DGLY Digital Ally Inc

The Pre-Trial Order Sets Forth the Parties’ Theories and Damages Requests to be Presented to a Jury

Digital Ally, Inc. (NASDAQ: DGLY), which develops, manufactures and markets advanced video surveillance products for law enforcement, homeland security and commercial applications, announces a development in its legal battle against Axon Enterprise, Inc. (“Axon,” formerly TASER International, Inc.). On January 23, 2019, the U.S District Court for the District of Kansas issued the Pretrial Order in Digital Ally’s litigation against Axon. The Pretrial Order details each party’s theories and defines the scope of the case that will be presented to the jury after the Court deals with each party’s expected summary judgment motion.

As noted in the Pretrial Order, Digital is asserting that Axon has infringed, and is infringing, claims 10, 14, 15, 16, and 20 of the ‘452 Patent by making cameras (both the Axon Body body-worn cameras and the Axon Fleet in-car cameras) that are compatible with the auto-activation technology in the Axon Signal Unit (“ASU”). The Pretrial Order also notes that Digital Ally believes Axon will be unable to meet its high burden of establishing invalidity and inequitable conduct, not least because Axon failed in its previous attempts with the U.S. Patent Office to invalidate the ‘452 Patent.

The Pretrial Order further notes that Digital Ally is seeking “reasonable royalty damages … as a result of TASER’s infringement of the ‘452 Patent from February 2, 2016 through August 17, 2018 [of] $68,456,524” and that “[p]rior to trial in this matter, Digital Ally will supplement its damages calculations.” Digital Ally’s damages calculations apply the reasonable royalty to “TASER’s accused ASUs, Axon Signal-compatible cameras and their associated docks, and related purchases of Evidence.com.” Because Digital Ally has alleged that Axon’s infringement is willful, it also will be seeking to have any damages award trebled—a legal doctrine that, if successful, permits the Court to triple the damages awarded by a jury. Finally, and of particular importance for the body-worn camera marketplace, Digital Ally is seeking a permanent injunction that will seek to remove from the marketplace Axon’s auto-activation products, including the Axon Signal Unit as well as the Axon Body and Fleet cameras. Axon argues that any awarded damages should be “no more than 500,000” and should be limited to “ASU sales only.”

“We have been exceedingly patient as this legal process has played out and we are excited that the issuance of this Pretrial Order puts us one step closer to trial,” said Digital Ally’s CEO, Stanton Ross. “We are confident the jury will see Axon’s conduct for what it is—an attempt to capture the marketplace and drive us out through the willful infringement of our patented auto-activation technology,” concluded Ross.

About Digital AllyDigital Ally, Inc., headquartered in Lenexa, KS, specializes in the design and manufacturing of the highest quality video recording equipment and video analytic software. Digital Ally pushes the boundaries of technology in industries such as law enforcement, emergency management, commercial fleets, and consumer use. Digital Ally’s complete product solutions include in-car and body cameras, cloud and local management software, and automatic recording technology. These products work seamlessly together and are simple to install and operate. Digital Ally products are sold by domestic direct sales representatives and international distributors worldwide.For additional news and information please visit www.digitalallyinc.com or follow us on Twitter @digitalallyinc and Facebook www.facebook.com/DigitalAllyInc Follow additional Digital Ally Inc. social media channels here:

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Contact InformationStanton Ross, CEOTom Heckman, CFODigital Ally, Inc.913-814-7774

info@digitalallyinc.com

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. These forward-looking statements are based largely on the expectations or forecasts of future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, a number of which are beyond the control of management. Therefore, actual results could differ materially from the forward-looking statements contained in this press release. A wide variety of factors that may cause actual results to differ from the forward-looking statements include, but are not limited to, the following: whether the Company will achieve positive outcomes in its litigation with Axon and the time frames for such litigation; competition from larger, more established companies with far greater economic and human resources; its ability to attract and retain customers and quality employees; and the effect of changing economic conditions. These cautionary statements should not be construed as exhaustive or as any admission as to the adequacy of the Company's disclosures. The Company cannot predict or determine after the fact what factors would cause actual results to differ materially from those indicated by the forward-looking statements or other statements. The reader should consider statements that include the words "believes," "expects," "anticipates," "intends," "estimates," "plans," "projects," "should,” or other expressions that are predictions of or indicate future events or trends, to be uncertain and forward-looking. The Company does not undertake to publicly update or revise forward-looking statements, whether because of new information, future events or otherwise. Additional information respecting factors that could materially affect the Company and its operations are contained in its annual report on Form 10-K for the year ended December 31, 2017 and quarterly report on Form 10-Q for the three and nine months ended September 30, 2018, filed with the Securities and Exchange Commission