Digital Ally to Acquire New Intellectual Property Platform to Address Non-Law Enforcement Markets

LENEXA, KS--(Marketwired - May 25, 2017) - Digital Ally, Inc. (NASDAQ: DGLY) ("Digital" or the "Company"), which develops, manufactures and markets advanced video surveillance products for law enforcement, homeland security and commercial applications, today announced the signing of a letter of intent to acquire the SightDeck intellectual property ("IP") from iMatte, Inc. The SightDeck IP was developed to produce theatrical-quality special effects where real-time integration of graphics and images are needed and the platform is currently installed in several universities and hospitals.

The Company believes that the SightDeck technology, paired with Digital Ally's video and software products, will establish a new technology foundation for interactive video annotation and presentation. The combined technologies will form the basis for a new business strategy for Digital Ally as it targets new markets, such as medical, education, legal, and psycho-therapy. These markets have not fully utilized the power of augmented reality on a real-time basis, which improves the efficient use of premium and scarce resources, such as doctors, lawyers, specialists and consultants.

Digital Ally has already spent considerable efforts developing new distribution channels and potential customer networks that may find this new technology very appealing and a radical change/improvement over their traditional revenue streams. Digital Ally CEO Stanton Ross stated, "We have a clear roadmap to commercialize this new technology given the extensive market research we have completed, although we have much engineering development and integration work to accomplish after closing this transaction. We are excited about the SightDeck IP platform and the many new market channels for which we expect to adapt new products and service offerings. This product will help Digital Ally develop new recurring service revenue streams, which is a major initiative to restore its profitability and provide more consistent operating results," concluded Ross.

Key members of iMatte Inc., responsible for the SightDeck development, will be joining Digital Ally's research and development team. They will facilitate both the SightDeck technology transfer and integrate the new technologies developed by iMatte with Digital Ally's audio/video products that are central to Digital Ally's new business initiative. 

Closing of the transaction is subject to the successful completion of due diligence and negotiation of the definitive agreement. Under the proposed terms, the Company will pay 6% of revenues, with a minimum of $1 million, generated from the licensing and sale of products created from the SightDeck intellectual property platform over the three-year period after closing. The parties expect the purchase to be completed in the third quarter 2017.

For more information regarding the acquisition, go to www.digitalallyinc.com/imatte.

About Digital Ally, Inc.

Digital Ally, Inc. develops, manufactures and markets advanced technology products for law enforcement, homeland security and commercial applications. The Company's primary focus is digital video imaging and storage. The Company is headquartered in Lenexa, Kansas, and its shares are traded on The Nasdaq Capital Market under the symbol "DGLY." For additional news and information please visit www.digitalallyinc.com or follow us on Twitter @digitalallyinc and Facebook www.facebook.com/DigitalAllyInc.

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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 be able to improve its revenue and operating results; whether the Company will be able to continue to expand into non-law enforcement markets; whether the Company and iMatte will consummate the proposed transaction and do so on the proposed terms; whether the Company will have sufficient capital to close such transaction; whether the SightDeck IP platform will enable the Company to enter new commercial market and increase its sales and recurring revenues in such markets; whether the Company will be able to develop and integrate the SightDeck IP with its video and software technology successfully; whether the SightDeck technology, paired with Digital Ally's video and software products, will establish a new technology foundation for interactive video annotation and presentation; competition from larger, more established companies with far greater economic and human resources; the effect of changing economic conditions; and changes in government regulations, tax rates and similar matters. 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, 2016 and quarterly report on Form 10-Q for the three months ended March 31, 2017, as filed with the Securities and Exchange Commission.