoted prices in active markets for similar assets or liabilities