Company: DGLY
Filing Date: 2025-01-16
Form Type: S-1/A
Source: 0001493152-25-002490
Chunk: 8

Company: DIGITAL ALLY, INC.
Filing Date: 2025-01-16
Form: S-1/A
Chunk 8
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 file the Resale Registration Statement on or before December 18, 2024 (but in no event later than December 20, 2024),
and to use commercially reasonable efforts to cause such Resale Registration Statement to become effective within forty-five (45) calendar
days following the filing thereof and to keep such Resale Registration Statement effective at all times until no Selling Stockholder
owns any Shares. Failures to meet any of the deadlines set forth in the foregoing sentence shall be considered Public Information Failures
for which Public Information Failure Payments shall be due pursuant to Section 4.3(b) of the Amendment.

Pursuant to the Amendment, a participation right
was added to the Purchase Agreement, such that until one (1) year following the Closing Date, the Selling Stockholders shall have the
right to receive an irrevocable written notice (the “Offer Notice”) of any proposed or intended issuance or sale or exchange
(the “Offer”) of the securities being offered (the “Offered Securities”) in a Subsequent Placement (as defined
in the Amendment), which Offer Notice shall, among other things, offer to issue and sell to or exchange with such Selling Stockholder
in accordance with the terms of the Offer such Selling Stockholder’s pro rata portion of 35% of the Offered Securities, subject
to certain conditions.

Nasdaq Notifications

As previously disclosed, on January 2, 2025, the Company received a letter (the “Notice”) from the Nasdaq Listing Qualifications staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) stating that it was not in compliance with Nasdaq Listing Rule 5550(b)(1) (the “Stockholders’ Equity Requirement”), as the Company’s stockholders’ equity of ($2,448,310), as reported in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024, was below the required minimum of $2.5 million, and the Company did not meet either the alternative compliance standards relating to market value of listed securities of at least $35 million or net income from continuing operations of at least $500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years.

Discussions to Sell Majority Interest in Subsidiary

The Company is in discussions to sell the 51% of the membership units that our wholly owned subsidiary, Digital Ally Healthcare, Inc., holds in its majority