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Item
3.01.
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Notice
of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
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On
April 22, 2020, Digital Ally, Inc. (the “Company”) received a written notification (the “Notice”) from
the Nasdaq Stock Market LLC (“Nasdaq”) indicating that the Company was not in compliance with Nasdaq Listing Rule
5550(a)(2), as the Company’s closing bid price for its common stock, par value $0.001 per share, was below $1.00 per share
for the last thirty (30) consecutive business days.
Pursuant
to Nasdaq Listing Rule 5810(c)(3)(A), the Company has been granted a 180-calendar day compliance period to regain compliance with
the minimum bid price requirement. However, the 180-day grace period to regain compliance with the Minimum Bid Price Requirement
under applicable Nasdaq rules has been extended due to the global market impact caused by COVID-19. More specifically, Nasdaq
has stated that the compliance periods for any company previously notified about non-compliance will be suspended effective April
16, 2020, through June 30, 2020. On July 1, 2020, companies would receive the balance of any pending compliance period exception
to come back into compliance with the applicable Minimum Bid Price Requirement. As a result of this extension, the Company has
until December 28, 2020, to regain compliance with the Minimum Bid Price Requirement.
During
the compliance period, the Company’s shares of common stock will continue to be listed and traded on the Nasdaq Capital
Market. To regain compliance, the closing bid price of the Company’s shares of common stock must meet or exceed $1.00 per
share for at least ten (10) consecutive business days during the 180-calendar day compliance period. Management continues to believe
that adherence to its current operating and business plan will enable the Company to regain compliance.
If
the Company is not in compliance by December 28, 2020, the Company may be afforded a second 180-calendar day compliance period.
To qualify for this additional time, the Company will be required to meet the continued listing requirement for market value of
publicly held shares and all other initial listing standards for Nasdaq with the exception of the minimum bid price requirement.
If
the Company does not regain compliance within the allotted compliance period(s), including any extensions that may be granted
by Nasdaq, Nasdaq will provide notice that the Company’s shares of common stock will be subject to delisting and may potentially
be traded on the OTC market thereafter.
Cautionary
Statement Regarding Forward-Looking Statements
Certain
statements in this Current Report on Form 8-K are forward-looking within the meaning of the Private Securities Litigation Reform
Act of 1995. These statements may be identified by the use of forward-looking words such as “anticipate,” “believe,”
“forecast,” “estimate,” “expect,” “intend,” “likely,” “may,”
“plan,” “potential,” “predict,” “opportunity” and “should,” among
others. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking
statements. The Company does not undertake an obligation to update or revise any forward-looking statements. Investors should
read the risk factors set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, and its
other periodic reports filed with the Securities and Exchange Commission.