Digital Ally seeks shareholder nod to boost stock authorization

OVERLAND PARK, KS— Digital Ally (NASDAQ:DGLY), Inc., a company specializing in radio and TV broadcasting and communications equipment with a market capitalization of $3.2 million, announced today that it has postponed its special meeting of stockholders originally convened on the same day. According to InvestingPro data, the company faces significant financial challenges, with a weak financial health score and concerning liquidity metrics. The meeting was adjourned to allow for additional solicitation of votes on a proposal to significantly increase the number of authorized shares of the company’s capital stock.

The Nevada-incorporated company, listed on the NASDAQ Capital Market under the ticker DGLY, is seeking approval to amend its articles of incorporation to raise the authorized share count from 210 million to 5.01 billion, with 5 billion of these shares designated as common stock with a par value of $0.001 per share. This move comes as the company grapples with a 32% year-over-year revenue decline and a current ratio of 0.52, indicating potential liquidity concerns.

The adjournment was announced during the special meeting, and the reconvened session is scheduled for May 5, 2025, at 4:00 p.m. Eastern Time at Digital Ally’s headquarters located at 6366 College Blvd., Overland Park, KS. Shareholders who have already submitted proxies will have their votes carried over to the new meeting date unless they decide to alter or revoke their decision before the reconvened meeting takes place.

This move comes as part of Digital Ally’s strategic initiatives that may involve corporate financing activities or other business opportunities. The timing is crucial, as InvestingPro analysis reveals the company is quickly burning through cash and operates with a significant debt burden. Subscribers to InvestingPro can access 12 additional key insights about Digital Ally’s financial position and growth prospects. However, the specific reasons behind the proposed increase in authorized shares were not detailed in the press release.

The company’s management, led by Chairman and Chief Executive Officer Stanton E. Ross, is urging shareholders to consider the proposal, which requires a majority vote for approval. The outcome of this vote could potentially impact the company’s capital structure and provide it with the flexibility to pursue future growth opportunities, partnerships, or other corporate transactions, particularly important given the company’s negative EBITDA of $13.94 million in the last twelve months.

Today’s announcement is based on a press release statement and further information regarding the proposal and its implications for shareholders can be found in the Definitive Proxy Statement filed with the SEC on March 4, 2025.

In other recent news, Digital Ally, Inc. has faced a compliance issue with Nasdaq due to a delay in filing its Annual Report for the period ending December 31, 2024. The company is required to submit a written explanation to Nasdaq by April 30, 2025, although this notice does not immediately affect its Nasdaq listing. Additionally, Digital Ally has announced plans to increase its authorized shares of capital stock from 210 million to 5.01 billion. This proposal, which requires shareholder approval, is intended to provide the company with greater flexibility for future corporate needs. The special shareholder meeting to vote on this proposal has been adjourned to allow more time for gathering votes and will reconvene on April 29, 2025.

Furthermore, Digital Ally has priced a public offering expected to raise approximately $15 million, involving the issuance of 100 million Common Units. The funds raised are intended for general corporate purposes and working capital. The offering includes Series A and B Warrants, which require stockholder approval and have different exercise terms. This public offering is managed by Aegis Capital Corp., with the transaction set to close on or about February 14, 2025. Investors are advised to review the company’s SEC filings for further details on these developments.

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