Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
On January 8, 2020, Digital Ally, Inc. (the "Company") received a determination
letter (the "Letter") from the staff (the "Staff") of The Nasdaq Stock Market
LLC ("Nasdaq") stating that the Company has not regained compliance with the
Market Value of Listed Securities ("MVLS") Standard, since the Company's common
stock, par value $0.001 per share (the "Common Stock"), was below the $35
million minimum MVLS requirement for continued listing on The Nasdaq Capital
Market under Nasdaq Listing Rule 5550(b)(2) (the "MLVS Rule") and had not been
at least $35 million for a minimum of 10 consecutive business days at any time
during the 180-day grace period granted to the Company. As previously disclosed,
the Company was initially notified by the Staff on July 11, 2019 that the
minimum MVLS for the Company's Common Stock was below the $35 million minimum
MVLS requirement for the previous 30 consecutive business days, and in
accordance with the Nasdaq Listing Rules, the Company was provided 180 calendar
days, or until January 7, 2020, to regain compliance with the MVLS Rule.
Pursuant to the Letter, unless the Company requests a hearing to appeal this
determination by 4:00 p.m. Eastern Time on January 15, 2020, the Company's
Common Stock will be delisted from The Nasdaq Capital Market, trading of the
Company's Common Stock will be suspended at the opening of business on January
17, 2020, and a Form 25-NSE will be filed with the Securities and Exchange
Commission, which will remove the Company's securities from listing and
registration on Nasdaq.
On January 13, 2020, the Company requested a hearing before the Nasdaq Hearings
Panel (the "Panel") to appeal the Letter and the Staff of Nasdaq notified the
Company that a hearing is scheduled for February 20, 2020 at 11:00 a.m. Eastern
Time. The Company has been asked to provide the Panel with a plan to regain
compliance with the minimum MLVS requirement under the MLVS Rule. The Company's
plan will need to include a discussion of the events that the Company believes
will enable it to timely regain compliance with the minimum MLVS requirement.
The Company plans to submit a plan that it believes will be sufficient to permit
the Company to regain compliance with the minimum MLVS requirement. Indeed, the
Company anticipates that it may regain compliance with the MLVS Rule prior to
such hearing.
While the appeal process is pending, the suspension of trading of the Company's
Common Stock is stayed, and the Company's Common Stock will continue to trade on
The Nasdaq Capital Market until the hearing process concludes and the Panel
issues a written decision.
There can be no assurance that the Panel will grant the Company's request for a
suspension of delisting or continued listing on The Nasdaq Capital Market. If
the Company's Common Stock ceases to be listed for trading on The Nasdaq Capital
Market, the Company would expect that its Common Stock would be traded on one of
the three tiered marketplaces of the OTC Markets Group.
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