Item
3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On
July 7, 2022, Digital Ally, Inc., a Nevada Corporation (the “Company”), received a written notification (the “Notice”)
from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it was not
in compliance with the minimum bid price requirement for continued listing on the Nasdaq Capital Market, as set forth under Nasdaq Listing
Rule 5550(a)(2) (the “Minimum Bid Price Requirement”), because the closing bid price of the Company’s common stock,
par value $0.001 per share (the “Common Stock”), was below $1.00 per share for the previous thirty (30) consecutive business
days. The Notice has no immediate effect on the listing of the Common Stock, which will continue to trade uninterrupted on the Nasdaq
Capital Market under the ticker “DGLY.”
Pursuant
to Nasdaq Listing Rule 5810(c)(3)(A), the Company has been granted 180 calendar days from the date of the Notice, or until January 3,
2023 (the “Compliance Period”), to regain compliance with the Minimum Bid Price Requirement. If at any time during the Compliance
Period, the bid price of the Common Stock closes at or above $1.00 per share for a minimum of ten (10) consecutive business days, Nasdaq
will provide the Company with written confirmation of compliance with the Minimum Bid Price Requirement and the matter will be closed.
In
the event the Company does not regain compliance with the Minimum Bid Price Requirement by January 3, 2023, the Company may be eligible
for an additional 180-calendar day grace period. To qualify, 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 the Nasdaq Capital Market, with the exception of the
Minimum Bid Price Requirement, and will need to provide written notice to Nasdaq of its intent to regain compliance with such requirement
during such second compliance period.
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 Common Stock will be subject to delisting from the Nasdaq Capital Market.
The
Company intends to continuously monitor the closing bid price for its Common Stock, and is in the process of considering various measures
to resolve the deficiency and regain compliance with the Minimum Bid Price Requirement. However, there can be no assurance that the Company
will be able to regain compliance with the Minimum Bid Price Requirement, even if it maintains compliance with the other Nasdaq listing
requirements, or that Nasdaq will grant the Company any extension of time to regain compliance with the Minimum Bid Price Requirement
or any other Nasdaq listing requirements, if applicable.
Cautionary
Statement Regarding Forward-Looking Statements
This
Current Report on Form 8-K (this “Form 8-K”) contains forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking
statements include, but are not limited to, statements that express the Company’s intentions, beliefs, expectations, strategies,
predictions or any other statements related to the Company’s future activities, or future events or conditions, which can be identified
by terminology such as “may,” “will,” “expects,” “anticipates,” “aims,” “potential,”
“future,” “intends,” “plans,” “believes,” “estimates,” “continue,”
“likely to” and other similar expressions intended to identify forward-looking statements, although not all forward-looking
statements contain these identifying words. These statements are not historical facts and are based on current expectations, estimates
and projections about the Company’s business based, in part, on assumptions made by its management. These statements are not guarantees
of future performance and involve risks, uncertainties and assumptions that are difficult to predict, many of which are beyond the Company’s
control, including, among other things, the Company’s ability to maintain its listing of Common Stock on the Nasdaq Capital Market,
which may cause the Company’s actual results, performance and achievements to differ materially from those contained in any forward-looking
statement. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in the forward-looking statements
due to numerous factors, including those risks that may be included in the periodic reports and other filings that the Company files
from time to time with the U.S. Securities and Exchange Commission. Any forward-looking statements speak only as of the date on which
they are made, and the Company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after
the date of this Form 8-K, except as required by applicable law.